Online Business Startup Costs

Do you wish to start an online business but are worried about the costs? There is no denying that starting an online business these days requires less startup capital due to lower overhead costs and a barrier to entry. However, that doesn’t mean that setting up an online business is free. There are quite a few costs involved and the overall value of your time. In this article, we list the minimum and necessary costs that your online business accounts for.

Online Business Startup Costs

#1. Permits and license

You need a permit to start an online business. This permit and license to operate depends on the kind of business you wish to start. For instance, you could be asked to register for sales tax, or you may need a license that is specific to your niche or area of operation. The costs of these permits vary from one state to another. Such permits and licenses usually range between a cost of $100 to $1000.

#2. Domain names and hosting

Your domain name is the address to your website. This is why it is crucial that you invest in your domain name. This can cost around $20 to $60, depending on your domain name provider.

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Your hosting costs depend on the package and the features that you opt for from your hosting provider. It can cost anywhere between $50 to $200 on a monthly basis. Your provider usually takes care of the cost of security and maintains the server so that your website can run seamlessly.  In addition to this, an SSL certificate approximately costs around $70 to $150.

#3. Payment gateways and shipping providers

Usually, your payment providers will take a percentage or a fixed fee as a part of your transaction costs. This is especially when you have payment gateways like PayPal, Square, Secure Pay, etc. In addition to this, if you are shipping your products across borders, you need to also keep in mind the currency, shipping costs, and the providers in the area of destination.

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#4. Trust marks

One of the most challenging aspects of an online business is to convince a visitor that your business is a legitimate operation. There are many third-party companies that help you do this by providing a clickable pop-up to confirm your identity as a verified business. This is highly imperative as it shows that you care about your customer’s privacy and security.

#5. Professional photography

If your product suppliers are unable to provide you with high-quality product photos, or if you do not wish to use them, then you need to bring a professional photographer on board. You will need to invest in the best resources that you can find. These photos need to highlight your products and encourage the visitor to make a purchase.

#6. Standard business requirements

You need to keep in mind that you budget for payments to taxes. Once your website is up and running, you need to set a budget aside to make these obligatory payments. Some of the other costs also include:

  • Business travel
  • Stationery
  • Internet and phone costs
  • Computing software like office 365, photo editing softwares, etc.
  • Email hosting services like G Suite, Zoho mail, etc. 


You must remember that not all costs are monetary. Starting an online business take time. Once you have a good idea of your overall costs, you can estimate the products you wish to sell online and define the pricing. You need to then invest time to understand the behavior of your customers once they come to your store and how you should sell products to cover your costs.

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Have you realized your approximate costs? Are you ready to take your online business to the next level? Let us know in the comments below!

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