With great features and user-friendly interfaces, Magento is undoubtedly one of today’s leading website-building platforms. Its reputation for empowering businesses to build strong online sales channels has made it a popular choice for merchants looking to establish a strong online presence.
However, the path to harnessing Magento’s full potential is not without challenges. Building and running an e-commerce website on the Magento platform involves a number of technical procedures, each of which adds to the overall cost of the venture. As a result, figuring out the exact costs required to set up the desired online store might be a challenging task.
In this comprehensive guide, we will delve into the intricacies of estimating the complete cost involved in the development of a Magento store.
Magento Pricing Breakdown
In terms of pricing, Adobe Commerce (Magento) offers 2 different packages: Adobe Commerce Pro, and Managed Services. Open Source is available for free. Each package has a different pricing plan, features, and support from Magento.
Magento Commerce is a popular e-commerce platform that has many features that make it special. Among these features are detailed reports and B2B capabilities. However, the price of this service can be high, with the minimum fee set at $22,000 and the maximum fee at $125,000 per year.
If you’re looking for a comprehensive eCommerce platform that can handle everything from product management to marketing, then Managed Services is the solution for you. This service costs between $40,000 and $190,000 per year, but it offers lots of benefits that are worth the price tag.
|Annual gross revenue||Adobe Commerce Pro cost per year||Managed Services cost per year|
|Less than $1,000,000||$22,000||$40,000|
There are many different types of Magento extensions, but the most popular ones are those that add new features to the platform or that improve its functionality. Some of the most popular Magento extensions include:
- SEO Extensions – These help your shop rank higher in search engine results pages (SERPs).
- Advanced Custom Fields – This extension lets you add custom fields to various parts of your shop, such as product pages, checkout processes, and order forms.
- Social Media Sharing Buttons – These buttons let you easily share content on social media platforms like Facebook and Twitter.
- Advanced Shopping Cart – This extension lets you manage multiple orders in a single shopping cart, which can save you time and money.
This part depends on your needs. You might want to equip your website with plug-ins to enhance its convenience and usefulness. There
However, a Magento website’s functionality is complete, so you probably won’t need it. The cost for an extension can be anywhere from $50 to $600 and should be carefully weighed when you plan Magento pricing.
The cost of hosting is one of the main components of Magento pricing you should pay attention to. This is similar to renting a space on the main server to store your website data. This cost will vary depending on the Magento service packages you decide to use.
If you use Magento Open Source, the hosting fee is pretty cheap, probably $100-$500 a year. The hosting price for Adobe Commerce Pro will be much larger, varying from $500 – $6,500 per year, depending on your site’s complexity.
However, if you choose Managed Services, this cost is eliminated as the data will be stored in Magento’s cloud.
Read More: Top 10 Best Magento Hosting Providers
This is a fixed cost you have to pay yearly to maintain your website. A domain is the website address. It’s what represents your brand to users. Usually, you’ll invest about $10 – $400 per year for it. There are two main types of domains available in the market with different ranges of price:
- A brand new domain will cost you from $10 to $20 yearly. It is a great option if you’re looking to start your own business.
- An expired domain will require you to pay from $20 to $400 yearly. It may be a better choice if you already have an established business and are looking to expand into a new market. This is because an expired domain will likely still be remembered by people who visit websites that use it. This means that more potential customers will see your website when they search for information about the topic or product you offer.
SSL or Secure Sockets Layer certificates are a certification that your website is secure and safe. Google will prioritize showing sites with this certificate over those that don’t, which in turn increases the credibility of your customers. In addition, it also increases the pricing for Magento from $50 – $300 per year. So why choose an SSL certificate? Here are some reasons:
- Increased security: Your site is more likely to be viewed as being secure and legitimate if you have an SSL Certificate installed.
- Faster loading times: When browsers see a Secure Sockets Layer (SSL) Certificate, they understand that the website is encrypted before sending any data over the network. This can significantly reduce the time it takes to load your pages!
- More sales lead: One study found that 66% of online shoppers trust websites with an SSL Certificate more than those without one. This means that you’re increasing potential revenue by attracting more lead forms and higher conversion rates on your eCommerce platforms!
Digital Promotion and SEO
Online stores make money by selling products to customers. But in order to reach more people, you need to use SEO (search engine optimization) and digital marketing techniques. All of these methods help increase traffic flow into your store and convert shoppers into buyers.
Based on this information, a reasonable budget for website marketing for an average e-commerce website would range from $10,000 to $40,000. This amount should cover all necessary costs associated with online advertising, search engine optimization (SEO), content creation and distribution strategies, social media management services, etcetera.
Make sure you allocate enough funds to cover any unexpected expenses that may crop up during the course of your campaign – after all, nothing ruins a good investment more than unnecessary stress!
Payment Gateway Providers Fees
A significant percentage of global payment transactions are processed by payment gateway companies such as Stripe, Authorize.net, and PayPal. With over 100 million users, Stripe is the most popular payment gateway provider in the world. The fee for a successful transaction starts from 2.9% plus $0.30, notwithstanding the fact that these providers charge different fees for their services. This implies that a successful payment through one of these companies costs around 3% on average.
Magento pricing also involves the cost of website maintenance and upgrades.
Website maintenance is essential for any business, and it’s especially important for those that operate online. Website speed is critical these days, as consumers are increasingly turning to the internet for their daily needs. By improving your website’s speed and overall experience, you can create loyal customers who will continue to visit your site time and time again.
Website upgrades can be a great way to improve your business. Not only do they look nice, but some website interface upgrades also have the potential to boost your revenue. However, implementing these updates will require time and money – typically costing around $90-$130 an hour in total. So, it’s important to weigh the benefits of upgrading against the costs involved before making any decisions.
Use Ready-made Magento Themes
There are a number of wonderful Magento themes available for purchase, all of which cost between $0 and $180. If you’re just looking to get started quickly, then one of these themes may be ideal for you. They all come with pre-built pages and designs, so you don’t have to spend time creating your own from scratch.
Design A Customized Theme
Theme design can take a lot of time and effort, but it’s definitely worth it if you want a custom-made theme that looks great and functions perfectly.
To get started, you’ll need to come up with a detailed proposal that outlines what you would like your theme to look like, as well as the specific features and specs that you need. Once you’ve received approval from your client, you’ll then begin working on the project. You should expect to spend between 40 and 160 hours on this project, which will total up to $5,000+ in total.
Magento Website Development Cost
Usually, you will have four choices for website-building activities:
- Work with professionals.
- In-house Web Development Team.
Those options have different pros and cons. Let’s dig into it!
Work with professionals
This is the most useful option, however, it requires a certain budget. But don’t worry because the amount you spend will often come with quality.
Therefore, if you accept to spend a relatively large amount of money on hiring an agency, you will receive support from a professional and experienced team. They have the capability to turn your ideas into exquisite products in reality perfectly. This investment surely sounds like a good sense of finance.
Moreover, these agencies often have many different service options for you to choose from. Thanks to this, you can reduce Magento pricing.
For example, instead of hiring an agency to do a whole site from scratch (this usually costs $25-$200 an hour), you can save money by purchasing their pre-made theme, then hiring them to edit it. The price often ranges from $300 or less for one website theme.
One of the most reliable Magento web developers to work with is Tigren. We provide diverse Magento services, including Magento website development. We have worked with Magento since 2012, and we know the ins and outs of it.
Developing a Magento store with us means a worry-free process. We will accompany you through the entire process and give advice so that the final result promises to boost your e-commerce business.
In-house Web Development Team
This model is usually only suitable for medium and large companies that need to develop and take care of one or more websites on their own in the long term. Owning a design team will speed up the store developing and updating process. Besides, you can also control the development cycle easily.
However, you will have to pay your team for a very long time. It will be much more expensive than hiring an agency if you calculate the total cost. On average, you need between $60,000 – $80,000 per year for an inexperienced programmer.
Therefore, if your company lacks strong resources, you should not consider hiring a separate team.
This option is quite difficult but not impossible. You can still make a website yourself without anyone’s help. However, to do it, you will have to take some programming courses on your own. These courses’ prices can be free or up to thousands of dollars.
Even with extensive knowledge of web development, the amount of work you have to do will be immense. If you aim to be a business person and not a website developer, we don’t think you should choose this option.
How to Estimate Your Magento Web Development Cost
Step 1: Define the time spent on Magento website design and Magento setup
Buy a ready-made Magento theme: If you build a new website based on a ready-made Magento theme and templates, it would take about 5 hours to implement that theme and set up a basic Magento website. Moreover, you also have to customize/ make some changes to make the template match your brand (e.g.: change logo, banner, colours, layout, …), which will take 15-20 hours.
Design a new theme from scratch: If you want a unique design, you can hire a Magento agency or just a website designer to create a new one to your requirements. In order to do that you have to spend at least 1 month on both design and coding (approx. 160 hours).
Magento 2 Migration: It’s worth noting that for the Magento migration project (from Magento 1 to 2), you also have to spend at least 24 hours on data migration (products, customers, orders, categories,…). Additionally, you should concern about the time for migrating the Magento extensions (3 hours for 1 extension installation and configuration on average). Since it’s impossible to move any Magento 1 extensions to your Magento 2 store, you have to find similar extensions for Magento 2 version. Although this process might take time, it is not included in the cost because you can do it yourself without delegating it to the agency.
Last but not least, your project will take about 24 hours for feedback and deployment on the live Magento site.
Step 2: Define the average Magento developer hourly rates for different regions
From our research, there is a huge gap between the hourly rates of developed countries like the US, the UK, and Australia and developing countries like India, Vietnam, and Malaysia,… due to the difference in their labour costs.
While it costs you $75-150/hour for hiring a Magento developer in the UK, you have to pay just half or even less:$25-50/per hour for having your work done by an offshore Magento programmer in Vietnam but the quality of your project might be the same.
Probably you may wonder why some people still choose to partner with a UK Magento agency instead of going for an outsource Magento company to get a much cheaper price and the same product quality, aren’t you? The reason is simple, it’s obviously more convenient to communicate with a local firm with the same timezone and language and easier to meet face-to-face.
However, more and more people now prefer working with outsourced Magento development companies in Vietnam and India. Owing to modern technologies, they can contact easily through video conferences or via emails so the previous communication barrier was removed.
Also, most of the Magento developers and staff of these firms are trained carefully not only in technical skills but also English. Therefore, you don’t have to worry much about not sharing the same language with your partners.
Step 3: Calculate the cost of hiring a Magento professional(s)
To calculate the website developer cost, you just have to apply the simple following formula: Estimated Cost of hiring Magento developer/ Magento agency = Total Estimated Time for Work (hours) x Magento hourly rate ($)
For example, I will buy a ready-made theme and templates and let the agency implement & customize it in 20 hours. Besides, I need to migrate the database (24 hours) and 10 extensions (3 hours/ extension).
Especially, I would like to coordinate with a reliable Magento agency in Vietnam ($30/working hour), so here are the Magento website development costs I have to pay: Estimated cost for my project (VN) = (20 + 24 + 10 x 3 + 24) x 30 = 2.940 ($)
On the other hand, if I want to conduct the same project with a US agency ($75/working hour), the estimated cost would be: Estimated cost for my project (US) = (20 + 24 + 10 x 3 + 24) x 75 = 7.350 ($) Apart from these costs, it depends on the agency you work with that you will be charged for the support after the site goes live or not.
Step 4: Define other involved Magento costs
Before working with the Magento agency, you will have to prepare some “materials” for your new e-commerce website.
– Magento theme and templates: If you don’t have enough time and budget to design a new website design from scratch, buying a ready-made Magento theme is an ideal solution. A good theme’s price is mostly from $100 to $200.
– Magento extensions: In general, almost all Magento stores have to install several modules and plugins to enhance their functionality and performance. The average price of a Magento extension on the market is $80-100. – Website domain: The cost of registering a domain is $5-20/year.
– Hosting: It would cost you $77-200/year for the hosting fee. Since Magento has a lot of complex features, it requires a powerful hosting server to run smoothly.
For example, I have to pay $100 for the theme, $800 for 10 extensions, $15 for the domain, and $80 for the hosting, the total “material” cost would be $995.
Step 5: Calculate the total cost of your Magento projects
Now, you just have to add up the cost in step 4 to step 3 to get the total estimated cost for your Magento web development project. From the 2 previous examples, the total estimated cost for the whole project would be nearly $4,000 (implemented by the Vietnamese agency) and doubled price – more than $8,000 (carried out by the US agency). Note that these costs are just for reference. Depending on your specific needs and requirements that the Magento pricing might be lower or higher.