What is the approximate cost of starting an online business?

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Hi @msaci

This is a great question to ask. Understanding your overhead costs are going to allow you to set better pricing margins and budget in your first few months.

Are you dropshipping your products, or are you selling inventory that you store yourself? The costs for those two different types of businesses are a bit different. But in general, these are some of the standard fees you might see when starting an online store.

Please note: These are average prices, each fee I note could be different and could also change at any time. This is just to provide a general outline of the fees you can expect.

Shopify Subscription: Shopify Basic plan is $29 USD a month and where most merchants start.

Custom domain: Averages $14 a year, but can go anywhere from $1 - $100s of dollars.

Theme file: Free or premium (average $150-$300 USD for life).

Product sourcing/dropshipping apps: Either they are free to use, but have slightly higher product prices for dropshipping or print on demand or they average $20-$30 USD a month. Some of the most popular ones in our App store currently:

Marketing: This is a tough one. Different platforms can cost widely different. If you are advertising on Facebook you might be spending $20 a month on advertising where as Google might be $200 a month. The general recommendation for your marketing fees is that you should be paying around 2%-5% of your annual revenue on marketing.

Payment Gateway: Most payment gateways will not charge you an upfront fee to use their services, but will instead charge a processing fee on any payments they process. For example, our gateway Shopify Payments on the Shopify Basic plan charges this much per transaction processed: 2.9% + 30c USD. You can find the detailed breakdown on this in our pricing page I linked above.

You can learn more about understanding start up costs in our Blog as well. We have a great breakdown of the costs to consider and what an average small business spends per year on fees. Each business is unique though so take these price quotes with a grain of salt!

Research: What Does It Really Cost to Start a Business? (2021) - Shopify Canada

If you have any additional questions don’t hesitate to reply back and let me know.

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