On any e-commerce platform, the costs associated with running and maintaining your store are vital pieces of information for entrepreneurs to understand. In Magento’s case, the costs involved in running an online store include everything from developer costs to hardware and server expenses. Understanding what drives these expenses is vital to ensuring your company’s profitability.
Developer Costs
The developer costs in Magento are essentially the salaries of any employees you may have working on your business. This could include marketing, sales, design, IT, and more employees. The number of employees you have and what they do is directly tied to your total operating costs. As such, it’s important to ensure these employees are achieving their goals in an efficient manner. You should also ensure you are utilizing all of your human resources to reach maximum capacity.
Some store owners who don’t want to hire an in-house development team may work with an agency. Magento agencies charge based on hours, per project, or fixed price. Depending upon how big a Magento store is, these casts can range from a few hundred dollars to a few thousand dollars a month.
Hardware or Cloud Hosting Costs
The hardware or a cloud service you use to run your business is another factor that affects your total costs. Magento’s case includes your servers like Amazon AWS, Google Cloud, and even a. computer, laptop, smartphone, and any other device you use to run your operations. The cost of these devices is obviously a factor in how new they are and the quality of the hardware. However, there are other factors that come into play that impact the cost. For example, is your business using proprietary technology? If so, that will increase your hardware cost because you have to import it. Also, consider where you’re running your business from. If you’re operating out of a foreign country, the cost of shipping hardware will increase.
Server Costs
The servers you use to store and deliver your website’s content and products to customers are a major factor in your Magento costs. This is a major investment and will greatly affect your scalability. Therefore, it’s important to ensure you’re using the correct servers to meet the needs of your traffic and sales goals. Ideally, you should work with a provider with the correct servers to handle your workload.
A Guide to Understanding Magento E-Commerce Costs
Cost Analysis
While your server costs are generally going to be fairly significant, there are several factors that affect your total Magento costs. For a deeper dive into how Magento fits into the e-commerce landscape and what it can do for your business, visit our industry report.
Business Licensing and Setup
To get your Magento store up and running, you’ll need to invest in the setup costs and licensing fees. Depending on what you’re using Magento for (S-Corporation, LLC, etc.), your licensing fees could range from $499 to $2,499.
Cost of Goods
The cost of your products will greatly affect your bottom line. If you’re manufacturing your own goods, the costs to create these products will come out of pocket. The wholesale price will influence your Magento costs if you’re buying goods.
Shipping Fees
Delivering your products to your customers is another major factor in your Magento costs. If you’re shipping products to customers across the globe, your shipping costs will add up. This includes the cost of shipping materials, processing, and any fees imposed by governments or airlines.
Hosting and Scalability
As your business grows, you’ll need to ensure your server can accommodate the growth. This may mean additional cloud hosting or upgrading to a larger server.
That depends on what you need it for and how much you’re willing to invest in its maintenance.
