Out of 10 people who dream of starting their own online store, only ONE actually makes that dream a reality. Many sign up for free trials but most lack the confidence to sign up for a paid shopping cart service. But those who do actually sign up surprisingly progress really quickly in terms of store set up and marketing.
It’s obvious that these folks did quite a bit of homework before signing up. This does work, and we encourage everyone with the intention of starting up a home business work at home setup to do the same.
To help you get started, we will be looking at budgets – a brief look at how much should be put aside to run a web store for a year. Just to digress a little, beware of sites promoting absolutely free home based business opportunities. Many of these claims are just bait for clever scams. As far as we know it takes a bit of effort and some money to get a home business work at home setup going. Money-wise, all you need is a small business start up financing plan to get a clearer picture of what you might be getting into.
A few basic factors need to be considered when budgeting for a web store:
Domain Name
Naturally, you’ll need a domain name for your a web store. You can register brand new names or get one that has expired. But before you do that, weigh the pros and cons first. A pre-used name could already have links to it but it could also come with some unwanted baggage like blacklistings. Domain names aren’t really costly so try to get one that’s new. The average cost of a new domain name is around $10 each per year.
Payment Gateway
Most merchants use the services of a payment gateways to handle payment transactions. Basically a payment gateway allows you to accept payments online. These gateways are reliable and offer a host of features like fraud prevention and recurring billing. Popular gateway 2Checkout (2CO) charges a 5.5% commission on each transaction, plus a $0.45 charge per transaction. They also charge $49 as a one-time set-up fee.
SSL Certificate
The SSL (Secure Sockets Layer) protocol was created to ensure secure transactions between web servers and browsers. The SSL certificate is an electronic document which contains certain unique information such as e-mail address, owner’s name, certificate usage, duration of validity, Distinguished Name (DN) and certificate ID that ensures web site owners are who they claim to be. You can get a standard SSL certificate for as low as $30 per year.
Drop Shipping Services
Reliable drop shippers or drop shipping suppliers are great for new merchants who are short on manpower and storage space. The process is simple. A customer makes a purchase at a store, and the order and shipment details are then forwarded to the manufacturer or wholesaler who then ships the product(s) to the customer. This process actually reduces cost in the supply chain. Expect to pay around $60 monthly for drop shipper supplier services.
Shopping Cart Software
This is the software that makes everything happen for a webstore. Top shopping cart software solutions like InstanteStore are filled to the brim with features and are easy to use. InstanteStore provides a shopping cart software solution for as low as $49.97 a month without any set up fee and you can save even more if you opt for longer term subscription packages. On average though, be prepared to fork out $150 a month along with a $99 set up fee for most shopping carts.
Logo And Site Design
Ecommerce sites usually provide free templates if you sign up with them but most merchants prefer to customize their stores to make them stand out among the crowd. Design firms like Logo-Design-Studio provide customized web store designs from $397. On the average, you would need to put away about $500 to get your store a suitable custom-tailored website design.
In conclusion, you would need to set aside approximately $3200 for your web store for the first year. Of course, this is a very high estimate. You could save quite a bit by using the shopping cart solution from InstanteStore and save another $700 or so if you do not use the services of a drop shipping supplier. You can also save a few more dollars if you purchase your domain name together with an SSL certificate. With a careful eye to budget, you could potentially bring your actual cost of doing online business for a year to around $1200 or less.
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