How Much Profit Margin Should You Make On Building an Eccomerce Site?

by mco5044 7 replies
Hi,

I'm building an ecommerce site for a customer and would like to know the average range for profit margin. This is a huge site with a completely custom CMS.

Thanks
#ecommerce sites, wholesaling & drop shipping #building #eccomerce #make #margin #profit #site
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  • Profile picture of the author mexabet
    There's no limit to the profit margin. Every business venture is different from others. Your profit margin would depend on your business experience, efforts and dedication.
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    • Profile picture of the author mco5044
      Originally Posted by mexabet View Post

      There's no limit to the profit margin. Every business venture is different from others. Your profit margin would depend on your business experience, efforts and dedication.
      Thanks for the reply mexabet, but was that really helpful?

      I'm looking for an average range to help me gauge what I should charge.

      To give some more information, my development team is in India and the time length is going to be around 4-5 months of development
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      • Profile picture of the author dswconsulting
        Its really is dependent upon your given market...on avg I wouldn't accept less than 40%. In a good niche/market with a good supplier 100% is pretty easy to pull off.
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  • dswconsulting is right.

    You need to find out the market of the products. What that means, is you can't have an 'unlimited markup'. Or, essentially, PICK a margin and stick to it.

    This is because sellers do not pick the price items sell for - markets do. So you need to find the ACTUAL prices that these items ALREADY sell for, and then see if those prices MAKE you an appropriate margin.

    If so, then it's a good product. If not, then you move onto another - OR you negotiate a lower price with a supplier.

    Because if you were to pick a price for a product, say, 139.99 for a product, but people ONLY buy that product for 80 dollars as a fair market value, you'll have them sit, and sit, and sit.

    So - it's worth it to find the ACTUAL market worth, minus deductions, and find/create your margin from there.
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  • Profile picture of the author mco5044
    My question is about Developing the E Commerce website itself, not the margins on the products that will be selling on the site.
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  • Profile picture of the author redlegrich
    OK, I'll take a stab here. Estimate the total cost for your sub contractors, add plenty of slop for late delivery and that sort of thing. Estimate testing time and the cost for that. Figure out how much of your time it will take to work with the client and what value you place on your time, and how much time to project manage the contractors. Then double that amount (the dollar value). Then add maybe 20% more because all of these estimates will be off by a lot (and not in your favor). And believe this, it will take twice as long as you think.

    Personally I think you are nuts to do a custom CMS. There are plenty of great open source products out there.
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  • Profile picture of the author dswconsulting
    Sorry....i didnt catch the true meaning of your post until after. This sounds like a question better directed to a developer forum. However i have a friend that owns a industrial supply business and his custom site cost over 30k. As you can imagine there are thousands of products to be uploaded. Its a matter of manhours. Measure one days progress and calculate from there.
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