How much does the Online store cost and how to calculate the profitability?
What is the Online store
Online store - the website which helps to buy and sell goods online.
Depending on a business model Online stores differ with ways of sales, income and expenses. And each of them counts on profit and conversion.
Competently developed Online store includes:
1.Creation of design of the website
2.Internet marketing: placement and the analysis of results of advertizing on the Internet
3.The sales process automation
This project demands interrelation of the following competences: creation, marketing, analytics and automation of process of sales.
Therefore during creation of Online store the programmer, the web designer and the marketing specialist participate.
Options of creation of Online store
For creation of an Online store use the following options:
Option 1. To employ the freelancer
Option 2. To order the IT company
Each of options differs at the cost, quality and dates of performance.
Let's consider in more detail each of options.
Option 1. To employ the freelancer
Some owners of business save and employ the freelancer to develop Online store.
If you employ the freelancer to develop Online store, then be ready to the unexpected turns.
It is necessary to check the freelancers constantly. Because:
Freelancers will think up the mass of excuses why haven't performed a task in time, or will take an advance payment and won't contact, or deceive.
At you it won't turn out to control each stage and to watch how the task is performed. It is sometimes important to interfere in time.
Therefore, once again think whether excessive economy is necessary to you and to employ the freelancer. Finally it affects quality of work.
Option 2. To order in the IT company
It is reliable option if you want to order competently developed online store.
In the IT company professional designers, programmers and marketing specialists work with practical experience of work:
Work with the legal entity on the Contract.
Are assigned to the project the project managers which watch and control each stage of work.
The project is carried out accurately to the put terms
How much for to develop Online store
The cost of development of Online store depends on simplicity or complexity of the chosen functionality and terms.
The exact cost of Online store is calculated only after filling and consideration of the specification.
The Specification (S) - an obligatory component of the organization of works on professional creation of online store.
We count profitability of Ecommerce project
The profit level of Online store depends on the sold products and the sphere of business to which your project belongs.
Having calculated profitability of the resource, the cycle of payback of your project and optimization of expenses will be clear to you.
Formula of profitability of your Ecommerce of the project
The profitability of Online store pays off the following approach*:
Profit = V * C * CH – T – CO – ORG – ADS
In this formula there are following indicators:
V - Attendance statistics.
For calculation of level of attendance the average value of indicators of statistics LiveInternet in a month is used.
This factor helps you to make the forecast of future profit according to increase in level of traffic on your resource.
C - Conversion.
This indicator reflects a ratio of specific actions of the visitors of your website made by total number.
Those actions are:
- Addition of goods in "Basket" on your resource;
- End of a cycle of purchase by registration.
CH - Average bill.
If made the cost of purchases of goods from 300 at. е to 400 at. е, the average bill will be 350 c.u.
The average bill of Online store will be higher, the profit of Online store is higher and better.
T - Taxes.
The Taxes point is considered surely.
At the beginning your online store can function also without registration of legal entity.
As soon as turnover of trading floor grows, it is necessary to be legalized and pay taxes.
CO - Costs for purchase of production at the supplier or suppliers.
The better these expenses are counted, the business is more profitable.
ORG - Organizational expenses.
Organizational expenses call: expenses on transportation, on the salary, on delivery and other.
ADS - Expenditure for Marketing.
For the increase in quantity of the sold goods, have also arrived in general, you need to use rich online marketing functionality.
It is necessary to approach online advance responsibly. It is necessary to allocate a certain sum for the advertising budget and it is obligatory to watch efficiency of the held marketing events.
I hope this formula wasn’t difficult for you during the calculation of your ecommerce project, and our article was useful for you.