Foundation · 2 min
What you need to know
What is ecommerce total cost of ownership?
Ecommerce TCO is the complete lifecycle cost of acquiring, implementing, operating, supporting, changing and eventually replacing an ecommerce solution.
How do I calculate ecommerce TCO?
Define a time period and operating scenario, estimate every lifecycle cost and risk, document assumptions, and update the model with actual results.
What costs should be included in ecommerce TCO?
Include licenses, apps, payments, implementation, migration, integrations, hosting, security, maintenance, labor, training, support, downtime and exit cost.
Why is platform subscription price not the total ecommerce cost?
Subscription price excludes much of the people, software, transaction, change, and operational work required to achieve the business outcome.
How should app costs be included in TCO?
Include subscriptions, usage charges, setup, integration, administration, training, data movement, overlap and removal or replacement work.
How should development costs be included?
Include discovery, design, build, testing, deployment, rework and future enhancement across employees, vendors and opportunity cost.
How should maintenance costs be included?
Estimate upgrades, defects, monitoring, security, provider changes, regression testing, support, and routine operational care across the lifecycle.
How should internal labor be included?
Use fully loaded time for administration, merchandising, support, finance, engineering and management, including recurring manual work.
How should downtime and operational inefficiency be considered?
Model expected lost contribution, recovery labor and repeated process waste using evidence and ranges rather than pretending uncertain costs are zero.
A quick store check
Build a three-year lifecycle cost model for the current platform with documented volume, labor, and risk assumptions.
Foundation · 2 min
Frequently asked questions
Is TCO a single precise number?
It is an evidence-based estimate with assumptions, ranges, and scenarios that should be updated with actuals.
Should revenue benefits be subtracted from TCO?
Keep cost and benefit models distinguishable, so assumptions remain auditable.