E-Commerce Businesses Need to Prepare for These Crucial Expenses in 2019

January 29, 2019 Posted by admin In ecommerce No Comments

When you are starting an e-commerce venture, besides having a computer, internet, a powerful connection, what else do you require? There are certain things that are way more crucial and of course essential for the survival of your online e-commerce store in the long run.

E-commerce business expenditures are often hidden, unseen and undercover which mostly stores owners neglect. But these expenses are not to be neglected if you wish your store to run for a long period of time with profit maximization and success. There is a thin line between success and failure to every business and definitely e-commerce business is no exception to it at all. Here are some crucial expenses that all the e-commerce business owners must look into before it gets too late for them to stay in the competition.

Website Hosting and its Building

An e-commerce website is not a mere WordPress blog, it requires some more things that are necessary and essential for its survival. The most crucial things include having a paid domain name, a perfect e-commerce platform such as Magento or BigCommerce or Shopify etc., genuine payment handling and processing mechanism, SSL certification and premium hosting solution.

Just remember that every wonderful thing needs investment and will never be cheap. Those things that are inexpensive, might not be what you are looking for.

Platform Payments

For running a successful e-commerce business, you need a third-party e-commerce platform for your payment system integration. You have to pay some dollars to be listed as a secure website with a proper payment system. This, in reality, enhances the confidence of your visitors on your website and therefore is extremely essential.

Each platform of e-commerce asks you either to pay a flat monthly subscription fee or share in the percentage of sales every month. There are additional fees too such as referral fee or value fee, in short, you need to spend tens to hundreds of dollar monthly for the seamless integration of the payment system.

Permitting and Licensing

The real fact is, just because you are selling online, doesn’t mean you will get an exemption from the required permits and licenses that all the bricks and mortar businesses need. Even if your module is online, you will need those certifications and authorizations to sell your stuff online with security for your business as well as your customers. Your online business will require a general business permit from the country you are operating.

You will also need to pay a Doing Business As (DBA) license, professional trading license and health inspection license if you offer food-related products.

Marketing and Advertising

Your marketing efforts are bound on how much you are interested in investing for it. It is believed that out of your total revenue, around 7 to 12% of the money is used for your marketing and advertising efforts. If you have started your e-commerce business from scratch, you need more marketing efforts. For running advertisements, optimizing, social media marketing, paid campaigns and so on, these all marketing tactics do need a handsome amount of money.


Prepare yourself for shipping bills because shipping costs and the future capabilities are always unpredicted. All the large businesses, who are having bulk shipment orders have the capability to cut down some shipping cost with dealings and dialogues. But you are new in the market, therefore you need to wait for a long time to reach that point where your orders could be in bulk and you have a developed PR to cut down the cost. Till then, be ready for large shipping bills.

Returns and Refunds

One of the biggest perks of online shopping is the returns and refunds policy. If you are to compete against the giants such as Amazon and Targets of the World then you need to have a strong return and refund policy. Even if your venture is small, there are more than 58% online stores who are offering a refund and return to their customers, therefore you too have to have this. Having a good rewarding and logical returns and refunds will help in boosting trust in your customers and they will always be sure that the company has their back, minimizing the tension of mistrust.

It is calculated that in the e-commerce business, the return and refund rate is about 20%, which is higher than the normal bricks and mortar businesses.

Equipment and Asset Maintenance

There will come a time when you need to maintain your equipment and assets. You would be having assets to maintain your business which will depreciate with the time, therefore you need to cover the expenses in its wear and tear also. Over time you have to pay for maintenance, disposal of broken things and replacement with fresh assets, this is an expense you have to calculate properly.

Inventory Management

It is part of the business that your inventory will shrink. It happens when you lose your products in terms of damages, inventory theft, misplacement and all the other related issues. Therefore it becomes important to manage your inventory properly, therefore you need to invest in an inventory management software to track down when your product was picked, how long it remained in the warehouse and when it reached to final destination. Managing with software is an expense you need to be prepared of.


This is one of the most crucial expense when you need to store your inventory, managing a warehouse. A warehouse cannot be attained will less investment, you need a big enough warehouse where all your inventory can stay, some security staff and close monitoring security system to keep an eye over any theft of the products. You need to expand in this too if you want your inventory to be safe.

Cyber Security

In recent years, more than 60% of small businesses have experienced a cyber-attack, thus resulting in compromise over customers’ personal information. This leads to bad image over your customers and they tend to leave you as their priority choice.

To protect your e-commerce store from malicious malware infections, viruses and hackers, you need to invest in cyber security platforms such as building a firewall, end-to-end encryption of data and secure processing terms.


Being a small business initially, of course, will need to file and pay your federal state taxes as well as the income taxes on whatsoever you are earning. You also need to file the sales tax to ensure smooth transactions of your business. Paying off your taxes is also an expense, you cannot overlook at all.


You might think you are not operating in a physical environment, therefore, you don’t need insurance, but no you are wrong. You need general liability insurance as well as business interruption insurance in case of any mishap and calamity, messing with your supply chain. There is a need for product liability insurance too to protect your products as well.

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