Costs of Building / Maintaining a Magento Store
Magento is an extremely popular ecommerce platform that powers some of the world’s biggest online stores, as well as sites at all levels. Magento’s technology is responsible for over 250,000 stores and is widely considered to be the biggest ecommerce platform in the world.
One of the issues that lots of merchants have with the Magento platform is the cost of developers and development agencies, which can often be very high, particularly if you’re looking for development resource in a big city. I’ve worked with lots of agencies over the last 7 or 8 years and have been asked about this a lot – so I thought I’d put together a blog pots sharing the average costs that I’ve encountered, working with agencies of all sizes from all over the world.
I’ve split the costs by location, focusing largely on the UK. I’ve tried to cover both salaries (I’ve also worked with lots of developers for agencies) and the hourly / daily rates for freelancers / contractors and, of course, agencies / systems integrators. My sample is 15-20 agencies from various different locations and the projects I’ve worked on range from ecommerce startups to some of the UK’s largest brands on the platform.
Hourly / daily rates for Magento development
So, to start with, let’s look at the average costs that I’ve encountered for Magento development agencies in the UK. I pulled together the average hourly rates and then based the figures on an working day of 7.5 hours, although some do operate on 7 hour days. The average hourly rate was £86, making the average day rate £646.
The average day rates were actually fairly consistent across the UK, as there are number of agencies based outside of London that charge £100 per hour and upwards.
From experience, I would say that a good Magento agency is going to be around £600 per day and an enterprise-level agency is probably going to be £700 per day and upwards. The difference between these two types of agencies generally comes down to experience, the level of merchants they work with and their project management and delivery.
Most of the freelance Magento developers I’ve worked with are around £50 – £60 per hour, depending on the level they’re working at. You can get freelance Magento developers for less than this, but they won’t have the same level of experience on larger projects and they probably won’t have worked in senior roles for larger agencies / merchants.
Contract rates for Magento developers tends to vary massively, ranging from £300 to £700 per day, depending on the client, the developer’s experience and how much they’re needed for the project. For example I’ve heard of Magento developers with specific experience of big sites on M2 commanding around £600 and £700 for Project Lead roles.
Magento project costs
Magento builds vary in price hugely, depending on the version you’re using, the integrations, complex back-end requirements, your in-house team / resource and various other factors. Obviously agency day rates and processes will also have a big impact on the price of a build.
One thing I would say here is that you do get what you pay for at most levels – there are different tiers of agencies, but issues do usually occur when you’re trying to cut too many costs. Things like project management and a very detailed project discovery are really important and these shouldn’t be areas where you try to cut costs.
Generally, I’ve found that basic websites with design and build would cost anywhere from £8k – £30k, depending on your requirements, the agency you choose (their processes, their design team, how the PM projects, where they’re based etc) and any additional requirements. More complex projects can vary massively depending on the requirements – things like bespoke integrations or more complex third party integrations will ramp the price up heavily. Also, any custom back-end requirements, things like internationalisation, complex data importing and anything else that requires a lot of development time will also have an impact on the price a lot.
I’ve worked with merchants who have spent anywhere from £10k to £1m’s on their Magento store and a lot of it can come down to the agency you work with.
Magento’s licensing fees
Magento recently changed the way they structure their licensing costs, moving from set per server costs to a percentage of online turnover. I’ve spoken with some merchants who are angry about this, but overall it’s not made a huge difference to most people I’ve worked with. Here are the figures that I’ve seen for the new Magento 2 Enterprise licensing costs:
Under $1M turnover – $22,000
$1M-$5M turnover – $32,000
$5M-$10M turnover – $49,000
$10M-$25M turnover – $75,000
Magento also now provide a cloud-based, hosted option, which costs a fair amount more but also eliminates existing hosting costs and the need for a dev ops / sys admin professional.
Magento is a really complex ecommerce platform that is capable of scaling to a very high level, which is why it comes with high costs. I’d say the most important thing is to get quotes from different service providers and make sure you have a very clear brief – as this will help to remove any contingency that’s added on. Speaking with multiple agencies is really important and I’d suggest setting a minimum requirement around the team, management etc and then trying to find agencies in different locations – as this can often not impact the project, but will reduce the cost significantly in places.
One thing I’d say around Magento costs, particularly with Community Edition, is that there are going to be a lot of additional costs that merchants don’t necessarily consider. For example, things like hosting / servers, required third party solutions (such as on site search or personalisation) etc can add up.
Overall though, I’d say at most levels Magento is still the best option – although Shopify Plus could be a big competitor for the mid-level market. If you have any questions around any of this, please feel free to get in touch.