How much will your Magento shop cost? What does the price matter? Which factors are decisive? And if not exactly … what costs do you have to expect? The article answers the questions.
As with an on-site shop?
The product catalog is planned. There is contact with suppliers. Now a suitable business is needed. An investment is needed. The only question is how much?
How expensive is the store? No founder can give a blanket answer. First there are many questions to be answered:
- How many visitors are expected (capacity)?
- Are shelves & Co. made individually or is everything off the shelf? (Design)
- How many products are sold and how big does the warehouse have to be?
- Is the commercial space in the city center or outside in the commercial area?
So there are many factors at play. An online shop has different requirements. For example, the location does not matter. But other factors make the difference. And that’s exactly what this article is about.
But so much in advance: No reputable service provider can give a flat-rate final Magento pricing. Many details are important for this. Either they pay too much at a flat rate. Or the quality suffers in complex projects. The loser in both cases is you as the operator of the Magento shop.
But now, more specifically: what costs does a shop operator have to expect?
Cost of a Magento shop?
A Magento shop can be relatively simple. A simple installation, a purchased theme (design) and popular payment providers & Co. does not take forever. Larger shops must also be connected to a system for warehouse and order management (merchandise management).
Other Magento stores sell customizable t-shirts. A configurator is required for this, which is used to upload and design the design. Or should product data from suppliers be automatically read into the shop? When a book is ordered, a print job is automatically generated at a printing company? That (mostly) has to be developed.
Here is a more precise overview with an assessment of the respective effort for the work. I can of course offer you an exact assessment in a personal interview.
1. The Basics: Open Source vs. Enterprise
The first decision starts with the Magento version. Similar to a store, there are different service levels. Does the alarm system only scare you with noises? Would you also like to receive information by e-mail and record videos? Or will a security service also be sent out? It’s all a question of money.
Open source (free)
There is the free open source edition. The software itself is free. There are no license costs. You only pay for the service for setting up, adapting, expanding & Co.
I recommend the free version to new customers. All of my previous customers use this variant. It is ideal for small to medium-sized companies. One major difference: there is no support from the manufacturer. A contact person for everything related to Magento takes care of that. Maybe soon as your freelancer?
Enterprise ($ 20,000 and up)
The enterprise solution is aimed at large companies. In the enterprise version, they get direct support from Magento. The warranty is also different here. As a user of the open source variant, there is no guarantee. For a really large company with high sales, Magento takes over this guarantee, but it can also be paid for well.
What to do?
The first cost factor: Should it be the open source version (free of charge) or the enterprise version (from around $ 2,000 per month)? In most cases the answer is use the open source variant.
2. The design of the new shop
A shop offers a lot of space for design. How should shelves, walls, furniture & Co. look like? Prefer simple? Just white? Is the function even more important? Or do you hire an interior designer? All of this decisively determines the costs. Individual production is always more expensive. The designer also has to be paid. And so on.
On the other hand, there is also a low-budget solution. Maybe the IKEA desk is enough for now? Shelves from the cheaper furniture store next door? There are certainly very nice solutions that are completely sufficient for the start.
Finished design (100-200 EUR + customization)
Exactly this decision also influences the costs of your new Magento shop. Every website and every shop is designed somehow. There are also ready-made designs (themes) for Magento in the price range between approx. 100-200 euros. In addition, there is usually a few hours of work for the adjustment.
Individually designed (from around 6-8 man days)
The high-quality and more expensive variant is an individual design. A graphic designer creates a layout in advance (at least 4 days of effort). The finished result is converted into a Magento theme by a programmer. That is again at least about 4 man-days. With an average agency rate of € 80, a day costs € 640 per 8 hours. A simple design costs at least 5120 euros.
What to do?
Investing in your own design makes sense for existing businesses. Your own identity can be taken into account. So the shop doesn’t just generate sales. It increases customer recognition.
If the budget is tight, I would advise new shops not to invest. I’ve worked on stores that started with a $ 150 design. Nevertheless, six-figure sales were achieved in the year.
Packaging isn’t everything on the web. Good texts, images and, above all, offers are also important. It’s like fishing:
3. Adjustments & Co.
The manufacturer of Magento is based in the USA. That is why the shop is almost ready to go on the American market. In Germany things are missing, such as correct labeling of the VAT, the translation, adjustment to the currency, the appropriate date format, etc. In addition, special requests must be taken into account.
The European market (approx. 1-2 days)
Thanks to extensions like MageSetup & Co., the shop can be quickly adapted to the German market. If a finished theme is purchased, it is often delivered without a German translation. Translations are necessary here. Tax classes for reduced taxation (7% VAT), fully taxed items (with 19% VAT) & Co. are also required.
If seals such as Trusted Shops are required, more adjustments are necessary. These amount to about 1 day (depending on the scope).
A further 1-2 man days are required to adapt to the German market.
What types of products?
If you are only selling simple products, the program logic is simpler. For example tools such as hammer, screwdriver or a saw. There are many different. But every product is a separate article.
In comparison, there are also configurable products. Like t-shirts, for example. A shirt may be available in several sizes. The same product, just in a different size. A cost factor, especially when it comes to design.
Bundled offers may also be available. Instead of a single screwdriver? They also offer a set of 5 individual products. The design has to be prepared for this too.
Price scales, vouchers & Co
Put simply, a simple shop has simple prices; the customer can order and pay. The shop confirms success or reports errors. Send an email at the end.
But that can also be more complex.
Volume discounts can also play a role. Or certain customer groups receive different purchase prices (especially B2B). Maybe you also need vouchers for marketing? All of this must of course also be established or partially developed.
There are a lot of extensions and adjustments. But that sounds pretty abstract, it’s not tangible. So here is an example of the necessary programming: configurators for products.
A classic example could be T-shirts. The customer can upload their logo, maybe place text? Or design promotional items? Or configure tailor-made shirts? All of this requires additional logic.
Unfortunately, it is not possible to name a price here, as complexity always counts. But such tasks are not trivial either.
What to do?
The price factors mentioned here are based on your business. Only the adjustments for the German market need to be planned in 1-2 days (depending on the theme).
4. Extensions and connections
Magento is expandable. Many standard functions such as payment methods, shipping providers, etc. can be implemented using extensions. Not every shop uses the same routes. In addition, your product catalog can be linked to external systems. Such decisions also affect costs.
Connection to Amazon & eBay
Many small and medium-sized shops in particular like to use the connection to eBay and Amazon. Articles can be sold through the platforms and orders can be imported automatically. While this is not a big problem with finished extensions, at least time must be allowed for setting up.
The effort depends on the scope of the product catalog, but is roughly one working day.
Another decision rests with payment providers. Magento extensions are available for common types such as PayPal, direct debit, prepayment, etc. Most of them are available, especially with Magento 1.
However, the effort involved in setting up is always different. Especially since a test scenario has to be set up so that no real money has to flow in the tests.
In addition, contracts must be concluded with the provider, for example for credit card payments. At the same time, adjustments to templates are necessary in various cases so that the payment method is also perfectly integrated visually.
The costs per payment provider are usually in the range of a few working hours.
There are also various solutions for logistics. Is the provider only named in the shop? Or are companies like DHL and UPS addressed directly? Is a new package automatically reported via the shop?
Shipping can also become more complex. What if shipping costs are based on weight? Or some items are even sent as bulky goods? Both information must be maintained in the products. And the shop has to be prepared for it.
Here, too, there are partially complete extensions. Nevertheless, the setup and especially the quality assurance is done manually. A few hours are also necessary here for each provider.
Sometimes there are unusual situations. Can the customer pick up products and then pay in cash? Sometimes there are extensions for this. But maybe someone in the shop should be informed in advance? By email or SMS?
Or is there an accompanying app for iPhone & Android? The customer could be informed about this when shipping. It is possible. Something like that just has to be implemented. And that just takes time.
Even if, of course, the individual costs cannot be mentioned here. It shows that such details also determine the total costs.
What to do?
If in doubt, it is enough to start with the usual payment methods and a shipping provider. The combined costs then usually amount to a maximum of one man-day.
5. Order management & Co.
The further processing of orders plays an important role. What happens after the Magento shop has entered an order? There are different possibilities.
Simple Magento shop
A simple shop records the orders. The customer pays, the shop sends e-mails & Co. Your logistics work with Magento administration and marks parcels as shipped. Cancellations & Co. are also managed via Magento.
This works well in small amounts, but it becomes time-consuming later on. Warehouse management & Co. also reaches its limits at some point.
Merchandise management / ERP systems
When the warehouse becomes more complex and orders become more frequent, inventory management (WaWi) and ERP systems help. Orders can be managed via this. The inventory can be viewed at any time. Invoices can be written. In logistics, employees can process packing slips and simply enter products with barcodes. And so on.
What sounds interesting in any case, but comes at a certain price. For one thing, such solutions are an investment in themselves. The workflows and processes must be created. And then the shop has to be connected:
Magento reports new orders to the software
For example, the software must report the inventory to Magento.
Does Magento keep sending emails? Then the shipment must be reported.
Any generated invoices will be transmitted
and so on
Even if larger providers deliver finished extensions. Often further adjustments have to be made to the rest of the shop. Such scenarios are therefore not trivial and are a big factor in the final price.
What to do?
Unsure which solution is better? When a shop restarts, don’t think too complicated. Anyone with a large marketing budget who is waiting for many orders directly plans differently. When you start a new shop, you start without ERP / WaWi.
Process orders, warehouse management & Co. will no longer work manually at some point? A luxury problem. Do not solve it until it really occurs.
6. Ongoing costs
A Magento shop makes clear demands on the server. The software is more complex than many simple websites. What at first glance appears to be a disadvantage, Magento pays back with great flexibility. The whole system can be expanded neatly without having to “patch things up” at any point. But of course the hosting has a price.
Simple shared hosting is not enough for Magento. It should be a separate web server for Magento. On the one hand, performance is important. Access via SSH is also required. But what is more important (without getting too technical):
Various caches like Memcache (for sessions) or Varnish (web frontend) do not work with hosting packages. A separate web server can also optimize PHP (OPCache, HHVM, etc.).
The costs are probably at least 50 euros per month, regardless of the provider.
Shopping on the Internet requires a lot of trust in the provider. Do I even get my goods? Is the product as described? Are my details safe? Ultimately, trust in the website and provider plays a central role.
SSL encryption plays an important role in this. Sensitive data such as address, account information, etc., cannot be intercepted. An SSL certificate is therefore important for eCommerce providers.
The SSL certificate is a technical requirement for encrypted communication between the customer’s computer and your shop. It now also plays a role in the Google ranking. As a signal of trust to customers who enter sensitive information on the website, it is indispensable.
The cost of a certificate is around 200 euros a year.
Maintenance & care
Apart from possible adjustments, there are always updates. In addition, a backup must be made regularly. It is important to control that. In an emergency, your entire turnover, order history and therefore a lot of money depends on correct backups.
Imagine the following:
It’s Saturday evening, 9:37 pm. You are sitting with friends in the living room. Nice conversations, cozy light. They had dinner together beforehand. Your smartphone vibrates.
Email from server monitoring. The shop cannot be reached.
Ok, don’t panic. The agency has an emergency hotline. Call, the doorbell rings. The contact person has also received the SMS and is already working on the solution. He answers again. You turn back to the conversation, suspecting no harm.
Half an hour later her phone rings. The developer on the other hand. His voice sounds a bit depressed. With a lot of technical words he tries to explain a simple fact to you:
Server crash. Hard drive broken. Recovery does not work.
Good news: the code is not lost. There are backups. But the database…
It cannot be restored. The current backups do not work. The last backup? Is over 6 months old…
The orders of the last few months are all lost. Incl. Customer accounts.
Such damage quickly results in damage in the range of several thousand euros.
In this situation you would wish: If only I had invested a few euros in regular maintenance…
What to do?
Calculate with about 50 euros per month for hosting upwards (depending on the number of visitors). The SSL certificate is also mandatory. Correct maintenance including backups and backups starts at around 50 euros a month. Money that is well invested in an emergency.
7. Sample calculation
So what does a Magento shop cost? Here is an example calculation for a simple shop:
Open source version: free of charge
Basic installation & configuration: 1 man day
Finished design: approx. € 200
Adjustments to the theme: approx. 1-2 man-days
Adjustments for the German market: approx. 1-2 man days
Payment methods & shipping costs: approx. 0.5 man-days
This results in an effort of around 3.5 – 5.5 man-days for a very simple shop. In addition:
The design with about 200 €
An SSL certificate with 200 € / year
Hosting with approx. 50 € / month
Maintenance, backups & Co: approx. 50 € / month
If we calculate with a low agency hourly rate of 80 euros per hour (640 euros per man-day) that is around 2200 € – 3500 € (plus VAT) for a simple shop.