Brick and Mortar vs Online Cost Calculator

How to Use This Tool

Follow these steps to generate an accurate cost comparison between brick-and-mortar and online business models:

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1. Select your preferred currency from the dropdown menu at the top of the calculator.
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2. Enter common projections: total projected monthly orders, average order value for physical store sales, and average order value for online sales.
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3. Fill in all relevant brick-and-mortar cost fields: monthly rent, utilities, staff wages, storage costs, one-time setup expenses, marketing spend, and transaction fees.
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4. Fill in all relevant online store cost fields: monthly hosting/subscription fees, payment gateway fees, marketing spend, storage costs, one-time setup expenses, staff wages, and average shipping cost per order.
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5. Click the "Calculate Costs" button to generate a detailed breakdown of expenses, revenue, and profit for both models.
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6. Use the "Reset Form" button to clear all inputs and start a new calculation.
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7. Click "Copy Results to Clipboard" to save your comparison for records or sharing.
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Formula and Logic

The calculator uses standard small business operating cost formulas to compare both models:

Brick & Mortar Calculations

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• Monthly Fixed Costs = Rent + Utilities + Staff Wages + Storage Costs + Marketing Spend
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• Monthly Revenue = Projected Monthly Orders × Brick & Mortar Average Order Value
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• Transaction Costs = Monthly Revenue × (Transaction Fee % / 100)
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• Total Monthly Cost = Monthly Fixed Costs + Transaction Costs
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• Cost Per Order = Total Monthly Cost / Projected Monthly Orders
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• Monthly Profit = Monthly Revenue - Total Monthly Cost
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Online Store Calculations

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• Monthly Fixed Costs = Hosting/Subscription + Marketing Spend + Storage Costs + Staff Wages
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• Monthly Revenue = Projected Monthly Orders × Online Average Order Value
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• Variable Costs = (Monthly Revenue × (Payment Fee % / 100)) + (Projected Monthly Orders × Shipping Cost Per Order)
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• Total Monthly Cost = Monthly Fixed Costs + Variable Costs
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• Cost Per Order = Total Monthly Cost / Projected Monthly Orders
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• Monthly Profit = Monthly Revenue - Total Monthly Cost
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One-time setup costs are calculated separately and not included in monthly operating totals.

Practical Notes

When using this calculator for real-world business planning, keep these trade-specific considerations in mind:

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• Brick-and-mortar businesses often have higher fixed costs (rent, utilities) but lower shipping and payment processing fees compared to online stores.
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• Online stores typically have lower setup costs but higher variable costs (shipping, payment fees) that scale with order volume.
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• Average order value (AOV) is often higher for physical stores due to impulse purchases, while online AOV can be increased with upsell and cross-sell strategies.
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• Transaction fees for brick-and-mortar stores usually range from 1.5% to 3.5% for credit card processing, while online payment gateways like Stripe or PayPal charge 2.9% + $0.30 per transaction (entered as a percentage here for simplicity).
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• 3PL (third-party logistics) storage costs for online stores vary by volume: budget $0.50 to $2 per cubic foot per month for small to medium inventory.
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• Marketing costs for physical stores often focus on local SEO, flyers, and in-store promotions, while online marketing spend is typically allocated to social media ads, Google Ads, and email campaigns.
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Why This Tool Is Useful

Small business owners and entrepreneurs face a critical decision when launching a new venture: whether to open a physical storefront, sell online, or adopt a hybrid model. This calculator eliminates guesswork by:

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• Quantifying hard-to-track variable costs like transaction fees and shipping that scale with sales volume.
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• Highlighting hidden expenses (e.g., 3PL storage, in-store staff wages) that are often overlooked in early planning.
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• Providing a side-by-side profit comparison to help you align your business model with your budget and growth goals.
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• Allowing you to test multiple scenarios (e.g., higher order volume, increased AOV) to see how changes impact your bottom line.
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Frequently Asked Questions

What if I have a hybrid business with both physical and online sales?

Allocate shared costs (e.g., inventory, staff wages) proportionally between both models. For example, if 60% of your sales come from your physical store, assign 60% of inventory costs to the brick-and-mortar column and 40% to online.

How do I estimate transaction fees for my business?

Check your payment processor’s fee schedule: brick-and-mortar stores should use their credit card processing rate (e.g., 2.5% for a standard retail merchant account), while online stores should use their gateway’s percentage fee (e.g., 3% for Stripe).

Should I include inventory costs in this calculation?

This calculator focuses on operating and setup costs. If you want to include inventory, add your monthly inventory replenishment costs to the storage or marketing fields for each model, depending on how you track inventory expenses.

Additional Guidance

Use this calculator as a starting point for your business plan, but supplement results with local market research:

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• Check average commercial rent rates for your target neighborhood to validate your rent inputs.
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• Research industry benchmarks for your niche: e-commerce stores in apparel typically spend 15-25% of revenue on marketing, while brick-and-mortar retailers spend 5-10%.
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• Factor in seasonal fluctuations: if you expect 50% higher order volume in Q4, run a separate calculation with that order count to see how it impacts profitability.
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• Revisit this calculation every 6 months as your business scales: fixed costs like rent or hosting may change, and variable costs like shipping rates often increase annually.
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