magento-cost

How much does the store on Magento cost?

9.09.2019 / / E-Commerce

If not specified, this question will remain without a clear answer. With the cost of the store based on Magento platform is like with the price of a car. A used Fiat will cost much less than a shiny Audi right out of the car showroom. E-Commerce in the basic version is less expensive than an advanced platform full of the latest features.

We know that every business decision is based on the cost of the project and the price of implementation. It is very important in this case. Therefore, in the following article you will find information about:

  • what factors influence the cost of implementation,
  • what information will help the agency to evaluate your project,
  • where you can look for additional savings,
  • how some of our implementations looked like and how much time they took to better visualize the price spread.

This will give you a better understanding of cost estimation and a solid basis for taking further steps. Feel free to read!

Cost-affecting factors

magento store price

Let’s start with the basics. The cost of implementing Magento (and any other online store) consists of:

  • concept and graphic works,
  • implementation of the basic version,
  • changes in the user interface,
  • changes in the application logic,
  • integrations,
  • quality assurance (testing of implemented solutions),
  • accompanying services (project management, marketing, copywriting, training, etc.)

Bad news – all of them are must-have. Even worse – it may not end there, especially if the implementation of the online store is followed by further organizational changes, e.g. digital transformation.

The good news is that not all factors have a strong impact on the cost of the shop, and even better, they can be optimized (about this later). You can also transfer some costs to yourself, which will also be a certain optimization.

Let’s take a look at them all one by one.

Before you start

Although we recommend Agile methodology, one thing is for sure – there is no good sales without developing an effective strategy. Proper definition of customers (for example by creating Buyer Persona), recognition of their needs and reflection of your business in the Internet should happen before the beginning of work on the store.

Since the article is about the implementation of the Magento based store, I assume that the business requirements have already been written down.

If this is not the case, I recommend a complete e-book supplement “100 and one questions about your new e-Commerce”.

At this stage I have a few tips that should help you:

  • B2B / B2C / M2C / B2X? – The sector for which you will be offering your products has a big influence on what costs you should expect. Online shops for B2C will usually be cheaper than others. This is because of the differences in the number and type of changes needed. B2B is often driven by its own rules and sales characteristics depend on the policies of the company, the industry and the customers themselves. Example: Multiple accounts, multiple shopping carts and individual business conditions work well in B2B. Advanced product configurators are also much more common here. All this will translate into the valuation of the work.
  • Strategy is about needs, not solutions – Very often customers come to us with the need for ready-made solutions. This is not a good start. Sometimes the client wants a specific functionality, which Magento does not have, but the platform offers something equally good. It may turn out that modification that customer requires is a big cost and a better solution is to use the solution offered by Magento.
  • Valuation is as good as the materials on which it is based – Each agency evaluates the product based on knowledge that comes from outside and experience that comes from inside. Unfortunately, the first element likes to fail and valuations are based on a small amount of information that fits on an A4 sheet of paper. Then it is impossible to give an approximate cost, and we return to the starting point – to perform a proper analysis. Of course, this does not block the signing of the contract and the start of the project, but it is in the latter case that we will obtain a better estimated budget.

Graphics and UX

In fact, this stage may also take place before Magento is implemented, because it is easier to talk about something we can look at instead of reading the supporting documentation.

However, I will devote more attention to this section.

The cost associated with graphic design depends mainly on:

  • the number of sub pages that we will design,
  • making prototypes (if there is a need),
  • the iteration of every project.

UXs are prototypes that are supposed to show how the user will interact with the online store. Many entrepreneurs underestimate the advantages of mock-ups and decide on a graphic design right away.

This is a huge mistake!

There are several reasons – the most important one is that changes in graphics are more expensive than in the prototype. If there are many of them, the distribution of work will pay off. Additionally, UX and graphics concerns two levels – how something works and how it looks. Often the image of the system will be obscured by its appearance, which will unnecessarily drag discussions. If we multiply it by the number of needed graphics – it will be a big cost.

Implementation of the basic Magento

magento cost

When I talk about implementing primary Magento, I mean more than just the installation. This one (in the basic version) is not complicated at all.

However, the basic Magento for a large project is much more. That’s what they’re all about:

  • the server infrastructure of the production version,
  • stage/test/dev servers for the purposes of the work,
  • implementation of backups,
  • implementation of the server monitoring system and logs.

The bigger the project means the bigger the team. More servers and higher cost of “starting”. Attempts to take shortcuts, in this case, will make it difficult to automate implementations and maintain high quality in the future.

Changes in the user interface

Look, less money in the wallet, and we haven’t even touched Magento yet. Now we will do it.

We explain to our customers that the cost of changes in the user interface has two components:

  • the difficulty level of graphics – depending on how difficult the graphic design will be (non-standard solutions, specific content composition on smaller devices, animations), much more time will be spent on their creation so everyone could feast their eyes;
  • number of additional elements – the cost of implementing a user interface will be much lower when we talk about a relatively standard Magento than when there are additional configurators, extended sub pages and so on.

The cost also depends largely on the amount of material that needs to be implemented. The more graphic designs you have and the more complex they are, the higher cost is waiting for you at the implementation stage.

A good way to verify the level of complexity is to check what Magento can do in the standard package. With the help of demo versions, which are available on the Internet, and on request at the e-Commerce agency.

Changes in the operation of the platform logic

Together with the changes on the user side, there are usually some in the application. Of course, they can be different, which can be seen in the price difference.

The price of logic changes consists of:

  • adding data of relevant views and user elements,
  • servicing what the user is doing,
  • modification of the way Magento works,
  • functionalities that go beyond those available in Magento.

There is a rule that assumes that the longer list of requirements, the higher cost is expected. It is good to verify the capabilities of the basic version of the store.

Unfortunately, there is no better way to determine the work than to face the scope of the project. Not without a reason we talk about them that they are dedicated. Such an approach is also required.

There is no doubt that changes in the operation of the platform logic is most often the most expensive part of the implementation of the online store.

Integration

We rarely work on a project where there is no integration with the company’s internal IT.

This is mainly due to the fact that we work with mature businesses, which have been performing their operational activities for years and without a system support we could not operate on such a scale. However, thanks to the increasing availability (e.g. SaaS solutions), also small businesses have gained much more tools than in the past.

Mature and efficient e-Commerce requires the integration of all the elements -automate what can be automated and reduce the scale of errors caused by the human factor.

What affects the cost of integration?

  • number of systems – integration with one is much easier to maintain than with many systems (e.g. separately WMS, PIM, CRM, ERP);
  • integration method – applications that provide the possibility of integration (e.g. via API) are safer to integrate than “digging” directly into the database;
  • documentation – integration of an undocumented system is more R&D than programming work. Unfortunately, it’s common for many projects, so you have to take it into consideration;
  • scope – “everything with all” approach will be more expensive than sending only those data that are needed in the direction in which there are real changes.

Of course, the concept of integration also includes all payment methods, analysts, couriers and so on, but on the scale of a large project these costs are not high.

Quality assurance – testing

Despite the common opinion, programmers do not test their own solutions. I mean, they can do it, but they shouldn’t.

There are two reasons for this:

  • A programmer will not detect as many errors as a professional tester (especially when testing his own code);
  • The programmer feels much better in the environment in which he or she programs.

Therefore, a team of testers who will verify the correctness of the elements, the whole solution and the stability of critical paths, is an invaluable support.

What does the cost of quality assurance depend on? From the work that was done earlier. In the case of front-end, we verify the performance in browsers, in the case of backend, the boundary and use scenarios, in the case of integration, the correctness of data transfer.

As you can see, this is a cost that is highly dependent on the size of the range. It represents about 10-15% of the time needed to implement the project.

Accompanying services

The implementation of Magento is not only about technical work, but also about the people who do it. On our blog you will find an article about the optimization of the project team. Apart from its heroes (e.g. project manager and programmer), it is also worth mentioning:

  • product owner, who will understand the project and support implementation processes,
  • an analyst who’s gonna write the documentation,
  • marketing, which will feed the store with data and content.

If you do not have such resources at your own, the agency will take care of them. This is another 10-15% of the project (because the work is again dependent on the duration and size of the implementation).

5 ways to optimize costs

optimizing costs of magento implementation

You can see that the time taken by the project can be very different. However, there are ways to reduce some costs and optimize others. Get to know some of them.

Transfer some competences to yourself. We always strive to ensure that our clients actively participate in the project. In this way, the relationship changes from “we – our customer” to “we – our customer’s customers”. And that is exactly what we want, because the shop does not earn money from the owner, but from satisfied customers.

Transferring part of the competence to yourself is also a way to reduce costs. The people you can hire on your side are:

  • E-Commerce manager,
  • product owner,
  • marketing.

You will get lower costs, better communication, more transparency in the project and more comfort in your work. We know from our experience that a project which is “letting go freely” to an agency will never use the potential of the company itself, which commissions such a project.

Don’t break down an open door

I have already mentioned that part of the costs can be avoided by putting needs before the agency, not a ready-made solution.

Why? The agency will first propose to adjust the requirements to Magento’s capabilities. This is the first profit. The second one? The agency will look for modules (which there are many) and will propose the use of the most suitable ones.

I don’t think it requires explaining how many savings it involves. You also gain support of an external company, updates and often much more than you needed. It pays off from every side. You will be able to use the saved budget in another place (for example, to refine the solutions that are typical for your business).

What about a template?

Everyone is attracted to their individual looks. We would also like to make websites with a scheme.

However, we must take into consideration that a shop without certain solutions will not work, but with a ready-made template – yes. Therefore, when the budget is limited, we propose to our customers to use a template that is simply good and adapt it to their needs.

Pay attention to how much it reduces the time needed to complete the project:

  • we avoid the process of building the concept of the store itself,
  • we have most of the graphics,
  • we make UX only for the items that are missing (e.g. the configurator),
  • most of the graphics of new pages are made based on existing visualizations,
  • most of the graphics are already implemented.

Of course, every template is different and you should not choose it without the support of a technical person, but the decision to use a “ready-made” one can save many budgets.

Nothing stands in the way of making bigger graphic changes in the future. But only when the shop will be earning its living.

MVP

Do you remember when you started your company? No matter how many years ago it was, you’ll probably agree with me that customers won’t start calling on the first day.

The same will happen with the online store.

Therefore, in cooperation with the agency, it is worth to come up with an implementation that will allow for a return on investment in the first place. The Minimum Viable Product (MVP) version has one more important advantage – thanks to quick access to the store for your customers, you will receive invaluable feedback – and this can again save money, which you would put into potentially unnecessary functions.

Work in Agile

I know, you have to get used to Agile. This is due to many factors:

  • limited trust in the company,
  • the risk of budget overruns,
  • the risk of endless deadlines,
  • no responsibility for the quality of the project.

We hear these comments every day. And they are often unreasonable – but the problem is not the Agile methodology itself. The problem is most often the company that does not understand it.

We offer our customers pilot months, we have our success stories, we give reports, current insight into the work and much more – just so that they can gain trust and do not have to sacrifice too much of that trust.

But Agile in itself is not an advantage. What it is the ability to respond to current needs and control the project on an ongoing basis. The truth is:

on paper, things look different, things look different in the graphics, things look different in the process of implementation.

If we make an innovation – it’s hard to predict the whole thing – it’s like describing a picture that hasn’t been painted yet. I give you a guarantee that the scope of your project will change during the work, so if you trust the company – you will pay exactly what your software is worth.

Cheap, expensive, very expensive?

magento cost optimization

There are many factors that influence the cost of an online shop (including shops based on Magento).

We have prepared a table for you, which will give you an even better idea of the costs and what you should expect from e-Commerce companies.

Strategy
A brief which contains functional and non-functional requirements Low impact on a budget
Brief needs to be specified, no requirements, user stories Medium impact on a budget
Lack of business requirements, project details needs to be specified by the implementation company, required workshops, analysis and deepening of needs Large impact on a budget
Graphics and UX
We use a ready-made template Negligible impact on the budget
We use a ready-made template, which we modify Low impact on a budget
We create dedicated graphic designs and UX Large impact on a budget

Note: The budget also depends on the amount of material required for the project.

Implementation the basic Magento
Implementation of basic architecture Low impact on a budget
Implementation of server architecture, environments, backups, monitoring system Medium impact on a budget
Changes in the user interface
Easy stylistic changes Low impact on a budget
Modifications of the template (graphic design) Average impact on a budget
Replacement of a template with a dedicated one due to custom graphics High impact on a budget
Changes in the operation of application logic
Possibility of using ready-made modules Small impact on a budget
Minor modifications of the standard Magento Small impact on a budget
Lots of dedicated and complex functions Very large impact on a budget
Integrations
Basic integration (using plug-ins) Small impact on a budget
No existing solutions, support for complex processes Very large impact on a budget

Note: lack of documentation for integration further increases potential budget

Other
Quality assurance up to 15% of project costs
Consulting and analytics up to 15% of project costs

Examples of implementation scenarios

From all these correlations, it can get dizzy. For this reason, I will quote 3 projects for our customers with the number of hours required to implement the project.

The following descriptions and time consumption assume the implementation of full business assumptions. However, they do not take into consideration the development which, after implementation, usually lasts for the whole time of its functioning.

A simple shop for the clothing industry

Our client took his first steps in the fashion industry. He selected Magento because of the possibility of the further development, but for a start he needs something “that sells”.

The requirements of the project were not high:

  • implementation of the basic Magento 2 with a ready-made template,
  • a little stylistic correction,
  • reconstruction of the product card,
  • implementation of several additional modules (e.g. advanced promotions, look book, checkout module, online payments),
  • other things did not appear (for example, there was no ERP yet to integrate with) or the customer actively helped (shop configuration, introduction of a product offer).

Implementation time: approx. 600 hours.

Simple B2B for the supplier of power transmission components

One of our B2B implementations seems to be a great example of an average cost project.

The company needed to implement Magento to support its customers. It was a part of the image change, which was supposed to make the company gain in the online channel and eventually starts expansion into foreign markets.

The project required from us:

  • dedicated projects for the most important pages on the site,
  • significant modifications on the front-end side,
  • implementation of mechanisms typical for trade between companies: subaccounts, credit limit, inquiries, support of a sales representative,
  • integration with ERP (all orders were handled in an external system).

Implementation time: approx. 2500 hours.

Sales platform for an international supplier in the business sector

This is one of the biggest players for which we have implemented the project. The assumptions were complicated:

  • implementation of four individual stores in several language versions for particular assortment groups,
  • individual graphic designs for all brands,
  • implementation of the PWA,
  • support for B2B functions – many shopping carts, individual prices, offers, subaccounts, invoices, credit limit,
  • advanced configurators for several product groups,
  • integration with the price engine, ERP, WMS and PIM,
  • change in the way many Magento elements work and additional, individual functions.

This is definitely one of those projects that change the view of the market.

The time required for such implementation: approx. 9000 hours.

Summary

We always say that a good implementation of online sales is the sum of three components: a good product, a good strategy and a reliable, professional implementation company.

It is also an investment. If you meet all three of them, it will pay off more than you can expect. I hope that reading this article brought you closer to the general costs of the project and allowed you to place yourself in one of the three categories based on our scenarios.

If not – remember that you can always let us know, we will help you with the cost estimation. Meanwhile – good luck!