How to Plan for Your Ecommerce ROI Part II – What does a website cost?
By Vu Online On October 12, 2012 - Ecommerce Website, News
Carrying on from How to Plan for Your Ecommerce ROI Part I where we discussed value versus price and we began thinking about the ecommerce website as a long-term investment, this white paper looks at the realistic costs of building an ecommerce website, what can you expect to pay and what will you get for that level of investment.
Why are we writing this? Doesn’t it ‘depend’ on a large number of requirements? Well yes, website costs depend on what you want to have; but, how can you know what you want when you aren’t sure what it would cost?
That’s why we feel that giving you an honest appraisal of what you can realistically expect to pay for an ecommerce website (and what you get for that investment) is the most productive way to start your ecommerce business.
With an accurate idea of the ranges of investment and what you’ll receive for that investment, you can plan for the growth of your business and for future investment in the website that will, with careful planning, grow into all that you dream it will.
Buying your ‘house’ – there’s more than the building costs
We began this ecommerce/house analogy in Part I; getting an ecommerce website built is a lot like buying a home. It is neither a single ‘product’ to purchase, nor a ‘service’ to hire.
First, there are the ‘land’ costs. Purchasing an ecommerce website domain, like purchasing property, can be expensive depending on whether someone already owns it.
There is the design of the home you want. When you build a new house, you pay the developer/builder for the plans, the raw materials, the workmanship and for the fixtures and fittings (paint, flooring, countertops, cupboards) of the finished home itself.
Similarly with an ecommerce site, there is the planning and architecture to set out the structure of the website, the coding and functionality that make up the foundations and functions of the website, the design and content that goes into the site to make it your own: photography, product shots, copywriting, product descriptions, articles, blogs, pricing, sales pages, email newsletters, reviews, and so on.
Prefab or custom?
With each choice there are limits and we discussed this in Part I.
When buying a new home, you can choose to save some investment capital / time and purchase a prefab home; but what if you want the kitchen overlooking the back garden and the plans don’t accommodate this?
You’ll have a hefty re-design fee and some remodelling to do.
The situation is similar with ecommerce websites. Prefab ecommerce store fronts pigeon-hole your business into a certain type of store set up and certain features – even a set design. But, is this what you need? Is this what you want? Is this what your customers want?
What if you want to change functionality or the design in the future – will your new logo destroy the layout?
You are limited by what the prefab ecommerce platform lets you customise and with a custom ecommerce website, your limit is your budget.
Look carefully at the full cost
Some developers offer financing arrangements for ecommerce websites that lower your up-front investment and spread out the cost over a medium term of two to three years. While this is attractive initially, like mobile contracts with ‘free’ phones the full costs add up to more than what an initial purchase would have been.
Make sure you understand what services (maintenance, hosting, emergency support, etc.) are included in what you’re paying each month, and what you’ll have to spend in addition to this. You will also want to find out exactly what level of design and development you get for your ecommerce store.
This model has obvious advantages and we have thought long and hard about offering a similar arrangement ourselves.
However, we have decided on a business model where we look after a small number of clients at the same time. This means we can give each of them our full attention, and because we offer a much higher level of service alongside bespoke design and functional elements, we simply can’t afford to charge small monthly instalments. Doing so would mean that we would have to work for a larger number of clients at the same time, giving less attention to each.
That’s not for us.
For us and our clients, it’s the level of personal service and time we dedicate to getting ecommerce right for each business that ‘costs’ more up-front, but it is doing so that guarantees the return on the investment in the long run.
Ecommerce Design & Development Costs: A few ranges to help guide you
These ranges are (of course) generic, but they are based on our experience in over a decade of ecommerce website design and development. We have listened to our clients explain what they have invested with other web agencies prior to working with us, and we are confident that these numbers give an accurate picture of what you can expect.
This level of ecommerce investment is the bare-bones basics. You will likely be restricted in terms of design and functionality at this level, getting something that looks good but won’t have all the ‘bells and whistles’ you will find on other ecommerce sites. You definitely won’t be getting a content management system (CMS) meaning you will have to update products, pricing, promotions and other content manually.
At this level, you will start to find more flexibility in functionality and the ability to get a truly custom design. Basic content management could be offered at this level, but you will not likely get any custom application development (i.e. You won’t get any advanced ecommerce functionality that links your inventory system with the website).
This is getting into a more advanced level of ecommerce website. Here, you’ll be offered custom design and branding possibilities, a robust CMS to manage your content and promotions, and customised functionality that provides many of the advanced features you might want: order tracking, user profiles, inventory management, advanced blogging, ‘social’ features such as ratings and comments, and more.
As we said, these are averages and you’ll need to discuss your goals and negotiate with your ecommerce web design and development team to get the right mix of features and designs for your business and target audience.
Know your limits: a note on using ‘low-cost’ templates
With free content management systems like WordPress and the ecommerce platform Joomla, some new ecommerce businesses are tempted to use the free or budget templates, themes and even hosting offered by these platforms.
While this certainly works for some businesses who have the time and knowledge to tinker with the design and features of Joomla or WordPress, many are surprised by how much tinkering they will need to do to get a website they are happy with.
We have had some clients ask us to customise a theme or platform to get the design or features they desire. While we are more than happy to work to this sort of brief, we have found that in the end, even when only paying for our time to make the customisations, it actually costs these businesses just as much as having us set up what we call a toolkit site – as well as taking a lot more time.
A toolkit ecommerce website offers a clean template design, simple functionality and an easy to use CMS that is more than adequate.
If you’re not ready to invest a significant amount of time and effort in figuring out how to use these platforms for your ecommerce business, talk to your agency about a toolkit option and see if that meets your budget.
- SEOmoz, Social Annotations in Search: Now Your Social Network = Rankings,http://www.seomoz.org/blog/social-annotations-in-search-now-your-social-network-rankings, Accessed 07.04.2012
- Searchengineland, Bing Ups Ante in Social Search, http://searchengineland.com/bing-ups-ante-in-social-search-re-ranking-serps-with-likes-77269, Accessed 07.04.2012