Learn How to Calculate Total Cost of eCommerce Platform Implementation

Building and managing an eCommerce store is a crucial task, which may not be accomplished accurately until you’re completely aware of the investment you may put in. It’s essential to ensure you’re not charged with any hidden cost surprises while you exert and operate your store online.

While you’re setting up an eCommerce platform, your investment not only depends on the license fee but is also inclusive of a number of other factors. A few of these factors include third-party apps, ongoing maintenance with solution partners, optimization, and many more.

With this blog, we aim at providing an overview of the total cost of ownership (TCO) and how you can better understand it.

In layman’s terms, TCO can be referred to as the sum of all costs and expenses required to buy, execute, and manage your eCommerce business. From back end platform management payments to online marketing funds, TCO is inclusive of everything that demands you to spend money on your web store or online business.

Under the broad umbrella of calculating TCO, you might have to include licensing costs, maintenance, support charges, extension purchases, payment gateways, and much more. To do justice in calculating the total cost of ownership, you might view or mark every minor to major spending done to establish your online business.

As discussed, there are numerous verticals to consider while calculating the total cost of ownership (TCO). To make things easy for you, we have created a short checklist that must be considered while calculating the TCO of an eCommerce solution.

Taking all the primary and trivial efforts to build an eCommerce store, let’s bifurcate the costs under following categories:

Below is a quick checklist of the sub-pieces to consider within each cost category listed above.

Whatever be the size of your business or budget, you have to pay for certain kinds of initial business set up jobs, which includes:

Next, you must ensure delivering an impeccable user experience through your eCommerce website. In today’s competitive world, your store must create its own unique experience with a streamlined process for customers to make a purchase.

To accomplish this, you will have to bear the standard design costs:

In case you’re designing the site yourself, you might have to put much time, money, and resources into it. This step can lead to a long time to market, high costs, and recurring mistakes.However, while working with an eCommerce development agency, you won’t encounter any issues, as they’ve already figured out how to avoid the majority of such common setup errors.

Above-listed costs were all about setting up a framework or, say, your eCommerce site’s structure. Now to build a store that offers a valuable experience to your customers, it’s essential to add a few relevant functionalities and features such as:

Implementing the above functionalities will incur the cost of the following:

So, your eCommerce store is all set to accept orders and ship them in the most organized manner. To ensure the process flow runs smoothly, there are some ongoing fees you must consider.

A few standard ongoing maintenance costs associated with eCommerce stores are as follows:

Not to forget, you will have to bear the yearly domain name and hosting costs. Also, if you have chosen a SaaS-based eCommerce platform, you might have to pay for its subscription as well.

Choosing an eCommerce development agency over an in-house team helps save time, money, and a lot of effort. Moreover, there lies flexibility in hiring an eCommerce agency for building your online store.

The cost of operating your online store with an agency would vary as per the services you ask them to handle for you. A top eCommerce agency will always understand your requirements and provide a suitable cost estimate for the required services.

In case you’re in uncertainty, you must hire an experienced eCommerce agency if:

Calculating the Total Cost of Ownership for an eCommerce business is not as simple as licensing fees. There are numerous verticals involved in determining the TCO. Whether calculated in-house or outsourced to an accounting company, your TCO must include the above-listed primary categories’ expenditure.

We hope this blog sheds light on your understanding of TCO and what factors must be considered while calculating it. Let us know if you have any queries about it!

Moreover, we would like to chime in here and introduce ourselves as one of the top-rated eCommerce development solutions partners.

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