7 minute read

How Much Does an eCommerce Platform Migration Cost?

Optimum7 receives approximately two to three hundred requests monthly for platform migration, additional features or functionality to maximize conversions, and the eCommerce bottom line. The marketers have to often discuss pricing with prospects because their concern is the expensive rates. They want to get a better deal. With eCommerce migration, however, the high price is well worth the process.

Balancing Cost vs Value for eCommerce Development Projects & Platform Migrations

If you’re trying to develop your eCommerce site, what is the best way to balance cost versus value?

It depends on the project’s objective. Different projects have various purposes. Your goals from this project will determine the bottom line.

Marketers have to first do a scope and we have to look at and identify where you are today. If they don’t know where you are, they don’t know where we can take you.

After that, you need to determine an objective or your goal. Do you want to increase conversion rates? By how much? Do you want to get into different platforms? Is your ideal customer demographic in place? Are you calculating your average order volume, your lifetime value? Do you know what your cost per acquisition should be? These are all the necessary metrics to determine a quote.

Let’s say you’re doing $5 million but want to do $20 million in three years. Over a 36 month period, the team must be more aggressive with the AOV calculation and lifetime value. Aggressive marketing strategies will change your migration processes or even the new platform. The cost value matrix always depends on what your objectives are.

While Optimum7 is great at sales, the team doesn’t close every single sale. Prospects say, “I chose ABC company due to price.” Those companies are not going to be able to do these complex migrations.

What Online Businesses Have To Pay And Why

How do you tell a prospect that they need to know what they don’t know?

It’s tough because a lot of prospects that come to us for an eCommmerce migration are already in a place where they’re hurting, when revenue is down. When your site has been underperforming and you’re at that critical point where you need to make a migration, then you’re often operating from a fear-based mindset.

Emphasize the value of a more costly migration. Their ROI is going to be there. If you’re doing a migration improperly, then you stand to risk being in a worse place than you were before the migration.

How much are you willing to risk to save money on your migration or your custom development or custom functionalities? There are eCommerce businesses earning $10 million and up on an annual basis and they are jeopardizing a $10 million a year business to save $15,000 in migration costs. This is not sensible.

If you’re looking at this as a cost, you are going to lose. If you’re looking at this as a line item that’s going to deduct from your checking account, you are looking at it the wrong way.

Longterm ROI from eCommerce Migrations & Custom Functionalities

Look at this as an investment opportunity. Fix your roof before it starts raining again. Ninety percent of what the Optimum7 team does during migrations, custom feature or functionality builds is consultation. The team can’t operate just like freelance developers or marketers. The priority is nailing down what will increase your business.

Also look at it from an efficiency standpoint. If your average order volume is $30 and you need to process 3000 packages per day, the team can suggest how you can optimize your warehouse. This includes if you need to be using a third party logistics system or an additional warehouse somewhere in the Midwest.

The consultation really is deep, going beyond migrating data and products. The team needs to deliver a firm execution plan. Let’s say the moving a prospect from, let’s say, Volusion to BigCommerce, or Volusion to Magento, or Volusion to Shopify Plus, let’s just give that as an example.

What are we looking at in terms of the range?

Again, it depends. One could do a very basic migration with no template customization for as low as $6,000. On the other end of the spectrum for some of our larger clients, if you want to include all of these custom functionalities that might have existed on your old platform or want to customize your template, it can cost up to $100,000. The size of your business and the scope of the project determine the price.

The average migration from Optimum7 costs around twenty to thirty thousand dollars. This might look like a lot of money or a lot of cash. Again, however, if you focus on that, that’s the value that you’re going to get.

If you are operating under a fear-based approach during your migration process, you’re going to miss all the details and options to actually maximize and improve your marketing, business operations, efficiency, and visibility.

Conversions are one example. What if a marketer could, during a migration, increase your conversion rate from 4% to 6%? That’s a 50% increase in revenue over a period 90 days? This is very doable at Optimum7.

eCommerce Website Costs

Sometimes the team will quote $30,000 because it’s advanced. This can mean hundreds of thousands of records need to be validated through the API of whichever platform we’re going to. A lot of people think this is just an export or import process. It’s not.

Every platform has different fields. We have to validate every single data. Not only that, but there are also complex three zero one redirect structures. The reason for this is you don’t want to lose your authority or rankings, but rather improve them

There are multiple processes that we use to increase conversions, both on mobile and desktop.

Suppose the prospect says, “I went to this company in India and they’re quoting me $3,000.” What do you say to that?

Don’t do it. You’re going to get what you pay for there. The cost is going to come back to haunt you.

It’s impossible to do an advanced migration process for $3,000. For 3,000, 4,000, 5,000. I want to do this breakdown. If you are doing anywhere from half a million dollars to $2 million, your migration should cost around $15-20,000. If you’re doing anywhere from two to five, your migration should cost $30-40,000. If you’re doing anywhere from $5 million to $10 million, your migration should cost $50-70,000 and up. This is not an import\export. This also has to do with the features and the functionalities that you need to build.

Let’s talk about the functionality, which is development. At the top developments that we do, Carlo, is we do a lot of search and filters. We actually have a very nice upsell package where we do the pre-checkout, post-checkout, the upsells on the order email notification, as well as the nurture afterward, this is a package that we actually offer. Let’s talk about the cost of that.

What is the average cost of a custom development functionality where I’m trying to increase these three KPIs, which is my cost per acquisition, my conversion rate, my average order volume? Actually, there’s a fourth, my lifetime value. What are we looking at there when we’re talking about these average functionalities?

Your average functionality is going to cost anywhere from 5-10, depending on what you want to do. Where it starts getting more expensive is when you want us to start adding different UI capabilities. Those UI capabilities are any kind of reviews, any kind of approval process, transactional emails.

The team did a project recently for a client who does about $25 million. He ships UPS, FedEx, DHL, and USPS. At any point, he has 15-30,000 packages out there on a three-day basis. He wanted us to build a UI to see every single packages’ exceptions: is it delivered, returned, or on the porch? Because we can get all of these details from the APIs of these providers like UPS, FedEx, DHL, USPS. He wanted a dashboard, which is actually very cool, and he wanted to get alerts when these numbers are increasing.

For example, during the first COVID phase, there were too many delays. The trucks weren’t flying, there weren’t enough airplanes, and USPS international shipments were delayed for two and a half months. The client wanted to have a real-time view because it affects his bottom line. This is because sixty percent of his business is returning customers. When people don’t get their packages, they get angry and he has to spend tens of thousands of dollars on support.

The team tracks savings on a monthly basis. He’s saving so much money from shipping because he has so many real-time alerts from all of these carriers. A functionality like that is going to cost $5-10,000.

Design And Development For eCommerce Websites

If somebody claims they can do a custom functionality for less than $1000, don’t do it, because they’re just programming it. They’re just a developer.

What is the difference? Who works on these projects?

The team comprises the Project Director, the Project Manager, the business analyst, and the QA. That’s not even including the developers who are actually building the functionality itself.

Any functionality that you build, first of all, it should not be an experiment. You should have done it before. We’ve done these functionalities thousands of times before. We have processes for every single functionality. If you actually go to optimum7.com/customdashprogram, you’re going to see over 700 functionalities we’ve built in the past 10 years.

You have a Project Director who’s going to execute the project and a Manager that’s responsible. A business analyst will record the requirements and the scope of the project, no matter how small or how big. If you sign a contract and you pay a firm, the business analyst needs to send you an execution plan. This covers what will happen during the next 30 to 90 days, whenever I promise that I’m going to finish the project for you. The business analyst does that.

What about QA engineers?

You’re going to drive yourself crazy if working with freelancers on an advanced project, because you’re going to waste so much time. Freelancers mean well, but they incite ongoing conversations and arguments. The only currency that you don’t get back is time.

After the QA, backend developers will write the code and integrate whatever third party we need for that functionality. You got to have front end people who are going to adjust the UI in the product. The front end needs to know, and these people are expensive folks, the front end needs to know how conversion optimization works.

We have a conversion optimization checklist, (CRO checklist) that we implement on every single project.

If you buy only on price, you’re going to lose money, functionality and future opportunity. When marketers work on migrations, it is a nightmare working with websites that had a cheaper experience. It costs more to fix all these mistakes that other people did and rebuild momentum.

The team focuses on lost opportunity, not the price. The cost has to come out of your checking account. $30-40,000 is going to turn into millions of dollars if a marketer can give you a ten percent push in conversions at minimum. Sometimes marketers can reach up to seventy percent conversions over 12 months. Those clients earn millions of dollars in revenue as a result.

Don’t focus on the cost of the project. Find the best expert and ensure they understand the matrix between these KPIs. This is how you make millions of dollars through the average order volume, conversion rate, cost per acquisition, and lifetime value. Good marketers track these metrics.

Don’t try to save money during your migration processes or with custom development. When you pay for quality assurance, you save on costs in the long run.

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