How Much Does it Cost to Start an Online Business?

Hey, guys! I hope everyone is doing well. First of all, thank you for stopping by and reading my post.

Today I am going to be sharing an article on a rather interesting topic, How much does it cost to start an online business?

This is definitely a hot topic because more and more people are trying to start a business online so that they can meet their personal needs. Whether is to supplement extra income or to work full time from home and spend more time with their loved ones, an online business can provide you that.

If we rewind back 15 years from Today, nobody would ever have imagined that it is possible to make a living online, or, at least, think that you need to be a very smart person with lots of experience in programming to start earning revenue online.

Those that felt that way are definitely not wrong because to build a website(the core of an online business) in the past, you need to have a vast amount of knowledge of programming and coding. If you are not a technical person(like myself), you could forget about trying to make money online.

Ok, enough of history… last fast-forward back 15 years!

Today, things have changed tremendously in the online space. What that we thought was impossible has now become possible, all thanks to technology advancement. Now websites can be built in seconds via website builder software. You don’t need any prior knowledge or experience about building one, just a few clicks of your mouse, and you have your very own website.

Awesome, isn’t it? 🙂

Actually, I can totally relate to this. Just 12 months ago, I didn’t even have the slightest of thoughts that I will be making money online. Funny enough, I have built several online businesses, quit my 9-5 job, earn a five-figure income per month and most importantly have the freedom to whatever and whenever I want… and all of these happened in a space of just one year. – If you are interested to know how I did it, you can read more about it here.


What Kind of Online Business are You Thinking About?

Before I go into details on the cost of starting an online business, you first want to decide what type of business are you trying to establish online.

Oh ya, I also wanted to mention that building an online business is no child’s play, it’s only for serious people who really wants to succeed online. If you are someone that is looking for overnight success or not willing to put in much effort, I’m afraid this opportunity is not for you.

Alright, let’s move on…

There are several business models that are very popular and works well in 2016,

#1: E-commerce Business Model

E-commerce is known as an online shopping business. Basically, you open an online store and sell products, take care of delivery, store your products and customer support too. It can be a retail shop where you sell other brand products, or you can create your own products and sell.

Starting an E-commerce business is similar to starting an offline business, but the only difference is it’s now online. Therefore, you are still required to spend some money upfront and get the inventory to be stored somewhere.

I wouldn’t recommend this if you are someone totally new to starting a business because things can get a bit overwhelming.

Things you need


Web Hosting ✔

Autoresponder ✔

Advertising ✔


#2: Freelancing Business Model 

Freelancing is a good way to generate great income online but in order for this business model to work, you need to have a useful skill that clients are looking for.

For instance, your skill is SEO(Search Engine Optimization), you have white hat/grey hat tricks and other ways to help business get the business to rank well in search engines, and most importantly get them traffic. – This is a skill, and clients are willing to pay big bucks for such skills.

Or if you are good in writing, you can also offer writing services. If you need an idea of what are the different freelancing services people are often looking for, you should check out the freelancing websites like upwork.

For those of you who don’t have anything to market about, then this is an opportunity that is definitely not for you.

Things you need

Domain ✔

Web Hosting ✔

Autoresponder ✔

Advertising ✔


#3: Affiliate Marketing Business Model

The idea of how affiliate marketing works is very simple. You promote someone else’s product/services and earn commissions for it. Some of the benefits of Affiliate marketing is, you don’t need to have your own product to sell, therefore not worry about inventory cost/storage, delivery and customer support.

All in all, you don’t have to worry about literally anything. All you need to do is, bring traffic to the products you are promoting and when the customer makes a purchase you get a commission. Having a website is a MUST if you want to have a successful affiliate marketing business.

There are people making 6 or even 7-figure online through Affiliate marketing, but most of these people started very long ago, thus have lots of experience and knowledge on their hands. I don’t want you to keep your expectations that high because those results are not typical but just wanted you to have an idea of the potential.

This is by far my most favourite business model. The majority of my income is actually generated from here.

Things you need

Domain ✔

Web Hosting ✔

Autoresponder ✔

Advertising ✔


#4: Amazon Seller Business Model

As the name suggest, amazon seller means selling products on Amazon. Basically, instead of setting up your own online store, you are leveraging on Amazon to get traffic to your products. According to statista, Amazon is getting over 188 million users every month. So you see, the chances of making sales in Amazon is much higher than through your own online store.

But of course, there’s always a catch. You to pay a small fee to sell on Amazon. I will not go into too many details on that now, maybe I will create posts on it in the future.

There are two ways you can go about selling your stuff on Amazon.

1.You be the Merchant – Meaning, apart from the website where you products are placed, the rest are exactly the same as an e-commerce business where you handle the inventory, delivery and customer support.

2.Use Amazon FBA(Fulfilled by Amazon) service – This means you send your products to Amazon storage centres and they will take care of the packing, delivery and customer support for you. Obviously, there is another catch here, you will have to pay a fee for every product that Amazon settles for you.

This will greatly reduce your profit margins, that is why it is not recommended to sell products below $10 via FBA because the profit margin is way too little for anyone’s liking.

Things you need

Domain Χ

Web Hosting Χ

Autoresponder Χ

Advertising ✔


#5: Digital Products Business Model

Selling digital products is somewhat different than selling physical products. Digital products are something that can be bought, opened and used online. This saves you the trouble in so many ways, you don’t have to worry about storage, inventory and shipping. However, you have to still focus on customer support if you want to have old customers coming back for you + new ones.

Everything is about building trust and offering value to your customers. Offering a money back guarantee is a good way for more customers to come forward a try out your product with hesitation.

In order to create a successful digital product, you first have to identify a group of audience you want to help. And then come up with a solution on how to tackle that problem. Your digital product can be literally anything. For e.g. “How to build a shelter using materials from nature” can be a digital product as well. Your target audience would be people who like to go trekking or camping in the forests, or people taking nature documentaries.

See where I am coming from?

There is a lot of potentials to make money. But remember, quality if very important. There are tons of scam and shady products that are being sold by random people just so that they can fill their own pockets. In reality, their products don’t offer any value.

Things you need

Domain ✔

Web Hosting ✔

Autoresponder ✔

Advertising ✔


As you can see from the above, I have broken down in general what are some of the necessary things required to start an online business. Domain, Web Hosting, Auto Responder and Advertising.

The above 4 are not the only things that are required but you can see that most business models will require these things, therefore, I will go into details about them below.

The business model that requires you to sell your own products is difficult to predict. Because the cost will vary from one to another. For instance, different products have different prices, how you ship your products, which country you live in and etc… factors like this has to come into consideration to determine how much exactly you require for running a specific business model.

If you are looking to sell products online whether retail or your own, it is necessary to have money in your hands. I would say a minimum of at least $2000 – $3000, even then it will vary with how expensive your product is and the size of it too.

My recommendation would be, try to go for products to sell below hundred and doesn’t weigh too heavy. Products above hundred always leave customers in the consideration phase instead of purchasing, so in order to lose your customer sell something that seems more affordable to all. Also, if your products are too heavy, you are going to be spending lots of money just for shipping itself, which I don’t think is ideal for people who are just starting out.

So in summary, sell your products in a small quantity first. Pay close attention to the amount of money you spend for the next few months. This will give you the amount of money required for your business. Then if you are comfortable, you can scale your business by having a larger inventory or even sell different products.


How much does it Cost?

#1: Domain

In order for you to run your website, you need to have a domain. For e.g. Amazon’s domain name is and my domain name is

Domains are going to be the identity of your business, so it is recommended you create a brand for yourself. So whenever someone sees your name, they know who you are. It’s always preferred to get domains that end with .com instead of .net and .org. One of the reasons is, they tend to rank much better in search engines.

I don’t think you need to worry too much about your domain name because they only play a very small part in your online business. How successful your business is going to depend on much more factors.

So…how much does a domain cost?

Domains are not expensive. You can get them for as low as just $10 for a year from domain registrar’s such as Namecheap or GoDaddy.

#2: Web Hosting

Now, once you bought your domain, doesn’t mean that your website is visible to everyone online. You still need to host your website on a server so that the world can see it. You can get your website hosted for less than $15 per month. What you pay is what you get. The more expensive your hosting, the more sophisticated and benefits it has.

Take note, unlike domain name which is yearly, hosting is a monthly subscription thing.

Choosing a good hosting server is very important. One of the most important things to take into consideration is their support, how effective and efficient they are. Good support can solve your hosting related issues quickly(if you ever come across one). I have several websites hosted at Wealthy Affiliate, and till today, I haven’t faced any technical issues.

#3: Autoresponder

An autoresponder is a program that sends email automatically to your clients, customers or subscribers. Let’s say you are having an online store selling clothes. Auto responders can send an email to your customers indicating that you have new arrivals or so. All these can be done by using auto responders.

“The money is in the list”, most “guru’s” or experienced marketers will tell you this.

It’s not a must to build a list to generate income online, but building a list is recommended if you want to earn more money. Obviously, who doesn’t want to earn more money right? So, incorporating an Autoresponder to your website is highly encouraged.

There are two sites that are famous for these services, Aweber & GetResponse. Both are not too expensive, you can get them as low as $19 per month.

#4: Advertising

What is a business without advertising? So… obviously, you will be doing some kind of advertising to get traffic to your website and products at some point in time.

Paying for traffic is a good, but only when it is done right. Meaning, you have to target relevant keywords in order for your traffic source to be as accurate as possible. If not, you could end up spending lots of money without making any profits.

Personally, I feel that if you are just starting out, try not to get involved in too much advertising. If you really want to succeed on paid traffic, you need to learn how to do it the right way. I suggest you first learn as much as you can before you dive into advertising.

Advertising includes Facebook Ads, Google AdWords, Bing ads and  etc.

There is no specific cost for advertising, this will totally depend on your budget. The good thing about advertising is that you are in total control on how much to spend and when to stop so you can never go beyond your affordable limit.


My Recommended Business Model!

Out of the 5 business models that I shared with you earlier, the one that is my favourite and, I am going to recommend you is Affiliate Marketing.

Like I mentioned earlier, Affiliate Marketing is the most simplest business model to get started with. Other business models that requires you to create or sell your own products are far more difficult that you might think it is.

There are a lot of things that you should put into consideration such as

  • What products to sell
  • Supplier/ Manufacturer
  • Where to store the products
  • Shipping, delivery
  • Packaging
  • Customer Support/refund
  • Requires upfront cost

So if you are someone who is totally new and keen in starting a business, it could take awhile before you learn everything and launch one.

What I will suggest you is, keep your product/service selling in mind first. But start an Affiliate Marketing business first. Once you got confidence and understanding you can think about opening a new business. The best part is you can run both your online businesses concurrently.

Getting started with an Affiliate Marketing business costs you nothing, that’s right… $0! And you can start right away too.

If you are interested in starting an Affiliate Marketing business, the best online course that I can recommend you is Wealthy Affiliate. You can build websites and make money without paying a dime but for those of you who wants to learn in-depth and earn more money quickly you should definitely opt for their premium membership.



Alright, I have come to the end. If you still have any questions, please feel free to ask them via the comment box below. I will answer all of them within 24 hours 🙂



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Hey, I'm Kumar and thanks for dropping by. About a year ago, I was struggling hard to cope with my 9-5 job but now I have quit and started working fulltime from home as an online marketer. The purpose of my website is to help you do the same too. My goal is always to be my own boss and work for myself and I have definitely achieved that. If you want to follow my footstep and start earning money from your own home then you should check out My #1 Recommended Program .

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