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Comparison of Ecommerce Online Stores

October 8, 2006 By barrie@compassdesigns.net Leave a Comment

You need two basic things to start selling online:

  • A storefront (shopping cart enabled web site)
    This is a place on the web for people to go to see what you have to
    sell. It can be your own website, a 3rd party site (like yahoo, or an
    eBay store) or even just a temporary page on an auction site like
    eBay’s.
  • A way to accept payment
    Most
    buyers want to use a credit card to buy online. To accept credit card
    payments you need a merchant account. A merchant account is not a
    business checking account. It is a special facility that allows you to
    process card transactions.. In many cases you will have to pay higher
    rates than offline businesses such as shops or restaurants who obtain a
    signature from their customers. Another alternative that I explore in
    the table below is Paypal. Think of it as quasi-cash that can only be
    used online.

The combinations to
achieve these two are virtually infinite. Some providers have low
initial set up fees but high monly costs, or high transaction percent
costs, others are the reverse. Here is a look at several different ways
to meet these two requirements.

Click on the store logos to read more about their services. 

ebay.gif
paypal_mrb_banner.gif
prostoreslogo.gif
Setup
0
0
Currently waived
Monthly
$15.95
$20
$29.95
Per Sale %
8% of initial $25 ($2), 5% of remaining
2.9%
0.5%
Per Sale
$0.02
$0.30
0
Merchant Account
*Effectively Paypal
Included
Included
Setup
0
Included
Included
Monthly
$20
Included
Included
Per Sale %
2.9%
Included
Included
Per Sale
$0.30
Included
Included
Storefront
Included
None
Included
Domain
Included
$20/yr
Included
Hosting
Included
$90/yr
Included
Web Design
$90
$150
$150
Comments
Proprietary eBay website
Paypal heavy on branding
eBay company
Total First Year Costs
$212.55
$256.60
$266.55
    Recommended  

.

yahoo.gif
2co-logo.jpg
sbilogo156.gif
Setup
$50.00
$49
0
Monthly
$39.95
0
$25
Per Sale %
1.5%
5.5%
Per Sale
0
$0.45
 
Merchant Account
Paymentech
Included
SellIt!
Setup
0
Included
$99
Monthly
$22.95
Included
$4
Per Sale %
2.69%
Included
Per Sale
$0.20
Included
 
Storefront
Included
None
Included
Domain
Included
$20/yr
Included
Hosting
Included
$90/yr
Included
Web Design
$150
$150
$150
Comments
Many Extras
Checks only once per month
Many Extras
Total First Year Costs
$349.5
$285.60
$447
      Recommended

This
is just a start. As you can see the fixed and percent costs vary
considerably. To make a more informed decision on which route to take,
you need to have some idea of volume of sales and item prices. Then you
can do an analysis by $ sales. This starts showing up the high percent
cuts in vendors like 2checkout.com (who have the lowest startup fee).

We recommend Paypal for the fact that it has the lowest costs of a
“real” store front (as opposed to an eBay store) and BuildIt for its
sophisticated collection of web marketing and search engine
optimization tools.

Analysis Process

To come to these conclusions, we actually didn’t just grab what we thought might be the best paying affiliate links, but did a real detailed analysis.

The first step was to create a spreadsheet and pick some arbitary values for sales and volume.

 

This allwed me to zero in on the real costs of running an online store and plot some comparison graphs. Its much easier to see trends in this way.

 

 

You can grab the files I used in the ecommerce section of the file library.

Comparison of cost to set up online stores

A detailed analysis of first year costs for online stores

I strongly recommend you use these files with your own projected values to find the best solution for you.

Filed Under: Uncategorized

The Skinny

I am an entrepreneur, web consultant, author and educator.

I have been involved in starting a K-12 School District, a Private High School, and three web tech companies. I also wrote one of the original and best selling books on Joomla.

And I like sailing with kids.

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