The cost to start an online store: a realistic budget

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The cost to start an online store is more than a platform subscription. You also pay for payment processing, apps, a domain, design, product photos, inventory, packaging, shipping and, above all, marketing to bring customers. Many new store owners underestimate these costs and run out of money before the store gains traction. This guide lists every cost category, explains what drives each, and builds a realistic first-year budget you can adapt.

The main cost categories

1. Store platform subscription.
2. Payment processing fees.
3. Domain and email.
4. Theme and design.
5. Apps and plugins.
6. Product photos and content.
7. Inventory or product costs.
8. Packaging and shipping.
9. Marketing and customer acquisition.
10. Business registration, accounting and legal.

Our online store cost calculator helps you estimate monthly and first-year costs across these categories.

Store platform subscription

Hosted e-commerce platforms charge a monthly subscription that includes hosting, security, checkout and store management. Plans differ in features, staff accounts and transaction fees. Shopify, for example, lists Basic at USD 39 a month, or USD 29 a month on yearly billing, with higher plans for growing stores; it also offers a short free trial and introductory pricing on most plans. Tiendanube and Nuvemshop offer free starter plans in Latin America.

Prices from vendor websites, checked 2026-10-12; they update automatically.

Compare platforms in the e-commerce ranking, Shopify vs Wix and Shopify vs Tiendanube, and check free e-commerce plans.

WooCommerce: lower subscription, more work

WooCommerce, the WordPress store plugin, has no platform subscription, but you pay for hosting, a domain, a theme, and often paid extensions for payments, shipping and marketing. You also manage updates and security. It can be cheaper or more expensive than hosted platforms depending on the extensions you need and your time. See website builder or WordPress and web hosting cost.

Payment processing fees

Every online payment carries a fee, typically a percentage plus sometimes a fixed amount, which varies by country, payment method and provider. Some platforms add transaction fees if you use a third-party gateway instead of their own. On thin margins, payment fees take a large share of profit, so include them in product pricing. See payment gateway fees explained and the payment gateways ranking.

Domain, email and design

A domain costs a modest yearly fee; see how to choose a domain name. Business email costs per user per month if not included. Platforms include free themes, and premium themes are a one-off or yearly cost. Custom design by a freelancer or agency costs more; see small business website cost. Many successful stores start with a well-chosen free or premium theme and invest in design later.

Apps and plugins

Apps add features such as reviews, email marketing, upsells, shipping rates, subscriptions, loyalty and accounting sync. Each may cost a monthly fee, and they add up quickly. Start with the essentials, measure whether each app pays for itself, and remove those that do not. Check your platform's built-in features before adding apps that duplicate them.

Product photos and content

Good photos sell products. Options include photographing products yourself with a smartphone, a simple light box and natural light; hiring a photographer for a day; or using supplier photos if allowed, though unique photos help both conversion and SEO. Write clear, original product descriptions. AI tools can help draft descriptions from accurate specifications; see AI writing tools for marketing.

Inventory and product costs

If you hold stock, inventory is often the largest upfront cost. Start with a limited range of products you expect to sell, order small quantities where suppliers allow, and reorder based on sales. Alternatives include dropshipping, where suppliers ship directly to customers, and print-on-demand, where products are made when ordered. These reduce upfront costs but usually mean lower margins and less control over quality and delivery times.

Packaging and shipping

Include packaging materials, labels and shipping costs in your budget and pricing. Decide whether to charge customers for shipping, offer free shipping above a threshold, or build shipping into prices. Compare couriers and postal services, and consider pickup points or local delivery for nearby customers. Returns cost money too; set a clear returns policy.

Marketing: the cost most people underestimate

A new store has no visitors until you bring them. Marketing costs include paid ads, influencer or affiliate commissions, email marketing tools, content creation and SEO effort. Many store owners spend more on customer acquisition than on everything else combined. Plan a monthly marketing budget, test channels with small amounts, and track results with tagged links from the UTM builder. Build an email list from day one; see email marketing for beginners and LTV and CAC explained.

Business setup costs

Depending on your country, you may need to register a business, register for VAT or sales tax, open a business bank account, and get accounting software. Budget for an accountant's help with setup and year-end. If you plan to sell internationally from a US company, see how to form a US LLC from abroad. Accounting tools are compared in the accounting software ranking.

A sample first-year budget

For a small store selling physical products, a first-year budget might include:

• Platform subscription for twelve months.
• Domain and email.
• A premium theme or modest design help.
• Two or three essential apps.
• Product photography.
• Initial inventory and packaging.
• A monthly marketing budget for ads and content.
• Business registration and accounting.
• A contingency of 10% to 20% for surprises.

Enter your figures in the online store cost calculator, and check that expected sales cover costs with the break-even calculator.

Pricing to cover costs

Set prices so that, after product cost, packaging, shipping, payment fees and an allowance for returns, each sale leaves a contribution towards fixed costs and marketing. Use the profit margin calculator and see margin vs markup. Low-priced products with thin margins make it hard to afford marketing; many successful small stores focus on products with healthy margins or encourage larger orders.

Ways to start lean

• Start with a free trial or free plan and a free theme.
• Launch with a small product range and expand based on sales.
• Take your own photos.
• Sell on social media and WhatsApp alongside your store.
• Use pre-orders to test demand before buying stock.
• Add apps only when they solve a real problem.

Common mistakes

• Budgeting only for the platform and forgetting marketing.
• Buying too much inventory before testing demand.
• Installing many paid apps at launch.
• Ignoring payment and shipping costs in prices.
• No contingency budget.
• Not tracking which marketing channels bring sales.

Monthly running costs after launch

After launch, a store's monthly costs usually include the platform subscription, apps, email marketing, payment fees, shipping and packaging, marketing spend, and stock replenishment. Track these monthly in your accounting software and compare them with revenue. Many stores find that apps and subscriptions creep up over time; review them quarterly. Our software price tracker helps you spot price changes in common tools.

Example: a handmade goods store

A jewellery maker launches a store on a hosted platform with a premium theme, her own product photos and three apps: reviews, email marketing and shipping labels. Inventory is mainly materials, bought in small batches. Her largest cost is marketing: Instagram ads and collaborations with local creators. In the first six months, she tests channels with small budgets, finds that creator collaborations bring buyers at a lower cost than ads, and shifts budget accordingly. Her break-even point is clear because she tracked every cost from the start.

Example: a dropshipping store

A first-time seller starts a dropshipping store with no inventory. Upfront costs are low: platform subscription, theme and a few apps. But margins are thin after supplier costs, payment fees and ads, and delivery times are long, leading to some refunds. He learns that customer acquisition cost is the deciding number: if ads cost more per sale than the margin, the store loses money on every order. He narrows to a few products with better margins and builds an email list to win repeat orders without paying for ads each time.

Returns and customer service costs

Returns cost shipping both ways, handling time, and sometimes unsellable products. Clothing and footwear typically see more returns than other categories. Set clear policies, provide accurate size guides and photos, and track return reasons to fix product pages. Customer service takes time too: answering questions, tracking orders and handling complaints. Budget for these, and use a help desk or shared inbox as volume grows; see shared inbox vs help desk.

Cash flow timing

Online stores often pay for stock and ads before customers pay, and payment providers may hold funds for a few days. A store can be profitable on paper and still run short of cash. Plan cash flow month by month, especially before peak seasons when you need extra stock. Our cash runway calculator and how to calculate cash runway explain how.

Inventory management tools

As your range grows, tracking stock in spreadsheets becomes error-prone. Most store platforms include basic inventory tracking; dedicated inventory apps add purchase orders, multiple warehouses and forecasting. If you also sell in person, a POS that syncs with your store keeps stock accurate across channels; see POS system cost. Budget for these tools once you have enough products to need them.

Taxes on your costs

Many platform, app and advertising fees carry VAT, GST or digital services tax depending on your country. If you are registered, you may reclaim some of it; if not, it is a cost. Include tax when comparing prices, and keep invoices for every subscription for your accounts. Our accounting software ranking helps you find tools that track these automatically.

Scaling costs as you grow

As sales grow, some costs scale: payment fees, shipping, packaging and inventory. Others step up: higher platform plans, more apps, staff and warehouse space. Plan for these steps, and recheck margins as you grow; a business that is profitable at 100 orders a month can lose money at 500 if costs step up faster than sales.

Testing demand before investing

Before buying large stock or paying for custom design, test demand cheaply: share products on social media and gauge interest, take pre-orders, run a small ad to a simple product page, or sell at a market. If people buy, invest more; if not, adjust products or prices before spending heavily. Many successful stores started with a small range and grew from proven sellers.

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