A large Adobe Commerce store with dedicated hosting, a custom theme, integrations, and ongoing developer support can cost hundreds of thousands of dollars.
But you can build a Magento Open Source store with one year of managed hosting, a readymade theme, and two extensions in as little as $1,500.
Sounds too good to be true? It isn’t.
Read the rest of our guide to understand the factors that influence Magento pricing, how Magento pricing plans work in 2023, and how you can build a Magento store on a budget.
Let’s start with the basics.
Why choose Magento for your store?
Here are five reasons to choose Magento.
1. Intuitive catalog management features
Magento provides a guided product creation workflow that helps you create configurable products with thousands of variations in minutes. Plus, it supports multiple product inventory sources so that you can fulfill orders from different warehouses.
2. Effective sales and marketing tools
Magento has a suite of marketing tools that support various inbound and outbound strategies. It empowers you to increase product awareness and sales using price rules, newsletters, and analytics tools.
3. Customizable and scalable codebase
Magento’s architecture is modular and fully customizable. Moreover, it uses a scalable and resilient Model-View-Controller framework. That allows you to extend different parts of your store using extensions without compromising the core application.
4. Reliable security features
Magento takes a multipronged approach to ecommerce security. It provides features such as:
- A secure framework.
- Sensitive and non-sensitive data encryption.
- Cross-site scripting and cross-site request forgery protection.
- Two-factor authentication and advanced admin security measures.
In addition, Adobe provides a free security scan tool for Magento users that allows you to test your store for more than 21,000 known exploits.
5. Future-proof architecture
Magento has continuously evolved to meet the changing needs of ecommerce businesses worldwide. Over the years, Adobe has introduced tools like the PWA Studio project to help users adopt emerging technologies.
More recently, Adobe has been working towards transforming Magento into a microservices-based framework that’ll allow merchants to achieve SaaS-like upgradability.
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Factors that influence the cost of Magento
Now that you understand why you should choose Magento, let’s explore the factors that influence the costs of a Magento website.
1. Magento hosting cost
Magento is available in two editions: Magento Open Source and Adobe Commerce. Both are self-hosted software. However, Adobe also offers a paid hosting service for Adobe Commerce starting from approximately $40,000 per year.
The cheapest way to host Magento is with a provider like Amazon Web Services or DigitalOcean. You’ll be able to host Magento on a server for as little as $24 to $48 per month. However, you’ll need to optimize, maintain, and secure the server.
Another way is to use a managed Magento hosting service like Nexcess. Pricing for Magento hosting with Nexcess starts from approximately $59/month, before discounts, and provides you with a fully optimized and secure hosting environment.
Nexcess Magento hosting ensures you don’t have to worry about performance issues and provides you with 24/7/365 technical support. That’s helpful when you’re building an online business.
2. Domain name
Besides hosting, you’ll need a domain name. An average domain name costs around $10 to $20 per year. But premium domain names can cost tens of thousands of dollars.
The domain name cost usually depends on factors like:
- The top-level domain: The last segment of a domain name, such as .com, .net, or .co.uk.
- The length of the domain name: Shorter domain names are generally more expensive.
- Add-on services: Some registrars may charge for additional services like domain privacy or long-term registration.
Once you shortlist a domain name for your brand, you can buy it from a domain registration service provider like Nexcess.
The advantage of buying a domain name from Nexcess is that you aren’t charged extra for renewals. You’ll pay the same amount you paid for the first year.
Additionally, you won’t need to manage multiple logins to different accounts. You’ll be able to configure your website and subdomains easily from your Nexcess account.
3. Magento store development
Magento store development can cost anywhere from a few hundred dollars for minor fixes to tens of thousands for advanced UI/UX customizations. The factors that influence Magento development costs include:
- Custom design and functionality requirements.
- Certifications, experience, and location of the Magento development agency or freelancer.
If you’re comfortable using the command line and don’t need any customization, you probably won’t need to budget for Magento development. But if you aren’t tech-savvy, you’ll need some help setting up your store.
Hiring a Magento developer can cost anywhere from $25 to over $200 per hour. Data collected by salary.com shows that the average hourly wage of a U.S.-based Magento developer is approximately $59. We’ll use that number to estimate Magento store development costs.
Let’s assume you need 100 hours of work for custom module development, design tweaks, and performance optimization. In that case, you might spend around $6000 on Magento development.
4. Magento themes and extensions
The easiest way to save on custom development costs is to choose off-the-shelf Magento themes and extensions. Ready-to-use solutions help you improve the look and feel of your store on a budget.
Like themes, you can buy Magento extensions for anywhere from $50 to $2,000, depending on the extension functionality. You’ll find thousands of Magento extensions across marketplaces like CodeCanyon for everything from custom shipping configurations to checkout optimization.
5. Marketing budget and SEO
Launching your store is the first step toward building a successful online business. You also need website traffic to generate sales.
Ecommerce is a highly competitive industry. So if you don’t have any marketing and SEO experience, you should seek help from an agency or freelancer.
Data from Payscale shows that the average hourly rate for an SEO professional is approximately $20 per hour. However, it can take weeks and even months to execute a successful SEO strategy.
That’s why you should budget for at least 10 to 20 hours initially for tasks like:
- A comprehensive SEO audit.
- Keyword research and strategy.
- Website optimization.
You should also set aside at least $300 to $1,500 per month to drive traffic using pay-per-click (PPC) ads until your SEO investment begins to pay off. Choose a budget you’re comfortable with, and make sure you use social media to drive traffic to your website.
Pricing of different Magento plans
The pricing for Magento is different for each edition. Here’s an overview of the three main Magento pricing plans with a detailed breakdown of the initial expenses.
Magento 2 and managed hosting
The open source version of Magento 2 is free to download. Although you don’t pay a Magento license cost per month, you will need a hosting plan to use it. Here are the costs you might incur to build an online store with Magento 2.
|Expense||Minimum cost||Average cost|
|Magento Open Source license||$0||$0|
|Managed Magento hosting (1 year)||$720||$10,000|
|Magento extensions (2)||$350||$2,000|
|Marketing, PPC, and SEO (1st month)||$300||$5,000|
|Total upfront cost||$1,490||$23,700|
Without custom development, you can build a Magento store for as little as $1,500. But you’ll need to use a readymade theme, purchase a maximum of two paid extensions, and stick to a lean marketing budget.
You’ll spend more time setting things up yourself initially, but you won’t need to worry about hosting Magento 2. Your managed hosting provider will handle that for you.
A bigger budget will enable you to outsource development, marketing, and SEO tasks. You’ll have better access to customizations and integrations initially. Plus, you’ll be able to invest more in driving traffic to your store and generating sales from day one.
Adobe Commerce, also known as Magento Commerce and Magento Enterprise, is the paid version of Magento Open Source. It provides everything included in the open source version, plus features like:
- Visual merchandising.
- AI-powered product recommendations.
- Advanced inventory management.
- Better analytics and reporting.
- Gift card support and other customer loyalty tools.
You also receive core application support from Adobe’s team, but you need to host the application yourself. That’s why it’s only suitable for businesses with bigger budgets and advanced needs.
Here’s a breakdown of the costs of building an online store with Adobe Commerce.
|Expense||Minimum cost||Average cost|
|Adobe Commerce license||$22,000||$125,000|
|Managed Magento hosting (1 year)||$15,000||$39,000|
|Magento extensions (2)||$1,000||$5,000|
|Marketing, PPC, and SEO (1st month)||$2,000||$10,000|
|Total upfront cost||$40,520||$200,200|
Adobe doesn’t advertise the pricing for Adobe Commerce on its website. It provides pricing on a case-by-case basis, based on the business’s Gross Merchandise Value and average order value.
The license price mentioned above is only an estimate. The actual cost may be different for your business. However, it’s safe to say that you can expect to invest anywhere from $40,000 to more than $200,000 to build an online store with Adobe Commerce.
Adobe Commerce Cloud
Adobe Commerce Cloud, also known as Magento Cloud and Magento Commerce Cloud, is the cloud-hosted version of Adobe Commerce. It’s available in two plans with different infrastructures:
- Starter: For smaller stores with simpler needs.
- Pro: For larger enterprises.
Both plans include managed hosting for Adobe Commerce, PCI compliance assistance, and 24/7 technical support. Only Pro users receive premium services like dedicated hosting and dedicated pre-launch technical advisors.
In addition to these plans, Adobe offers Managed Services for Adobe Commerce Cloud Pro users. That unlocks access to application-level SLAs, dedicated customer success engineers, and software upgrades and development assistance.
Here’s a breakdown of the costs of building a store with Adobe Commerce Cloud.
|Expense||Minimum cost||Average cost|
|Adobe Commerce Cloud license||$45,000||$200,000|
|Managed Magento hosting (1 year)||$0||$0|
|Magento extensions (2)||$1,500||$5,000|
|Marketing, PPC, and SEO (1st month)||$3,000||$10,000|
|Total upfront cost||$50,520||$236,200|
Adobe provides quotes for the cloud-hosted version on a case-by-case basis. However, you should expect to spend at least $50,000 when building a store with Adobe Commerce Cloud.
Summary: Magento pricing depends on your needs
We’ve explained the factors that influence the costs of Magento and shared different Magento pricing plans to help you estimate initial startup expenses. Here’s a quick recap of the minimum upfront costs for each Magento plan:
- Magento 2 and managed hosting: $1,500+.
- Adobe Commerce: $40,000+.
- Adobe Commerce Cloud: $50,000+.
It’s worth remembering that these are rough estimates. The exact numbers may vary based on your business goals and needs.
The best way to keep your costs low is to use a managed Magento hosting provider like Nexcess. That simplifies installing, optimizing, and securing Magento, and allows you to focus on growing your business.
Ready to build your store with Nexcess? Browse our Magento hosting plans to get started today.