As one of the most popular Ecommerce platforms, Magento offers various pricing plans for different types of businesses, so each can find something suitable for their needs. We prepared a review where we give approximate prices for Magento versions and explain why sometimes the Open Source is not as cheap as it may seem.
Sadly, the cost of Ecommerce websites is not transparent, especially when it comes to Magento. There are too many aspects the cost depends on: the website complexity, custom features or theme, hosting, shipping, and payment integrations. But we created this guide to walk you through the pricing and give you an understanding of how much a Magento website can cost per year.
Table of Contents
Magento Open Source vs Commerce
Magento Development Cost
Additional Magento Website Costs
Conclusion
Magento Open Source vs Commerce
There are two versions of Magento.
- Open Source (former Community) is a free version that you can download and customize.
- Adobe Commerce (former Magento Commerce) is a paid version with additional functionality. You can use cloud version or on-premise. The price for the license starts from $22,000 per year.
Open Source version is considered to be cheaper, as the Magento platform itself is free. But in order to create and launch a decent website you have to spend money on development, extensions, hosting.
Before choosing a hosting or website look, you need to decide whether you want an Adobe license or not. And if the answer is yes, should you use your hosting or go for an Adobe Commerce Cloud. Let us dive into what Adobe offers with its paid version.
Adobe Commerce Key Features and Price: Cloud and On-Premise
Adobe Commerce editions both cloud and on-premise offer lots of pre-installed features that can be useful for business:
- B2B suite including company accounts, quick orders, and shared catalogs
- Content staging, preview, and scheduling
- Advanced marketing and customer loyalty tools as customer segments and attributes, or product recommendation
- Content and system features as an order management system, page hierarchy, or dynamic blocks
- Scheduled data import/export to automatically download financial and customer information
- 24/7 support team
The payment for the Commerce version starts from $22,000, but it depends on the annual Gross Merchandise Value. This number is calculated by multiplying the total price of all goods sold this year. The bigger the number is, the higher the price for the license. In other words, you are paying the percentage from your online income for the Adobe license.
If you decide to buy the license without Cloud services, the price of your website will consist of the following numbers:
Adobe Commerce Cloud is a bit of a different story. Besides all the features that Adobe Commerce has to offer, it also provides quality hosting services:
- Site-Wide Analysis Tool is a feature that allows a deep analysis of the website performance. You have access to the dashboard, where you can find recommendations on improving code, infrastructure, and settings based on best practices.
- PCI compliance — Adobe makes sure that the website using its hosting comply with Payment Card Industry requirements.
- The Fastly Web Application Firewall (WAF), CDN, and DDoS protection – tools that keep the website safe from attacks.
- New Relic — analytic service that helps improve server application interaction, monitor, and troubleshoot the server infrastructure.
As Adobe Commerce Cloud offers hosting services, its price differs from on-premise option. It also depends on the annual Gross Merchandise Value of the company, but the numbers are higher. To know the exact estimation for the project, you need to contact the Magento sales department, but we can give approximate data.
As you can see, the more a business earns, the less percentage of its income it pays for the Adobe license. That is the reason Adobe Commerce is presented as the solution for big businesses and enterprises. But not all enterprises need the features the Commerce edition offers. Conversely, some small and medium-sized businesses may need exactly the tools that Adobe Commerce offers.
Conclusion
Most of the time, the website on Adobe Commerce is more expensive than Magento Open Source one. But the license cost pays back if the Commerce functionality is crucial for your business.
Magento Development Cost
The spending to develop a Magento website depends on the complexity of the solution you want as a result. Basic websites with an out-of-the-box design are cheaper and require fewer development hours. While a custom site with a unique theme, complex integrations, and interesting functionality requires lots of developer hours that leads to more hours of QA engineers, not to mention designer work and business analyst help.
Magento Custom Development
Create a website with unique features tailored to your business
Visit the pageAccording to the Clutch, the average Magento development rate is $50 – $150. If you need a simple website, there is no need to overpay, but remember that Magento is a complex system, and if coded poorly at the beginning, the difficulties might occur in the future if you decide to develop your website.
In-House Team or Outsourced Agency
The in-house developers are more convenient: the team is always in sight. You can manage it easily, the communication is faster as well as the speed of bug fixing. But after the site is created your pricey in-house team is risking appearing on the bench. The price for that is about $100,000 per year.
On the other hand, an outsourced agency is a team of remote employees. It is doubtful that you are the only customer they have. So the decision-making speed is slower. But in this case, you are paying only for the work they do, without extra expenses on the office or working equipment. The prices for development agencies vary from $4,900 to $100,000 per year and the average spendings are $20,000.
Magento Website Maintenance Cost
There is hardly an online store that does not need constant updates and changes. Every business wants to be more convenient for customers, better automated, and appealing. These upgrades are crucial, so it all needs to be handled by a tech team.
Most of the time, maintenance includes such tasks as:
- theme upgrade,
- implementation of uncommon payment or shipping integrations,
- development of new features to improve customer experience,
- implementation of custom import, return, and pick up points services,
- development of a complex custom product with non-default attributes,
- bug fixing.
The Magento website is a complex system that needs constant monitoring and upgrades. The rate of such a specialist varies from $30 to $80 per hour. And you’ll need from several hours per month to a full-time specialist depending on your website.
We asked our team lead Mike Soiko, how much time our developers usually spend on Magento website maintenance:
Sometimes, the maintenance tasks are small, one developer can do them in 3-5 hours per month. But we have some projects that require a team of three developers, a QA engineer, and a designer to work full time. These are large projects that constantly need some upgrades and implementation of new functionality. Website development never stops for such projects.
The True Cost of Cheap Development?
There is also one thing you need to consider while hiring a team or a freelancer. If you choose an inexperienced coder, you’ll pay twice as much in the future trying to fix their bad coding.
We had several projects like this – to make one alteration on the website a developer has to spend hours trying to find a logic in the given code. Even I do this despite 15 years of experience. When I encounter such projects, I suggest rewriting the code. You will have to pay for several more days of the developer once, but if you leave the problem unsolved, you will have to overpay every time the website needs a change or a fix. © Mike Soiko, technical Team Lead
Additional Magento Website Costs
Alongside website development and payment for Adobe license, there are other expenses that an online store requires. These expenses support the work of the website and Ecommerce business. They include charges for hosting, domain, SSL certificate, theme, and extensions. You also have to pay transaction fees to the payment gateway provider and shipping fees. Let us take a look at each type of payment.
Hosting
If you have no intention to buy Adobe Commerce Cloud, you have to choose the hosting yourself.
The hosting type are different, and you have to evaluate the website to choose the right one:
- Managed shared hosting – the cheapest solution that can cost $30-$60. These hostings are used by websites with low traffic and no spikes. You share your server with another website, so the resources are limited. A good example is Krystal hosting and Hostinger.
- VPS hosting – website owners pay $50-$80 for this kind of hosting. The website also uses the server with other websites, but the resources are yours only and are not shared with other websites on the server. For example, there are VPS plans of such providers as A2 Hosting.
- Dedicated hosting – these hostings are perfect for enterprise-level companies and websites that need full control over the hosting environment. It means that you have a server just for yourself and can configure it in any way you need. But the pricing is corresponding – starts from $200 a month.
- Cloud hosting – cloud solutions are made for businesses that intend to grow or those struggling with traffic spikes during holiday seasons. You pay for resources you spent and stay prepared for any growth. The only drawback here is that you can’t precisely estimate your budget beforehand. These hostings cost from $80 to $900 depending on the resources a website is using. A good example is MageMojo.
Wrapping it up with the hosting, shared ones are often not enough for Magento websites. Usually, they require more resources, so the most common choice is VPS and cloud solutions. Small and medium businesses have to pay $60-$90 per month to their hosting provider, which means $700-$1000 annually.
SSL Certificate
SSL certificate protects your website and the data of your customers. It encrypts their payment details and other information passing between the customer and a checkout system.
In most cases, you get a free SSL certificate with your hosting. For example, you get a free certificate if you buy Adobe Commerce Cloud.
If your hosting plan does not include an SSL certificate or you need a different type, you have to spend $50-$900 per year for it.
Domain
The domain issue is the same as SSL certificate one. Most hosting providers offer a domain name for free in addition to the hosting plan. But you have to spend only $10-$20 per year for the domain. So it’s better to choose the one more suitable for SEO and marketing than to stick with choices that some hostings can provide.
Theme
Theme implies the visual attractiveness of a website and UX. By the end of 2021, official Magento marketplace offers five themes, one of them is a free template, the others cost from $30 to $499. You can acquire them from the official store, find alternatives and buy them from Magento partners, or get a custom solution.
In most cases, a ready-made theme is cheaper. There are even some that are freely available in the Magento ecosystem. But you will have to make some sacrifices in terms of your website look with that type of theme. There is also a more expensive solution, but it is still cheaper than getting a custom theme – get a ready-made template and pay some extra to customize it to your needs. It usually requires much less time for a designer and frontend developer to change a ready-made topic than to create one from scratch. That is a common solution and typically costs about $4,000-$5,000 including the hours of both designers and developers.
What is great about the customized theme is that the team creates it according to the business. It can consider the items you sell, your targeted audience, and the specifics of your unique selling proposition. But the customized theme is more expensive and can cost you up to $10,000, depending on the rate of a frontend developer and designer.
Extensions
Every Magento feature is basically an extension but a pre-installed one. So when you buy a Adobe Commerce you get the same core as Magento Open Source with pre-installed extensions that widen its functionality. It means extensions are natural for Magento.
It is the reason Magento is so flexible and can be used for any Ecommerce business: every feature is possible. There are over 3,500 extensions on the Magento official marketplace. The pricing is very different: starting from free and cheap extensions of about $20, finishing with expensive apps that cost up to $15,000.
Depending on the amount and type of features the business needs, the total amount of money spent on extension is impossible to count. But usually, the price is in the range of $1000-$2000 per year.
Payment and Shipping Fees
Owning an Ecommerce website means that besides paying for the website maintenance, you also have to spend money on getting the purchase done and delivered. It means a business gives some percentage of income to its payment gateway and shipping providers.
The prices depend on the providers, the type of product, and customer location.
By default, Magento has integration with PayPal, Braintree, and Authorize.Net. But the system allows adding other payment gateways. The transaction fee is 2%-4% per order.
It’s more complicated with shipping carriers, as everything depends on the method of shipment, type of the product, and distance. So prices vary a lot.
Conclusion
No company can estimate the exact amount of money you have to spend to build and maintain an Ecommerce website on Magento. To calculate the budget, you need to consider many aspects:
- the complexity of the website
- number of products you are selling
- the level of customization you need.
So the prices vary a lot from business to business, but you still can estimate the approximate budget when you know if you are going to buy the license and what hosting you intend to use.
