Join me as we look at all the main factors that impact the cost of an eCommerce implementation, and then what you should expect to be paying for it for consumer sites, mid-market sites, mid-tier sites, and enterprise.
Join me as we look at all the main factors that impact the cost of an eCommerce implementation, and then what you should expect to be paying for it for consumer sites, mid-market sites, mid-tier sites, and enterprise.
We’ll also cover the main factors that affect an eCommerce implementation:
All right, so what are the actual factors that affect an eCommerce implementation?
Now look, there could be lots, but let's focus on some of the big ones.
Number one, it's gonna be your licensing cost.
You're gonna pick a platform and you gonna have to pay that platform provider or that software provider some sort of licensing fee.
The next thing you're gonna have to decide is are you gonna spend money on a custom design and customizing the user experience? Or are you gonna use some of the out-of-the-box templates or out-of-the-box widgets that the platform's gonna provide you?
How many integrations are you gonna have to go through?
And what kind of payment gateway and security measures are gonna be taking?
That's really the high level.
Those are the big things that are gonna impact your eCommerce implementation.
Now obviously what kind of solution provider or partner you choose, your system integrator is gonna make a difference, how much experience they're gonna be bringing.
There are gonna also be costs after you go live.
You're gonna have to register your domain name. You're gonna have to host the software potentially. You're gonna have to do your marketing and SEO efforts to drive traffic.
There's gonna be ongoing maintenance, support, but those things come after the implementation.
Let's focus on those first three I spoke about, those first four that I spoke about, and really talk about what it takes then to implement an eCommerce solution.
So the first thing you're gonna do is choose a platform.
There's the big ones out there, there's Shopify, there's Salesforce Commerce Cloud, there's Magento, there's WooCommerce, there's a whole bunch out there. You're gonna have to pick a platform. Now this video's not gonna be about how to pick a platform. We can go into that a little bit later.
But let's say you picked your platform.
The first big decision you're gonna make when you pick a platform is how customized do you want your eCommerce experience?
Now, a lot of times what people think about eCommerce experience, you guys are thinking about the design. What does my website look like? Actually, that's the cheaper part of actually customizing your website.
Here's how I want you to think about it. Every website has an out of the box user experience. Every website or every platform has an out-of-the-box set of features.
What we often confuse is what does an out-of-the-box feature mean versus what an out-of-the-box experience means.
So for example, every single platform that I've mentioned today is gonna have a login, is gonna have a forgot password flow, is gonna have a checkout flow, it's gonna have search.
When your business users, or when your business is saying, hey, I want my checkout to look a certain way. I want it to offer a specific type of experience. It's usually a combination of functionality and features and the actual user experience.
The more customized and the more unique this becomes for your brand, the more expensive it's going to be. So your website design and customizations are gonna be one of your first major expenses.
When you're there, you're looking at anywhere from $25,000 all the way up to $500,000 to a million dollars to do a full user experience design and study.
That includes user research, designs, often can be over a six month project.
Or you can just use the out of the box, which oftentimes can cost you as little as $25,000 because you're just gonna make small tweaks. Some CSS to get your colors on there and you're gonna use your out-of-the box template.
Now, which one's right for you?
You know, that's a very personal question for your business. I'm always a big believer in start with the simplest, out of the box that you can.
Understand where your clients are getting impacted the most, understand what your clients are asking for more, and then spend the money to really optimize that experience.
So website design and customization, there's a whole range of things that you could be doing. Cost you anywhere from $25,000 all the way up to a million dollars and always remember that you have to think about the differences between functionality and user experience design.
Those are two different things, but they often get confused.
Alright, the next big cost that often keeps our clients awake at night is integrations.
You've gotta integrate some really basic concepts and really what we call basic objects or basic business entities into your eCommerce website.
I'm gonna name some of 'em off. You gotta your get your product in there, right? You gotta get all your inventory in there. You got your pricing in there, you've gotta get your promotions in there, you've gotta get your customers in there, you've gotta get your orders out of there.
All these things and more have to get integrated with your eCommerce solution.
Now, what does an integration actually mean?
In the simplest sense, we've gotta get data from one of your core systems into your eCommerce, and we've gotta get data out of your eCommerce into your core systems. That's all it means.
Now, you could do that as a one time load. You could upload all your customer data, all your product data, all your pricing data, all your inventory, everything as a one time load, as a CSV. This is obviously the cheapest way to do it.
Oftentimes what your partner will say is, hey, why don't you just get me everything, in an Excel file or a CSV, a comma separated file, and I will go ahead and upload that into let's say Salesforce Commerce Cloud for you. And then all of a sudden all your data is there.
What's the problem there?
Obviously the data is static, it's never changing.
Your business, especially if you're a larger, $300 million plus business is always changing. Your inventory, your pricing, what products you're offering, the content for your products is always changing.
So what they wanna often do is have an integration between a source system and a target system. And when we say source system, it could be a lot of systems but we always recommend creating the right architecture so that you have the right system of record.
So when you're looking at integrating, now you're talking about a different level of cost. And integration costs are some of the hardest ones to define because it's really the biggest cost in integrating between let's say your ERP, and your new system, let's say Salesforce Commerce Cloud, is gonna be how clean is your data, and what type of experience do you wanna provide downstream?
Now, in a general rule of thumb, I would, if your data is relatively clean and you're doing a relatively simple website implementation where you're, one in automated integration with all your catalog data, customer data, order data, pricing data, but your data is not very complex.
You could probably get by with an integration cost of somewhere between $50,000 to $150,000.
The major chunk of this is time and having the right integration architecture you're gonna have to have schedulers, i.e. when is my pricing data gonna get updated? Is it gonna get updated in real time?
So if your ERP updates, are you gonna instantly push that data to your system? Probably not, that could be quite expensive from a performance standpoint. Most likely you're gonna have this on a schedule, maybe every night, or twice a day or four times a day.
Again, work with your system integrator to figure out what's right for you.
That integration architecture, getting that all set up is what really takes time. And then setting up the definitions between what are your source elements. i.e. you might call price PRC, and your target system might call it PRICE.
So you've gotta do that source to data mapping but then you also might have business rules that if my price is this way, then you need to do this. If my price is that way, you need to do that.
Those business rules need to get understood.
So the biggest cost in integrations is:
The actual implementation of the integration is probably 30% of the cost.
So again, for a simple implementation you're looking at anywhere from $50,000 to $150,000, for more complex implementations, it could go way up.
And again, if your data's not clean you might actually have a master data, a master data project on your hands before you actually have an eCommerce implementation on your hands.
And then finally your payment gateways and security measures.
Thankfully, nowadays there's a lot of this stuff that comes out of the box. If you buy a lot of the more enterprise-grade platforms they'll have a lot of security measures already implemented because they'll own the hardware that's hosting, they'll have all of the security protocols necessary to make sure that your data is secure in their servers.
And then your payment gateways are typically charging you anywhere from 2% to 4% or maybe 2.5% to 4% of your order total to process an order.
Now if you're a B2B organization and you're often gonna be implementing things like punch out or you're gonna be accepting payment terms, like net-30, net-60, net-90, obviously those costs are directly dependent on what your processing firms are charging you.
But typically rule of thumb for your payment gateways and security measures, anticipate anywhere from 3% to 4% of your order totals to have that going.
So what have we got?
You got your platform selection costs, you got your website design and customization costs, you've got your integration with existing systems costs, and you got your payment gateways.
Now platform selection is obviously one price that's gonna vary by platform.
Your website design and customization anywhere from $25,000 up to a million dollars.
Your integration with your existing systems anywhere from $50,000 to $150,000, your payment gateway costs are anywhere between 3% to 4%.
And then when you add this all together with the cost of actually bringing in your system integrator do this work.
Here's how I'd break it down.
For your do-it-yourself platforms. If you're launching a Shopify basic site or a WooCommerce site and you're building a relatively nice site, that Shopify has a lot of great out of the box templates, I think you should be able to get by with anywhere from $5,000 to $25,000 for Shopify Basic.
Now mid-tier platforms, Shopify Advanced, BigCommerce, I think you're looking at anywhere in that $50,000-$150,000.
Now, enterprise level platforms like Salesforce Commerce Cloud, Magento, where you're looking to really drive serious revenue from your eCommerce site, flexibility, performance, complex pricing, complex configurations, you're a manufacturer/distributor that's looking to support your distributors or support your end business buyers, you're probably looking somewhere around $300,000 to $500,000 to do an implementation.
And this should get you everything. This should get you your website design and customization, but more on the out of the box side.
You should be able to do all your integrations to all your core source to target systems. And those should be automated integrations with proper security implementation of a middleware platform like MuleSoft, so that you can manage those integrations.
You should have your payment gateway all set up, and then all your content, all your imagery, everything should be set up from soup to nuts.
That includes requirement capture, it includes all the design work, it includes the implementation and includes testing.
So for an enterprise-level platform, somewhere in that $300,000-$500,000 range. Now of course we've done implementations that we've seen have cost our clients north of 5, 7, 8, 9, 10, 12, 15.
We've seen projects run into 50 million. We've never done one of those, but there are some really, really large implementations that take a lot of different things into account.
It could go up there, but if you are a company, again, $300 million and up in revenue that's looking to launch an enterprise class platform, $300,000-$500,000 should give you a fantastic opening experience on say something like Salesforce Commerce Cloud, something that you could really be proud of, something that'll form the foundation.
But again, your goal is to generate a return on investment and you should be looking at, hey, what are the challenges that this implementation is going to solve for me?
Is it gonna make my sales reps' lives easier?
Is it gonna make my buyer's lives easier?
What are they gonna be able to do? And what are the results that that's gonna get you? So if you're gonna be spending $300,000-$500,000 on implementation, I'm looking for at least a 10x return on investment.
If your partner cannot show you how that's gonna generate $3 to $5 million to your bottom line over the course of the next 12 to 36 months, there's something wrong.
If you're gonna spend that much money, you should be able to level up the $3 million to $5 million added to your bottom line and definitely make that worth your time and worth your investment and worthwhile the money that you're putting into the experience of launching that platform.
Alright, so we've gone over the factors affecting eCommerce, we've gone over the cost ranges for different eCommerce solutions from consumer basic sites, to mid-tier platforms, enterprise platforms, and we've gone over what we think are the right things to look into when you're looking to generate a return on investment.
In the next video, we'll look at the hidden costs, why do projects 70% of the time go over budget?
We'll also be looking at tips to optimize eCommerce implementation costs once you've gone live in maintenance and support.
Again, thank you.
This is Rohit Garewal with another video on answering your questions around digital transformation, and if you have any questions leave a comment below and we'll be happy to see if we can make a video to answer those questions directly for you.
Thank you.
