One of the big questions when you’re thinking about opening an online store is related to expenses.
By now you’ve probably figured out that it’s impossible to get a free deal. It’s true that you can cut costs by making certain choices, but you won’t find zero cost even in fairy tales.
So, for today’s article, I’ve made a list of expenses to expect for your online store.
They’re applicable no matter what type of business you open or what business model you choose.
Let’s see what it costs you, on average, to open an online shop.
Contents Online shop expenses – what to expect?
- Opening the company
- Product supply
- Site creation
- Shop management and logistics
- Team and administrative
- Marketing
- Depreciation
1. Opening of the firm
To sell online legally in Romania you need a legal form and you must comply with the legislation in force. This implies a collaboration with some specialized service providers.
The costs of opening a company are not very high. You can choose between PFA, II, SRL, SRL-D and other forms, which is the most relevant and advantageous for you and your intentions.
Basically, you need to declare a share capital – minimum 200 lei. You also have some fees for filing the opening file and reserving the company name, specimen signature, translations if necessary, etc.
You can take care of the opening of the company yourself or you can outsource this activity to companies offering such services (in this case you have some extra fees, but at least you are 100% sure you don’t make mistakes).
Set aside some money for the services of an accountant. This is saintly, especially if he has experience with other firms doing eCommerce. It also doesn’t hurt to work with a lawyer, to guide you on eCommerce and GDPR legislation.
Another potential expense when opening a business is related to market research. It can cost you if you use market analysis services or perhaps buy an existing report about your niche and the behaviour of your buyers.
2. Product sourcing
Ok. Once you’ve got your company open and you’ve outlined a business plan, it’s time to source the merchandise you’ll sell online.
Here you have various expenses, depending on the volume and type of merchandise:
- Net cost of goods
- Cost of delivering products from supplier to you
- Cost of creating products (if you produce them yourself)
- Raw material cost (if you produce them yourself)
- Cost tools create products (if you produce them yourself)
At this point you also choose the stock form of your shop.
You can have one or more of your own warehouses, you can do dropshipping (and then the expenses for the delivery of the products can be borne directly by the customer to him or by you, for certain purchases) or you can have a hybrid form of stock (inventory at your place for best sellers and stock at the supplier’s for less purchased products).
More on stock-related expenses in point 4.
Read also: 5 steps to creating a budget for your small business
3. Creating your website
When you’ve got past the “sourcing” point, you can also start creating the website for your online shop.
Why now?
Because if you have suppliers or know what products you produce you will sell, you can create an import file so that you can upload those products to the site.
Of course, you can also add them manually, one by one, if you have fewer items.
What expenses do you incur for the site?
- Domain and domain hosting – around 20 – 25 euro per year
- SSL certificate
- eCommerce Platform – if you choose SaaS, how is unosoft, you have a fixed cost per month / year. For example, for the annual Pro subscription, you invest 87 euros per month.
- Costs related to content creation for the website – texts / page and product descriptions, product photos, product videos, banners, logo.
- Product documentation outsourcing (if you want someone else to create the content and upload it)
- Premium applications and extra integrations – Commissions of additional sales channels such as price comparison, marketplace, integrators.
Read also: What is involved in opening an online store
4. Store management and logistics
We continue from point 2 with the shop management and logistics part of your business.
These come with some expenses, some more obvious than others.
- One or more people to handle the administration of the site and orders – if necessary, probably after your shop grows. You can save some money with the help of GoBoats – to automate order management, website, post order communication via email and SMS.
- Carrier – depending on the courier company you choose to deliver your parcels with. We can help you to optimize these costs with GShipments – for each order you can choose the carrier that offers you the lowest delivery price.
- Payment processor – per order. Lower costs if you activate unosoft Payments service platform, where we have already negotiated preferential commissions for you.
- Invoice orders – you’ll have software that does this automatically, starts at ~10 euros per month.
- Customer support – if you don’t take care of this yourself, you’ll have to hire someone to answer on chat, email or phone.
- Warehousing – space, insurance, utilities, warehouse furniture, WMS platform, employees.
- Parcel packing – boxes or envelopes, inserts in parcel, AWB printing, extra gifts, various other details.
- Outsourcing logistics operations – You can avoid most of these processes if you outsource logistics to a fulfilment platform.
- Taxes and duties (depending on chosen legal form, turnover, other details)
Read also: SMART goals: how you set them to achieve a successful business
5. Team and administration
Perhaps in the beginning you will manage the business from your own home, where you are likely to keep stock or some of it.
But as the number of orders grows, you’ll need to hire more and find a workspace for you and your colleagues.
In this case, administrative expenses include the following:
- Salaries and bonuses + training courses
- Recruitment costs
- Workspace – Office, storage, workspace furnishings, appliances, household and cleaning supplies.
- Utilities and insurance
- Hardware
- Protection equipment – if applicable
- Service car
6. Marketing
Without marketing, your store has no potential to grow.
You need multiple methods of promotion, across multiple channels, in order to reach the widest possible range of customers.
Sure, there are some marketing techniques you don’t necessarily have to invest money in, if you know or learn how to do them yourself.
You’ll invest time – a resource worth more than money – but, in the end, the choice is yours.
What marketing expenses you’ll incur for your online store:
- Budget – Google Ads, Facebook Ads, TikTok Ads, affiliate, influencers etc.
- Marketing tools – Email marketing platform, SEO tools, social media marketing automation, premium tracking tools (heatmaps, for example).
- Premium on-site marketing and sales applications.
- Hiring in-house specialists (if applicable)
- Outsourcing to a specialized agency or freelancers (content creation, account management, consulting).
7. Depreciation
Another expense-related thing to keep in mind is the depreciation of certain assets over time.
You should be aware and be able to predict when this will happen and how it will affect you.
What assets that cost you can depreciate over time?
- Office equipment
- Machines
- Returns – The merchandise may be damaged, so you can’t sell it. Depreciation in value, transportation and handling costs.
- Unsold merchandise – Stocks that don’t move eat up your space and money. How do you stimulate sales? What costs are involved?
Read also: 9 hidden costs of a small online business
These are pretty much the expenses to expect for an online store.
Of course, they can be lower in the beginning, especially if you don’t have generous budgets.
But as your business and customer base grows, you’ll have to invest more to satisfy your customers and earn more revenue.
We’ve mentioned here the most common ones for a medium/large online store, so you know what to expect in the future 🙂 .
Don’t panic after reading this list. Because as you have expenses, so do revenues and profits.
With a smart strategy and constant connection to the market, you stand a good chance of having a profitable business that grows and grows successfully.
Before you go, take a look at unosoft and try the free platform. You have 15 days free demo right, no obligation.
We help you launch fast and reduce your costs as much as possible to sell online every day.
Passionate about entrepreneurship and eCommerce, I started my online activity in 2000.
Together with my team I have helped over 2,200 companies grow their business on the unosoft platform.
