Building an E-Commerce Site for Under $1,000

Small-business entrepreneurs looking to make a splash on the Web need not drown in massive site construction costs. According to experts, there are many ways to keep the tab low. And if site builders are willing to start out with a no-frills approach, they can keep costs below US$1,000.

"If you're looking to build a site for under $1,000, you're not going to get the most whiz-bang technology," Giga Information Group analyst Steve Telleen told the E-Commerce Times. "You're basically just looking to get your product out there."

Do-It-Yourself Route

"Your best bet is to pick those sites and products that provide some basic templates for different types of businesses," Telleen said.

Site templates are included with the publishing software of several manufacturers. Microsoft (Nasdaq: MSFT) Publisher, for example, costs about US$129, and competing programs are similarly priced.

Experts say these Web publishing programs offer tools that let businesses create professional-looking sites from the start. They can be adapted to almost any type of business and also can be set up to include pictorial catalogs and basic e-mail functions.

Katie Jordan, a senior product manager at Microsoft, told the E-Commerce Times that about 40 percent of Publisher users are businesses employing between one and four people. Companies that employ between five and 250 employees constitute another 33 percent of the application's users.

Heavy Lifting

Technology has reached a point at which it is fairly easy for Web neophytes to create a functional, visually appealing site. And for small businesses looking for more complex e-commerce features, plenty of service providers are standing by, ready to do the heavy lifting for a price.

Out of the many online services designed to serve small businesses, Telleen pointed to those run by two Internet heavyweights: Yahoo! Small Business and Microsoft's bCentral.

For a monthly fee, these sites offer various service packages, including mailing, order tracking, billing, transaction tools and marketing assistance.

A Yahoo! spokesperson said the portal site currently has about 2,000 customers using its small-business services.

Mix-and-Match Services

Prices for business hosting at Yahoo! range from $9.95 per month for a service with five e-mail accounts, a Geocities Web site and access to site monitoring services to $49.95 per month for full e-commerce hosting.

Yahoo! also charges a fee of 10 cents per item listed, a 0.5 percent transaction fee and a 3.5 percent revenue share for items sold through the Yahoo! network.

Depending on services desired, small-business users of bCentral will pay about $200 per year for commerce functions and another $200 annually for general Web hosting services. Microsoft charges a onetime setup fee of $35.

Marcus Schmidt, a Microsoft product manager for bCentral, told the E-Commerce Times that the $200 annual cost covers a wide range of commerce services, including shopping cart functions, product management and an interactive catalog. The bCentral site also has arrangements in place to offer discount prices on the services of card processing and billing service providers, such as Card Service International and PayPal.

One-Stop Approach

"Overall, it has been set up to be a one-stop location for the merchant to offer the various services," Schmidt said of bCentral.

He added that Microsoft also has arrangements with auction sites like EBay (Nasdaq: EBAY) and Ubid in which bCentral users can get exposure to those sites' marketing and transaction services.

Experts noted, however, that building a Web site is only the start of the small-business adventure, so entrepreneurs must keep future operating costs in mind.

Web startups also need to consider issues like hosting fees, domain name licensing and directory services, they said, not to mention costs for services like shipping and advertising in other media.

Just a Start

"Setting up the site isn't the end of the story," GartnerG2 analyst David Schehr told the E-Commerce Times.

The upside, especially for businesses with a brick-and-mortar presence, is that promotion and advertising for a Web site can be kept relatively cheap.

Schehr noted that a company's Web address can be posted on shopping bags, in print ads and other venues for which the business already is paying.