The Real Cost of Shopping Carts

Many shopping carts are free, or are they? More accurately, they're free to download. There are other costs to setting up and running a shopping cart. Some of these costs require cash, some require time, but they all cost something. Let's do a quick analysis of the typical cash cost of a 'free' shopping cart and let's assume you're not an internet / e-commerce guru.

These are the costs you probably expected:
  Low High Comments
Shopping Cart Engine $0 $0 This is what you download
Shopping Cart Design Template $0 $0 Some engines comes with templates into which you plug product and other content
Domain Name Fees $10/year $200/year  
Hosting Fees $60/year $200/year  
SSL Certificate $100/year $200/year  
Credit Card Processing $150/year $150/year+ Upper end depends entirely on your sales volume. Internet transactions are more expensive than in-store transaction fees.

These are the costs you didn't expect:
  Low High Comments
Web Design Work $100 $10,000+ Low end assumes that you have a template that you like but that you have to pay someone to create a very simple header graphic. Low end also assumes that you can live with the menu system, links, and graphics that come with the engine. Upper end assumes you have a nice budget and a complex site.
Shopping Cart Setup $0 $1,000 Depending on the complexity and flexibility of the shopping cart, you may feel compelled to have an expert walk you through the configuration file.
Custom Programming Services $0 $5,000+ On the upper end, this cost may be incurred after you have used the site and found issues that must be fixed (either for internal or competitive reasons).
Internationalization $0 $10,000+ Certainly not required for most sites, but if you decide to try to sell your product(s) overseas, you may incur this cost. Some shopping carts have already been internationalized, but you may still incur a cost if you need to have your own content translated (i.e.: for products and services specific to your site).
SEM, SEO, Web Analytics $0 $1,000+ Upper end depends entirely on whether you want to advertise your site, whether you want to develop a plan for obtaining high organic search engine results, and whether you plan to hire a consultant to help you with the process. Again, you can spend anything your budget allows.
Product Set Up and Maintenance $0 $10,000 plus setup This depends entirely on how many products you plan to sell over your web site, whether you have access to images for those products, and whether you have access to descriptive text for those products. It also depends on whether product information can be loaded automatically into your database, or whether you have to enter data into the database manually. Finally, this depends on whether you will do the work yourself or have someone do it for you.
Support Services $0 $1,000/year + Some shopping carts don't offer support. For those that do, different types of support are available (email versus phone versus on-site). Depending on the level of support offered, this service may get quite expensive.
Other Services $0 $1,000 + E-Commerce vendors offer a variety of services that they may or may not charge for. This may include integration with third party software products, RSS services, Blog services, etc.
Other Third Party Services $0 $1,000/year + There are all kinds of things you do to your shopping cart to make it more appealing to your audience. HackerSafe will sell you a seal that you can put on your shopping cart if you pass their daily security tests; Kampyle has an add-on that allows web site visitors to rate and make comments about your site; RatePoint has a service for sending out mass emails. The list goes on. Each of these services is meant to inspire confidence, enhance communications, and increase sales.
Internal Operating Costs $0 $1,000/year + Even a mildly successful shopping cart will probably cause you to change / refine your internal operations. If you haven't used a shopping cart before you'll find out that you're now in the packaging and shipping business. You'll also start getting returns in the mail, and there will be demands that you do a better job publicizing your return and refund policies. You'll also need to create and publish a privacy policy. There will be other operational changes.
Total Costs First Year is $420, then $320 / year thereafter Upwards of $40,000 and beyond for first year. About 30% of first year cost thereafter  
A couple of thoughts:

  1. Every site and every company is different. This exercise is only meant to introduce you to the kinds of costs you may incur when implementing a shopping cart.
  2. Remember that this exercise was done for a 'free' shopping cart. Even expensive shopping carts rarely cost more than $2,000 (at least for those sold over the internet). A safe conclusion to draw is that the cost of the shopping cart engine is a small fraction of the cost of implementing and maintaining the shopping cart.
  3. This analysis assumes the implementation of one site. If your shopping cart engine doesn't support multiple sites, you'll incur most of these costs for every additional site. If your shopping cart does support multiple sites, the cost of adding additional sites is marginal (NextLevelShopper is a multi-site shopping cart system).
  4. The breadth of internet services available to web site owners is overwhelming. Having a partner to separate the wheat from the chafe can save a lot of time and money.
  5. Well implemented shopping carts can decrease infrastructure and operational costs. If a shopping cart is successful it may minimize the need for adding physical stores and warehouses. Furthermore, a successful shopping cart may decrease unit labor and other variable costs.