Key takeaways:
- Starting an online business isn’t free, but costs vary. While some businesses start only with just a domain name and website hosting, others may need inventory, marketing, and software. Costs can range from $1,000 to over $60,000 in 2025.
- Some costs are one-time, while others are ongoing. Expect setup fees for registration and website design, plus recurring expenses like hosting, marketing, and transaction fees. Planning ahead helps keep costs manageable.
- Smart budgeting can lower expenses. Using free tools, DIY solutions, and affordable platforms like Web.com can help you start and run your business without overspending.
Let’s Go: Start your online store today
There’s a common belief that starting an eCommerce store just means building a website and selling items. Sure, it’s cheaper than opening a brick-and-mortar business, but there are still costs to consider. Yes, you’ll need a domain name and website hosting, but that’s not entirely it. Perhaps, you’ll want to invest in accounting software and marketing for your business to bloom, and suddenly, your expenses add up.
In 2025, online business startup costs can range from $1,000 to over $60,000, depending on your business model and tools. That may sound like a lot, but you don’t have to spend a fortune if you know how to play your game right.
That’s why we’re here to help you navigate the typical costs and go over ways to keep your expenses low while building a successful business online.
Types of expenses to consider for an online business
Understanding how much it costs to start an online business can help you plan better. Some expenses come up only once, while others continue over time. Some are necessary to keep things running, while others can improve operations.
The table below explains these cost types to help you budget wisely.
| Cost type | Description | Examples |
| One-time costs | Initial expenses to set up your business | – Business registration – Branding Website setup – eCommerce platform setup – Initial inventory |
| Recurring costs | Ongoing expenses needed to keep the business running | – Hosting Marketing – Payment processing fees – Website maintenance – Transaction fees |
| Essential costs | Must-have costs to operate legally and sell products or services | – Business registration – Domain Website hosting – eCommerce platform – Inventory |
| Optional costs | Additional expenses that help improve operations but aren’t required | – Paid ads – Influencer marketing – Professional web design |
| Fixed costs | Set costs that stay the same each month or year | – Subscription plans for web hosting – Software tools – eCommerce platform fees |
| Variable costs | Costs that change based on business activity | – Inventory restocking – Shipping Paid ads |
Estimated startup costs for an online business
The cost to start an online business depends on factors like business structure, business model, and marketing strategy. Some small businesses require minimal investment, while others need more upfront funding.
Let’s look at estimated startup costs based on business size and needs:
- Small businesses can start for under $1,000 with just a domain, website development, and basic marketing.
- Online stores typically range from $2,000 to $10,000+, depending on inventory, eCommerce platform setup, and marketing and advertising costs.
- Larger businesses needing custom websites, paid advertising, and storage solutions can exceed $50,000.
Beyond these expected costs, operating costs can accumulate over time. Refunds and chargebacks may reduce profits, while business insurance helps protect against unexpected risks. Some businesses also face compliance or legal fees, such as costs for privacy policies or industry-specific regulations.
Breakdown of common expenses when launching an online business
Let’s take a closer look at some of the key expenses you’ll need to plan for.
Business registration fees
To open your own eCommerce store, you might need business licenses or permits, depending on your location and industry. The upfront costs for these legal fees usually start at $50 and can go up to a few hundred dollars.
Some industries, like agriculture and mining, also need federal permits. Many licenses must be renewed regularly, so it’s good to check the rules in your area.
Domain registration costs
A website is very important for your eCommerce business. But before you can set it up, you’ll need a website name, also called a domain name. This is the web address people type to find you online, like yourbusinessname.com. It helps your target audience know where to go.
On Web.com, a .com domain starts at $12.99 per year unless it’s a premium domain. If you want added privacy and protection, it costs $1.95 per month.
Since startup expenses can add up, it’s good to plan for these costs early. Some small businesses also buy extra domains to stop others from using similar names.
Website setup costs
For your website to go live, you need a web hosting service so customers can easily access your product or service-based business. It should also work well on phones, tablets, and desktops because otherwise, visitors may have trouble navigating. Subtle as it seems, this is part of your marketing strategy, where you not only help customers browse smoothly but also improve your chances of appearing in search results.
Once you have web hosting, the next step is website development. Some business owners use web design agencies, while others prefer a more hands-on approach.
Web.com can help you embark on your new venture with the Basic hosting plan, which initially costs $2.75 per month and later renews at $9.99 per month. If you want a more professional look, Web.com offers custom website design services.
You can also get your online store done with the platform’s AI-powered store builder, which provides you tools for secure checkout, shipping rates, tax settings, and marketing features.
eCommerce platform setup costs
eCommerce platforms help set up an online store easily as well as manage inventory and process payments. Some providers have a one-time setup fee, while others require a monthly subscription, typically between $30 and $299, depending on features.
Basic plans cover essentials like product listings and payments, while advanced options include marketing tools, analytics, and inventory management. Some eCommerce solutions also provide AI-powered tools and secure payment processing that help business owners save money through a streamlined setup and management.
Initial inventory costs
If you’re selling physical products, initial inventory is one of the first costs to consider. The budget for this can range from $500 to $5,000, depending on the type and quantity of products you plan to sell. Initial costs also include storage, packaging, and shipping.
Some business owners keep products at home, while others use warehouses or third-party logistics (3PL) services, which may charge $1 to $3 per item. To save money, some sellers choose dropshipping, which eliminates the need for upfront stock and storage costs.
Website maintenance costs
Keeping a website running smoothly requires ongoing maintenance. This includes updating software, improving security, optimizing performance, and adding fresh content. Regular backups also help prevent data loss in case of technical issues.
Some free tools can help with basic maintenance, but professional services offer security updates, performance monitoring, and backups for a smoother experience. Maintenance is also part of website hosting, and web hosting costs may vary depending on the level of support and security features included.
Marketing and ads costs
Getting the word out about your business is important in attracting customers. Some strategies are free, while others require paid advertising. Here are some typical expenses that can affect your marketing budget.
- SEO (Search Engine Optimization). Adding keywords to your website helps it surface on Google when people look for related information. Free tools like Google Search Console can help, but hiring an SEO expert can cost between $500 and $5,000 or more per month.
- Content creation. Good content makes your website and social media more engaging. Online design platforms like Canva help create simple graphics, while hiring freelance writers or designers can cost $50+ per post or $100+ per video.
- Paid advertising (PPC Ads). Google and social media ads use a pay-per-click (PPC) model, where costs range from $0.50 to $10 per click, depending on competition.
- Social media advertising. Platforms like Instagram and TikTok help reach new audiences through influencer marketing. Should you want your ads to run on these platforms, expect about $100+ per post for micro-influencers or up to $1,000+ for larger influencers.
Transaction fees
When running an online business, every sale comes with a transaction fee as part of payment processing. These fees vary by provider. Credit card payments typically cost 1.5% to 3.5% per transaction, while debit card fees average around 0.73%. Payment processors like Stripe, PayPal, and Square also charge small, fixed fees per sale, usually $0.10 to $0.30.
If you have your own eCommerce business, keep in mind that some eCommerce platforms have their own transaction fees, ranging from 1% to 2.5%. While these costs may seem small, they add up over time, so it’s important to factor them into your pricing.
Inventory restocking costs
For most online businesses, keeping products in stock is an important part of managing online sales. The thing is, restocking also comes with additional business expenses like:
- Ordering costs. These are costs incurred on shipping, logistics handling, and labor to process new stock.
- Storage costs. Whether or not your online business involves large inventories, you might need to rent a space, or even a warehouse, for these inventories.
- Insurance and taxes. Your products need protection, especially during transit. These costs, along with legal requirements, are important to factor into your budget.
- Product waste. These are operational costs, specifically for items that go unsold or expire, which inevitably lead to losses.
To reduce costs, many online businesses order in bulk to lower shipping costs or use inventory management tools to avoid overstocking. Tracking demand helps you restock wisely and cut unnecessary expenses.
Hidden costs when running an online business
The cost of running an online business isn’t limited to the upfront expenses. Some fees are easy to see, like rent or product prices. But others sneak up on you. Here are some hidden expenses that can catch you off guard:
- Transaction fees. Credit card companies deduct a small percentage from every sale, and those fees add up fast.
- Restocking fees. Some suppliers charge a fee when you return unsold or damaged items.
- Refund costs. If a customer wants a refund, you might lose money on processing and shipping costs.
- Business permits and licenses. Renewing permits and paying industry dues can take a chunk out of your budget.
- Office space and utilities. Aside from rent, you also have to cover electricity, internet, and maintenance.
- Equipment upkeep. Buying tools and technology is one thing, but repairs and upgrades can cost even more.
- Employee costs. Wages, benefits, and training make payroll more expensive than it seems.
- Insurance. Business insurance protects you, but it’s another bill to pay every month.
- Shrinkage. Lost or stolen inventory can hurt your bottom line, especially if you’re not tracking it.
- Shipping and delivery. The cost of getting products to customers can change based on location, speed, and weight.
These costs might not be obvious at first, but they can take a big bite out of your profits. Factor these in when planning your expenses.
Budgeting tips to avoid overspending
Creating a solid budget keeps your startup’s finances on track and helps avoid overspending. Here are some straightforward tips to help you manage your expenses:
Pick a budgeting method
There are three ways to plan your budget:
- Zero-based budgeting involves starting from scratch and deciding if each expense is necessary.
- Historical budgeting looks at past spending and adjusts for any changes.
- Goal-oriented budgeting focuses on specific business goals, like bringing a product to market or building your customer base.
Whichever method you choose, the goal is to manage your initial investment and avoid unnecessary costs.
Save money by DIY-ing
You can lower business startup costs by handling some tasks yourself. Try using a website builder with AI-powered tools to create your site. For marketing, take advantage of free marketing tools like Canva to design graphics and edit videos without extra costs.
When working on a new product, platforms like Sketch or Figma can help reduce product development costs by allowing you to create prototypes yourself. Doing these tasks on your own can help you reduce costs while growing your business.
Use free marketing strategies
Business promotion doesn’t have to eat up your budget. Free tools can help with different marketing tasks. For example, Buffer is a social media management platform that allows you to plan, schedule, and oversee posts without spending a dollar.
Google My Business improves local SEO by helping your business appear more prominently on Google Search and Maps. For email marketing, Mailchimp is a great option, and you can enhance your visuals with free stock photos from platforms like Unsplash.
Review and track expenses regularly
Regularly checking your expenses helps you catch overspending before it affects your cash flow. QuickBooks Online, Expensify, and FreshBooks help track spending, organize receipts, and categorize expenses so you can manage inventory costs and see where you’re spending money with less effort.
It’s also a good idea to use financial calculators to stay on track with your budget and compare costs with industry benchmarks to uncover savings. Doing this on a monthly basis will give you a clear picture of your finances and help you make better decisions.
Final thoughts and next steps
So, how much does it cost to start an online business? It all comes down to your goals, budget, and the tools you choose. It may take some trial and error, but with smart budgeting, you can launch without overspending. The right tools can take a lot of work off your plate and Web.com makes it easier with affordable website solutions designed for small businesses.
Ready to take the next step? Plan and build it right today, and watch your own business grow significantly online!
How much does it cost to start an online business FAQ
No, you don’t need an LLC to start an online business. But getting one later can help protect you and make things more secure as your business grows.
Yes, you can run an online business without registering it. But if you don’t register, your eCommerce site will be tied to your own name, and you’ll be personally responsible for any problems, like debts or legal issues. Registering your business helps protect you legally and supports stress-free growth.
Yes, most websites require monthly payments for services like hosting and maintenance. These fees can range from $5 to over $500 per month, depending on your website’s needs.
