Thinking of starting an online business? The reality is that, just like any other business, you need to have some backing. And for those who want to compete in the online retail space, that backing needs to be substantial.
The reality of online retail investment
When it comes to web development, top online businesses spend around $100,000 on their websites. I know of one business in Australia that has just redesigned their website at a cost of around half a million dollars — not counting the five full-time staff on a combined salary of another half million per year, and the million dollars or more they spend annually on Google advertising. And this was all before they even launched their online store.
Of course, you don’t have to spend that much. But the reality is that to compete with the big players in online retail, you will need a reasonable amount of seed capital — from savings, a bank, or an investor. Without it, you can still build something, but you need to have reasonable expectations and be prepared for a lot of hard work.
What does $500 actually get you?
A $500 budget for an online store is simply not enough to build something that will compete in most product categories. Here’s a realistic breakdown of what goes into a functioning online store:
- Design and development — A custom-designed, properly coded ecommerce site starts at several thousand dollars for even a modest build.
- Platform and hosting costs — Ongoing monthly fees for ecommerce platforms and reliable hosting add up over time.
- Product photography — Quality photos are essential for online sales; poor images kill conversion rates.
- Payment gateway setup — Accepting credit cards requires integration and often setup fees.
- Ongoing marketing — An online store no one can find generates no sales. SEO, Google Ads, and social media all require ongoing investment.
A smarter approach for small budgets
If your budget is genuinely limited, consider these alternatives:
- Start by selling through established platforms like eBay or Etsy, which handle the infrastructure and give you access to an existing audience.
- Use the sales from those channels to fund a more serious website investment over time.
- Focus on a narrow product niche where you can compete on expertise and service rather than scale.
The online store trend continues to grow, and there is absolutely room for new players — but going in with realistic expectations and a proper business plan is essential to long-term success.
Frequently Asked Questions
Can you build an online store for $500?
Not one that will make you money. Our e-commerce builds start at $9,990 +GST for a store with up to 10 pages, 20 products and five categories, including payment and shipping setup. Below a few thousand dollars you are buying a template someone else has to make work.
What is the cheapest realistic way to sell online?
Start on a platform that carries the setup for you — a Shopify starter plan, or selling through an established marketplace — and prove people will buy before investing in a custom store. Many successful stores began exactly that way.
What actually drives the cost of an online store?
Product count, how complicated shipping is, payment and inventory integrations, and how much custom design is involved. Twenty simple products with flat-rate shipping is a very different build from 500 products with live courier rates.
What ongoing costs should I expect?
Hosting and maintenance, payment processing fees on every sale, and any paid apps or plugins. Our care plans start at $99 +GST a month, and e-commerce sites generally need the Business tier or above.
