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E-COMMERCE has grown in popularity around the world over the years.
While physical retail stores still dominate in many areas, some entrepreneurs have chosen to side-step the hassle of setting up brick-and-mortar stores.
In this article, we outline the requirements and offer rough estimates of what it may cost to set up an online retail business in Zimbabwe.
Website development and maintenance
A website is the heart of any online retail business.
In terms of the costs of running a website, one requires between US$10 and US$30 a year for the domain name; between US$50 and US$200 per year for hosting the site; and between US$500 and US$5 000 for website design and development (depending on complexity and features of the website).
Also required are e-commerce platform (for example, Shopify or WooCommerce) fees, which can range from US$0 to US$300 per month, and a secure sockets layer certificate, which costs between US$50 and US$150 per year.
Legal and administrative costs
To operate legally in Zimbabwe, business registration is crucial, and this may cost between US$50 and US$200, while licences and permits also fall within the same range.
Accounting and legal fees for initial setup may cost you between US$200 and US$500.
Inventory and storage
The initial inventory varies greatly depending on the products being sold.
To this extent, storage/warehouse costs can range from US$0 to US$500 per month.
Marketing and advertising
Typically, one of the biggest costs for an online retail store is marketing/advertising. For search engine optimisation and content marketing, you can look at spending between US$200 and US$1 000 per month.
Paid social media advertising can range between US$100 and US$1 000 per month, while email marketing can range between US$20 and US$200 per month.
Payment processing
Payment gateway fees typically range between 2 percent and 3 percent per transaction, while bank fees vary, depending on the financial institution.
Shipping and logistics
Shipping costs vary by product size, weight and destination, while packaging materials can range between US$50 and US$200 per month.
Operational costs
Staff salaries can range between US$300 and US$1 000 per month per employee. Internet and utilities can set you back by between US$50 and US$200 per month.
Miscellaneous
Software subscriptions (for example, customer relationship management and analytics tools) for your online business can range from US$20 to US$100 per month. However, some free tools can be available on the internet.
The online retail business, like most ventures, cannot operate without insurance. This may cost you between US$100 and US$500 per year.
While costs vary greatly, and there may be opportunities to use free tools in certain areas, you can expect to spend between US$1 000 and US$5 000 — or more — in initial setup costs.
Ongoing monthly costs can range from US$500 to US$2 000, or even more.
Have you purchased goods from an online retail store? What was your experience of using an online retail store in Zimbabwe? You can send information on your experiences and other feedback through 0771538827 (WhatsApp) or sundaymailonline@ zimpapers.co.zw
Online Reporter