Opening an online store has become an increasingly popular way of starting or boosting a business in the UK. It offers a range of advantages, such as low start-up costs and the potential to reach a global audience.
Opening your store online comes with a few costs - but it's necessary for today's day and age.
However, there are a number of costs to bear in mind when setting up an online store in the UK, from web hosting fees and design costs to merchant accounts and payment gateways. By understanding the associated costs, you can be fully prepared to launch your store and start benefiting from the advantages of e-commerce.
Here's a rough guide to some costs you can expect to see when taking your business online. These are likely to vary depending on the platforms you use for each stage. Still, it's helpful to get an idea of what you'll be spending so you don't encounter any nasty surprises or find yourself unprepared.
This is usually a one-off cost of £10-£30, depending on the chosen domain name suffix.
Ensure the domain name matches your company so that customers can find it. And depending on where you choose to register it, there may be domain renewal fees that you need to pay annually.
Spending money on a domain is worth it, as it should clearly represent your company name.
It may cost more for a .com or .co.uk domain, but this boosts your reputability, and you don't need to renew it as often.
A typical hosting package costs £7-£20 per month, depending on the type of hosting package and how much storage and bandwidth you need.
Research the available platforms thoroughly to find which suits you best, as some will have a low upfront cost, but require countless add-ons for you to be able to take advantage of the full features.
Web hosting packages will vary in price depending on what you need.
You could begin with a low-level plan, and scale up once you need it, rather than paying for a higher plan and not requiring the available offerings.
You may need to hire a web designer or web developer to build your site, depending on the complexity of your store and the features you need. Prices can range from a few hundred pounds to several thousand, depending on the size and scope of the project.
Web design can be costly, but it's worth paying for as quality design can strongly influence purchases.
You may find what appears to be a really cost-effective designer, but stick to the rule "pay cheap, pay twice". It's quite likely that if a price seems too good to be true, it probably is. You'll pay the affordable developer to carry out some design work, but end up having to pay someone more skilled to do it if it doesn't turn out how you want.
This is also known as a false economy.
Don't try and cut costs within your business - you want it to be something that both makes you proud and generates a profit.
You may need to use a shopping cart software package, such as Shopify or Magento, to manage your online orders, stock levels and payment processing. Costs range from a few pounds per month to several hundred, depending on the features and functionality you require.
Shopping cart software is worth investing in as this is where customer payments are handled - so you don't want to scrimp on it and end up with unhappy customers.
If it malfunctions and customers order something revealed to be out of stock, this could cause disorder within the business and cost you lots of time and money to make it right.
To accept credit cards and other forms of payment, you'll need to set up a merchant account with a bank or payment processor. This usually involves a one-off setup fee, plus a monthly charge and transaction fees.
To link your store to the payment processor, you'll need a payment gateway. Most shopping cart software packages will include a payment gateway, but you may need to pay an extra fee for additional features.
You may need to pay extra fees for a payment gateway, but it's worth it to ensure your customer payments are secure.
If you're shipping physical products, you'll need to factor in shipping costs, alongside any associated packaging and insurance costs.
Depending on the type of items you're selling and your store's location, you may need to set up a VAT number, register for taxes, or draw up any legal documents.
Always stay aware of VAT and tax deadlines within your business.
Once your store is up and running, you'll need to invest in marketing activities, such as search engine optimisation, pay-per-click advertising, social media campaigns, and email marketing.
As with most things in business, there are costs to consider.
Opening an online store in the UK involves a range of costs, from the initial registration of a domain name and web hosting fees to design and development expenses and shopping cart software. You'll also need to set up a merchant account, and a secure online payment platform in order to accept payments, and shipping costs may be incurred if selling physical products. It is also important to consider the cost of marketing your store, which could include SEO, PPC and email campaigns.
Despite the costs, expanding to trade online can be highly profitable.
The advantages of setting up an online store far exceed the associated costs involved. Having a web presence allows you to expand your reach, connecting with customers who are unable to visit your physical store or who prefer online shopping. This can lead to higher profits, as well as the potential to invest in a wider product range. Additionally, there are fewer overheads such as rent and bills, making it an attractive and economical option for businesses. Therefore, don't let the costs put you off – it is wise to be aware of them so you have an understanding of your options and can make an informed decision.
If you find that the costs of opening your online store are too high, you could look into getting extra business funding. Getting a cash injection into your business means that you can invest in a top-of-the-range site, with an engaging design and product range to entice customers and encourage spending. In addition to this, you can keep any physical stores running successfully alongside.
Love Finance offers short-term, fast funding so that you can get the money that you need to get your website up and running ASAP. Enquire here to see what you could borrow!
