IT Costs of Running an E-Commerce store

Running an E-commerce store is a strange thing.  We spend a significant portion of our budget on IT costs each year, updating and adjusting the store to make it more user friendly and bug fixing.   To give yo an idea, it’s about the same amount that we spend on marketing.  In many ways, I look at the IT budget as a mixture of a maintenance / fixtures upgrade budget and rent.  You see, at a guess, we probably spend about 50% of our budget on adding new features and the other 50% on fixing bugs.  It’s a strange process in that each new feature that you add generally means bugs in the future.   It’s also part and parcel of running an online store – when software updates – on your server, on your site, on browsers – you need to update your site design to ensure your site still works for them.  The more complex / sophisticated your site is, the more chances there are of something breaking.

Self-Hosting vs SaaS

Part of the reasoon for the need to update our site and it costing more is that we self-host our site.  We have our own servers, our own domain name and our installation is not linked to any other major network.  There are a lot of Software-as-a-Service systems out there like Shopify or Magento Go, but for us, keeping a self-hosted server allows a level of flexibility that we desire.  With a SaaS system, we’d be reliant on the features that have already been released and any new features we wanted would have to wait.  And god help you if you run into an unusual problem – I’ve seen and heard of horror stories where companies, with an unusual error are unable to get it fixed on a SaaS solution.

Hosted solutions give you more flexibility – but generally cost significantly more to keep up an running.   If a major browser update changes how your site shows up  / functions with the browser, you have to pay for the development / fix yourself.  there’s no spreading it around multiple sites. Well, okay, it’s possible that a general patch is released on the platform you are on – but updating to the patch generally brings its own headaches as you then have to update all your modules / fixes / add-on’s to the new update.  That can sometimes be more expensive than just having a patch set-up just for your site.

Different Models

As mentioned, we update our site on an on-going basis.  On the other hand, I know of other e-commerce businesses who spend very little on this.  They get a basic (or more complex site) up, pay a large lump sum payment and put off any other updates till it’s time to revise the site again.  It’s no a bad model, just like using the SaaS model isn’t ‘bad’; just different.  The advantage is that costs are significantly lower and cashflow is less effected on an on-going basis.  However, this often means that when you do have to update the site, you are miles behind and often have to scrap / redo the entire site to bring yourself up to code.

It can also mean that you miss out on customers – customers who want / need a specific feature on your site that you don’t provide might decide it’s not worth working your site and move on.

Overall, if you do run an e-commerce site, expect to budget for website development – whether it’s a one-off payment or an on-going one like us.