Published on September 08, 2012 It costs more to rent an exercise bike than to maintain a web shop
With Australians set to spend $16 billion online this year according to new research, if you have been considering getting online you will need to weigh up the cost of not being online as well as what it costs to maintain your website if you want to have a chance at a “piece of the pie”. Do you want to miss out on a $16 billion dollar industry that has grown 17% in the last 12 months?
Many small business owners do not take the leap to online as they worry about the setup and monthly cost of running their online business, but it is surprisingly smaller than it is perceived to be when you compare the monthly costs of running an online store to those of even a simple piece of personal item of expenditure like renting your own exercise bike.
For example, the cost of renting a good quality exercise bike is somewhere around the $80-$150 mark per month at the moment, compared to the monthly cost of having an online shop of $49 upwards.
What’s more your business is a productive asset that can be pay for itself, whereas personal expenditure is spent and never recovered.
The value for money equation for running a business looks even better when you think about what we actually spend as Australians on average (as reported by the ASIC’s Money Smart Website – https://www.moneysmart.gov.au/managing-your-money/budgeting/spending/australian-spending-habits):
- Holidays $208 ( 4 x Average weekly spend of $52)
- Mobile Phone $48 ( 4 x Average weekly spend of $11)
- Audio Visual Equipment $56 (4 x Average weekly spend of $14)
- Recreation $424 (4 x Lowest reported Average weekly spend of $106)
The ongoing costs of running a business, besides the business-specific costs relevant to your industry (stock, business management issues) for a hosted ecommerce solution are surprisingly low and consist of just your monthly hosting and support provided you select a provider that does not take a cut of your earnings. You will have to pay your bank and merchant gateway for transactions, but that’s a cost of making a sale as well as your overhead costs like stationery, power, lighting, transport, etc.
Your basic online costs will be:
- Your domain name (a .com.au is only paid every 2 years)
- Your monthly hosting and support fee for a hosted shopping cart provider (from just AU$29 with Ozcart Ecommerce)
- Your design cost (paid one off up front)
- Your bank fees and payment gateway fees (depending on transactions and the plan you have)
- Your business expenses (depending on your specific business stock, stationery, overhead, postage, etc.).
We recommend that you put together a business plan for your business before getting started on your business, so you understand your market potential and set appropriate goals. The first step to getting there of course is to overcome the barrier of believing that running an online store is expensive. If you can do that, then you are well on your way to having your own slice of the $16 billion online industry in Australia.
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