Magento has had a lasting impact on the e-commerce landscape like no other system. Thanks to a wide range of marketing functionalities, an open source code base and a boundless, active community, the system experienced rapid global distribution in its early years. Let’s discuss the factors behind determining Magento pricing and costs.
Licence costs of Magento Commerce V2
Magento Commerce offers the Starter Edition from 1.999 US$ per month and the Pro Edition from 3,399 US$. A scale of license costs for the old editions Enterprise and Enterprise Cloud can be viewed here to better estimate the costs:
Costs for customization (project costs)
The average cost of a Magento 2 project is about US$120,000. However, they can become more expensive. Magento is natively designed for B2C scenarios. Although B2B features are provided, they only cover basic functionalities. The development of other scenarios outside of B2C requires much higher project costs. For a large multi-brand setup, project costs can also reach into the single-digit million range.
An important factor for Magento 2 is performance. Without measures to increase performance, such as high performance coding, varnish caching and horizontal scaling, you will not be able to run a larger shop with the same performance.
Magento is a complex system. In almost every case you will have to hire an external service provider for an online shop. In addition to in-depth PHP knowledge, it is essential that the developers have several years of experience in Magento backend and frontend. On average, you should plan about 300 – 500 working hours for a simple online shop. For this you will be provided with the technical configuration, a template and payment methods. Deep adaptations should be estimated at 1,200 hours. This includes backend integration, e.g. PIM, ERP, content delivery networks or internationalisation.
The costs for a Magento agency can vary from 10 – 250 US$ per hour. Depending on where it is located and what experience it has.
Since prices vary greatly by country, it may be worthwhile to have some work done in cheaper countries.
Magento Agency costs
- USA, Canada approx. 80 to 150 US$ per hour
- Europe (Germany) approx. 70 to 120 US$ per hour
- Eastern Europe (Ukraine) approx. 20 to 40 US$ per hour
- India, Singapore approx. 10 to 30 US$ per hour
The estimation of Magento project costs depends on many criteria. Here is an attempt at an estimate based on the experience of some Magento agencies in the USA.
Simple Magento online shop: 20.000 to 42.000 US$
Usually the online shop has under 6,000 article numbers, an individual template, company branding in the shop as well as in e-mails, a point-of-sale integration and a payment interface. The product pages and categories are configured. Simple shipping options and taxes are also configured. The online shop was tested with standard processes. An internal QA took place and compatibility with different browsers, functionality and extensions was tested.
Customized Magento online shop: 42.000 to 100.000 US$
Usually the online shop has more than 6,000 article numbers. In addition to the services for the simple online shop, the following modules are also added: individualized page design and One Step Checkout, own product landing pages, multilingual websites, multiple pricing rules for different customer groups, address validation, reviews, improved search function (e.g. Auto Complete), CMS integration (e.g. via Typo3), social media integration, data migration, extended shipping options, back-end integration into accounting systems and CRM systems and extended SEO services.
Magento Online Shop Enterprise Level: 100.000 to 250.000 US$ and more
In addition to the previous services of the individualized online shop, there is an implementation for mobile commerce, multiple substores, full page caching, own modules, own marketplace, omnichannel integration, dynamic customer segmentation, automated promotions and merchandising as well as enterprise-level search functions such as ELASTIC or SOLR.
For our demo retailer we assume project costs of 82.000 US$, because he also needs some backend integration and has a customized frontend.
Furthermore, usually for software projects there are also annual costs in the context of BAU (business as usual). These are mainly IT personnel costs and/or man-days incurred with maintenance and support. Magento is more cost-intensive here, as the software causes high maintenance costs and every small change in the frontend can swallow up many man-days in the coding.
By now, you should know everything you need to know about Magento Community and Magento Enterprise (or Magento Open Source and Magento Commerce). Each of these two Magento pricing options has its pros and cons, and the best pricing plan for you largely depends upon the size of your company.
Idrees is the CEO at RLTSquare, a Magento Development Company. With 7+ years of experience in the eCommerce space, Idrees is well-versed in delivering Magento solutions by utilizing his team of Magento Certified Developers.