Trading on the Internet

6. How Much Will It Cost?

Set-up costs can be limited to hundreds, rather than thousands, of pounds. Running costs can also be much lower than for even the smallest traditional shop.

6.1 You will have set-up costs for your shop, including any shopping basket software and payment processing software.

• Small shops selling a small range of items can sometimes be set up for a nominal fee. For example, BT's Internet Trader Pack costs £19.99 a month for up to 500 products.
• Most shopping basket products are available to buy or lease. Some are free, but these are often more complex to install and configure.

6.2 Your greatest outlay may be on marketing the site, both at the launch stage and on an ongoing basis.

6.3 The main running expense will be wages for whoever keeps the site up to date.

• You may also pay a basic charge - up to £50 a month, depending on the space required - to your Internet service provider for your website.

6.4 You will be charged a processing fee by your bank or the agency handling your credit card transactions.

• Most of the Internet banks and payment processing companies, such as NetBanx charge a set-up or annual fee plus a percentage of the value of each transaction. This is typically one to five per cent, on top of the usual percentage fee charged for credit and debit card transactions.
• However, if your average transaction value will be in excess of £12 or so, it will then make more financial sense for you to find a provider that charges a flat rate per transaction with a low monthly fee.
• If you require instant online credit card authorisation, the charges are higher. You will need to use a specialist online credit card processing company and have special shopping basket software.

6.5 There are various 'turnkey solutions', designed to save you time and effort.

• Some software packages use a template approach that allows you to enter a certain number of products. You normally pay a set-up fee and an annual fee to register for credit card payments.
• You can rent space in a 'shopping mall', alongside other online shops. For example, iShop (www.ishop.co.uk). The more sophisticated and complicated your website and payment system are, the more it is all likely to cost.