Aspiring entrepreneurs who want to capitalise on the hot trend of application development for their e-commerce businesses are largely unaware of the costs involved in building an app.

Unfortunately, there is no easy way to put a simple and straightforward price tag on building an application for your particular needs.

The pricing involved with constructing an app is highly dependent on a number of factors, with three of those factors making up the bulk of the price tag at the end of the building process.

The three primary factors that comprise the total cost of an app are the following: the number of platforms you desire, your design requirements, and the complexity involved in the app designing process to architect your project to your exact standards.

While I will provide an in-depth explanation of the many factors involved in the app development costs for e-commerce businesses, I’ll first address the answer that you seek with a burning desire.

How much is the average cost of developing an app for e-commerce? The answer is that the average cost to make an e-commerce app is anywhere from $200,000 - $1,000,000, with the specific price reliant on the type of app you want, the features you desire, and if you’d like to incorporate social media features for users.

Before you keel over into a comatose state of eternal shock at the figures mentioned above, relax and read on to learn more about the vast array of apps available, along with the many additions that can constitute an enormous price tag.

Armed with extensive knowledge about the app building procedure and development process, you can forge your way through the process to devise a cost-effective, investment-worthy app for your e-commerce site that not only helps to grow your business but doesn't break the bank in the process.

E-commerce apps are distinct from other types of apps in plenty of ways. For example, an e-commerce app typically includes transactional elements to enable visitors to purchase goods and services from your e-commerce site.

The costs of an e-commerce app have a huge range of components that can add to or reduce the price. Examples of the most important components that have a significant bearing on pricing include the following:

• Your platform types
• The features you need (e.g. Transactional capabilities)
• The features you want (e.g. back-end servers)
• The total level of complexity involved in the features you need and want

Based on the above information, consider the following:

• Apps integrated with back-end servers will inevitably cost much more than an app without one
• Apps integrated with APIS can also cost much more than one that is standalone
• Simple apps featuring a single platform and basic elements can be had for a much lower price of roughly $25,000
• The most complex apps can cost upwards of six figures and often go over a million dollar
• The cost of your app can also vary immensely on who is constructing it - in-house personnel, offshore services, or higher-end agencies specialising in app creation

Factors to Consider When Pricing App Development Costs

It’s a no-brainer when it comes to instantly realising that there are many differences and potential problems that can arise from the person or agency you choose to design your e-commerce app.

Using an in-house employee might result in an unspectacular app that is of little use. Employing an offshore company can often likely come with plenty of language barriers that may result in an app that you did not anticipate and are ultimately happy with.

Hiring renowned high-end app designing agencies can be financially burdensome to the point of being entirely inaccessible for some e-commerce businesses.

Even hiring a freelancer can come with its own set of problems as you are basically entrusting the individual to have the level of skill, competency, and expertise to provide the results you want.

The bottom line thus far: The design elements you want and need, the type of app designer you hire, and deciding how basic or how fancy you want your app to be will dictate the price you pay for your app and can mean the difference between a reasonable sum or an exorbitant amount that will take a toll on your company.

It’s been said the smartest and most successful venture capitalists of today's modern times hold the belief that accumulating the necessary amounts of capital to embark on a new venture (such as the building of a great app) should be among the top priorities for any aspiring business.

It’s important to note that legions of startup companies today have wholly embraced the concept and importance of building apps. These sites tend to be “either exclusively or heavily app-focused.

Many of these companies are just starting out and barely have a presence in the e-commerce world. However, they have recognised the importance and necessity of apps on their e-commerce sites and have thus devoted substantial time, money, and resources into the design and implementation of in-site apps.

As a result, they have thus begun the process of distinguishing themselves from the competition.

What else goes into the cost of an E-commerce app?

Quite a bit, actually. E-commerce apps include features such as login capabilities for customers and guests (also known as a user authentication process), social networking features, requisite integration with inventory systems and various forms of payment processing.

Each of the components listed above will add to the total cost of the finished app. Companies looking to save money can pick and choose the most important app elements needed for their business and add additional components later on when the budget allows for it.

Further, many app designers and companies will offer bundled deals for e-commerce businesses that incorporate all of the most popular and essential app elements at a reduced price.

A great example to consider is the famed Internet entrepreneur, angel investor, and author Jason Calacanis’ recent analysis of the cost of an app for e-commerce businesses. Recently, he stated that it is his professional opinion that the total capital needed to be raised by businesses for building an app is $750,000.

However, that amount does not necessarily reflect how much an e-commerce app has to cost, even though man apps cost far more than that.

Calacanis breaks down the $750,000 total figure in the following way:

• $120,000 of the total amount is appropriate for the operational capital needed for accounting, legal, and other comparable fees

• The remaining $630,000 is partitioned into the following:

• $35,000 per month for a collective team of four personnel, which is an estimate of what a standard team size would be to build an app
• Calacanis also states that building a basic v1.0 app can take anywhere from the four to six-month range
• Thus, the monthly expense of $35,000 multiplied by the number of months needed to complete the app will cost between $140,000 and $210,000
• The math is as follows: $35,000 x 4 months = $120,000 while $35,000 x 6 months = $210,000

Conclusion

The e-commerce industry has skyrocketed at a lightning-fast pace, keeping in tune with the rapid changes and improvements in technology.

It is imperative for businesses in today's modern world to stay abreast of the latest technological advances and trends, such as e-commerce business apps that are impressively capable of providing a wide range of perks and benefits.

As a business owner in an online world, as well as a saturated market, you must decisively invest the time, energy, and resources into procuring app(s) to arm your company with the potential to attract more customers, improve business practices to result in markedly improved success, and to ultimately keep up or even outpace the competition.