When starting an online business, the first thing that comes to mind is how much money is needed? It is crucial to determine the coast. However starting your own online business is relatively affordable and straightforward, but you have to give it time to set it up. One must know the basics of the business because it will help them in the long term.
Estimate the costs
It is essential to determine the cost of a business. For example, the cost of starting a home-based franchise is $2000 to $5000; on the other hand, most micro businesses cost around $3,000. However, the cost depends on the business and what you want to do.
It is crucial to add all your all expenses when deciding the cost. If one doesn’t determine the business cost, then there are high chances of failing their business.
Online start-up costs that can’t be avoided
When starting a business, there are four necessary costs:
- Web Hosting
- Payment processing
- Domain name
If you use any third-party app such as Amazon, Etsy or eBay to sell your product, there will be additional costs.
Without having something to sell, people can’t start their online business. In simple words, individuals have to stock to inventory in order to sell the product online or offline.
The costs to maintain it, replenish it and store it are made up of your inventory expenses. Simply, the cost of inventory is calculated as a percentage of inventory value.
Owners need a top-notch service of web hosting. The cost of web hosting relies on how much traffic you anticipate the company’s value.
In addition, an owner may do more in web hosting but can pay monthly or annually. Without hosting, your website can’t be visited and won’t be connected. The cost of hosting is varying $3.50 to $250. There are two main kinds of hosting:
Ø Private hosting
Private hosting means owners pay for their private server. It starts from $200/month and is very costly but more reliable if you have various visitors on a monthly basis.
Ø Shared Hosting
It is relatively cheap than private hosting, costing only $3.50 to $40 per month. Moreover, you do not need to pay a considerable amount just because you share the server with others.
However, it is not necessarily starting cost of your business; most of all, payment processors, including stripe and Shopify, charge owners approximately 2 to 3 per cent and $0.30 on every transaction.
The domain name means one’s UPL or website. They are very cheap to buy. The initial fee for a domain name is $50 to $100, and $20 is the annual fee.
It is essential to have a domain name to start an online business. Then, people can easily order the product directly on the website; that’s why it is essential to every e-commerce business.
Keep in mind all these costs when deciding the prices of the product. Owners have to make some profit on every sale after processing fees, product costs, shipping fees, marketing costs, etc.