There is an incredible amount of opportunity to make money online in South Africa today. It’s never been easier and cheaper to start an online store in SA than right now.
A question I get quite often in the South African Online Business Lab (a free community for people interested in making money online in South Africa) is how much does it cost to start an online store in South Africa?
The initial cost of setting up your own online store in South Africa can range from R100 for a basic Woocommerce online shop through to R2000 for an eCommerce store with premium themes and plugins. The monthly running cost will range from R100 to R600 per month
The answer really depends on whether or not you have the skills to build your online store yourself or if you need to pay someone to do it for you.
If you are going to do it yourself, it will cost a lot less than paying someone to build it for you.
The cost of starting your own online store in South Africa will also depend on what online selling or eCommerce platform you decide to build it on. (I’ve written this post on how to sell online in South Africa that you may find helpful)
Let’s look at what it costs to build an online store yourself in South Africa…
What does it cost to start your own online store in South Africa?
There are two costs to take into account when building your own online shop in South Africa. The first is the upfront costs of getting your online store up and running. The second is the ongoing costs of keeping your online shop running smoothly.
It’s important to note that the figures above are if you are going to build your online shop yourself. If you were to use a web developer, these costs would be a lot higher. Let’s dig into the costs to set up your online shop in South Africa in a bit more detail…
The cost to start your online store in South Africa will depend on which platform you decide to use to build your online shop on. It’s this decision that will dictate what costs you will incur. It’s also this decision that makes it so difficult to decide on an online selling platform to use.
In order to make an informed decision you need to compare apples with apples. I’m going to break what you need to start an online shop in South Africa down into 3 parts:
- The Platform or Software that runs the shop
- Web Hosting (Where the website lives)
- Transaction fees
In order to compare online selling platforms you need to combine all three of those costs together to get the true cost of starting an online store in South Africa.
Below is the table of entry-level costs for all the major platforms you can use to build you online store in South Africa:
|Platform Transaction Fees||N/A||2%||1.9%||3%||N/A||N/A||N/A|
You will notice that Woocommerce is the only online selling platform that doesn’t charge a monthly or annual platform fee when all the others do.
When it comes to web hosting the online shopping solutions that charge a platform fee generally include hosting. Except for WP EasyCart, which like Woocmmerce, runs off WordPress. I’ve included a basic web hosting package for those two options. (This is my recommended hosting provider)
Some of the selling platforms don’t charge transaction fees, while Shopify, Wix and Squarepace all do. As mentioned, these are the entry level costs of starting an online shop in South Africa.
So on face value Woocomerce looks like the most cost effective way to start an online store in South Africa with Shopify the most expensive. But that is not necessarily the case…
Hidden costs: What to look out for when starting an online shop in South Africa
A lot of South Africans choose WooCommerce to build their online shop because it is free to use. There are however some hidden costs that you may not be aware of when building your online store with WooCommerce.
Here are a list of the hidden costs you may incur when starting an online shop in South Africa:
- The cost of your time
- The cost of premium themes
- The cost of premium plugins
- Payment gateway transaction costs
Let’s dig into each of these hidden costs of building an online store in South Africa:
Factoring in the cost of your time
To illustrate the hidden costs of using WooCommerce, it’s important to know how WordPress and WooCommerce works.
WooCommerce is an open source eCommerce platform that runs on the WordPress framework. Both WordPress and WooCommerce are free to use but free does come with a price.
Unfortunately, WordPress and WooCommerce is not an out of the box solution. It’s not as simple as plug and play.
Building a website with WordPress and an online shop with WooCommerce is a steep learning curve. If you have the technical knowhow, you can build an online shop fairly quickly.
If you don’t, it’s going to take time, patience and a LOT of trial and error to build an online store that you can use to start selling online. (If you’re set on using WordPress and Woocommerce, I’ve created this free step by step tutorial on how to build a WordPress website that you will find extremely helpful)
Not many business owners take this into account, but the first hidden cost of using WooCommerce is the cost of your time.
The cost of Premium themes and plugins
I’m going to lump the next two hidden costs together. Even though they have different functions in your online store, you’re probably going to need to buy a premium theme and plugins for your WordPress website.
The WordPress ecosystem runs on the premise that developers are going to keep all the WordPress themes and plugins updated. If you run outdated themes or plugins on your WordPress website, they turn into security risks. At best they become incompatible with newer versions of WordPress, at worst they allow hackers to get access to your website.
Just like you, these developers aren’t that excited to work for free. It costs time and resources to keep these themes and plugins updated.
You may be able to find many themes and plugins that are free to use but over time they tend to become neglected by the developers who created them and they slowly become outdated.
I always suggest that you use premium plugins where possible as this supports the ecosystem that your online shop is built on.
Hidden Payment Gateway Fees
I really shouldn’t be adding payment gateways fees into the hidden costs of starting an online store in South Africa but many South African online business owners aren’t aware of them.
I see this issue pop up in the South African Online Business Lab community (The SAOBL is a free online community that you can join now) all too often…
…Over and above the platform transaction fees that online shopping platforms like Shopify, Wix and Squarespace charge, the payment gateway or processor you use to process your payments also charge a transaction fee.
These fees depend on whether or not you are using a merchant account through a South African bank.
Payment processors like PayFast or PayU for example only charge a transaction fee (As you don’t need a merchant account).
While processors like Peach Payments or PayGate require a merchant account to be set up, so as the online store owner you pay them a small transaction fee plus a fee to the bank where your merchant account is held.
Cheap online shopping platforms in South Africa
When looking at online shopping platforms in South Africa, the cost of setting up and running your online store should be of utmost importance.
As explained above, your level of technical ability will play a vital role in selecting the most cost effective solution when creating your online store in South Africa.
If you are fairly tech savvy and have time available to build your online shop, then WooCommerce is without a doubt the most cost effective and cheapest way to start an online shop in South Africa today.
For those people who are looking for an out of the box solution that is not going to take a lot of time and technical know how to set up, then Shopify is the most cost effective way to start selling online in South Africa.
But what happens if you don’t have the money to invest in these online shopping platforms? Is there a way to sell online in South Africa for free?
How to start an online shop for free in South Africa
That said, you may be asking, can you start an online shop for free in South Africa? The short answer is yes, but you are going to need to think out of the box to get your online store started in South Africa…
There are a number of online shopping platforms that allow you to sell your products for free. Facebook Marketplace is a fantastic way to get started selling online for free. Bid or Buy is another website you can use to start selling for free. Bid or Buy does however charge a success fee, so that needs to be factored into the price of the goods you are selling.
Both of these online selling platforms give you a great opportunity to start selling online in South Africa with no investment or cash needed upfront.
All you need to do is source products that you can sell on at a profit. You don’t need to start your own website to start with. As you start selling more and more on these platforms you can then invest your profits into building your own online store in South Africa using the resources I’ve shared in this article.
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