How much does it cost to startup a basic eCommerce company?

Since I got a lot of comments on the How to start and grow your eCommerce side “biijness”, I thought I’d take some time to outline the costs of starting a small eCommerce business in India.

Say you are a stay-at-home-dad who wants to sell your own neat apparel designs online, or a creative mom who can make some excellent handicrafts at home. Now you are interested in setting up a storefront on the web so you can “get in on this eCommerce thing” or “make money on the side” or “make some extra revenue when you sleep”. Here’s what you need to get going.

Item Who you need to set this up? How much will it cost?
Company Incorporation

(MOA, AOA, PAN Card, Company legal entity, Bank Account)

CA, Accountant or Company Secretary Rs. 50,000 (Bangalore)
Payment Gateway (To accept credit card, net banking or debit card online) EBS, CC Avenue, your bank (Axis, HDFC, etc.) Rs. 25,000 (initiation fee)

2 – 4% transaction fee (negotiable)

Rs. 500 – Rs. 1500 monthly fee (can get this waived)

eCommerce Software Shopping cart software companies (Shopify, Big Commerce, MartJack, IQecommerce) + Do the catalog setup yourself Rs.1000 to Rs. 10,000 per month starting
eCommerce team (Optional if you use off-the-shelf hosted software) Build your own team of 2 people to custom build eCommerce storefront Rs. 1.5 to Rs. 2.5 Lakhs per month
Computer, machines, servers for developers (if you are building a team) Go Daddy, Big Rock, your local PC reseller Rs. 50,000 + Rs 10,000 per month for hosting (basic plan)
Office Space (if you have a team that wants to work in an office) Get a small, cheap shared space instead of a big swanking office Rs. 5000 per month
Shipping Blue Dart, Aramex or Fed Ex (AFL) Rs. 20,000 (setup account, negotiable to zero) + Rs. 25 to Rs. 45 per shipment (up to 500 grams in weight)
Initial Marketing Do it yourself (poster, flyers, send email to friends) Typically zero, but budget Rs. 20,000
Computer (Desktop or Laptop) + Internet + Phone Assuming you don’t have one already Rs. 30,000 + Rs. 2000 per month (for a good internet connection)
     
Total starting costs   Minimum: Rs. 1 Lakh plus Rs. 25,000 per month (using hosted shopping cart software)

 

Maximum: Rs. 4-5 Lakhs plus Rs. 2 Lakhs per month (building a team and hosting yourself)

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3 thoughts on “How much does it cost to startup a basic eCommerce company?”

  1. Way to much Exaggeration … !!
    -there are many Payment Gateway free of charge.
    -Hosting account for Rs. 4600/year for unlimited hosting
    -eCommerce software are free to install and maintain ( if you are technically sound) if not than hire someone and he will charge not more than Rs 20K for CMS like Magento, Opencart

    I have created http://www.indiameals.in free of cost (except hosting)

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