You likely didn’t get into the retail business to have a list of operational expenses as long as your arm. But to open a store and connect with customers, you’ll need a solid tool stack and team—and that comes at a cost. 

Whether it’s utilities, licenses, salaries, or insurance, financial management is an important part of operating a profitable business. Only when you know how much it costs to keep the lights on can you set realistic revenue targets.

Unsure where to start, or keen to know whether you’re paying over the odds for your outgoings? This guide shares the most common retail monthly store expenses and the average cost of each.

Commerce platforms 

Commerce platforms include software for operating your business. They power your online store and assist with retail tasks such as inventory management, marketing, payment processing, and customer management.

Retail businesses with a physical and digital presence need two core systems: an ecommerce platform to sell online and a POS system to process in-store transactions. But things get expensive (and complex) when you have separate systems to manage both aspects of your business. 

Shopify natively integrates both under a single subscription, allowing you to manage your entire business from one dashboard. This unified strategy gives a single source of truth for all product, order, and customer data, removing complex and fragmented third-party integrations and lowering operational costs.

The benefits of this approach are proven. According to a recent POS Market report, retailers using Shopify POS:

• Save 22% on total cost of ownership (TCO) by removing expensive integrations and reducing maintenance costs.
• Save 10+ hours on inventory management and 5+ hours on data reconciliation every month.
• Experience up to a 150% increase in omnichannel gross merchandise value. 

Apps

Apps give your commerce system extra functionality. This makes the platform customizable—you can scale up (or down) as you grow, without the need to migrate platforms or find another vendor that offers every feature as standard.

The Shopify App Store is home to over 8,000 apps, many of which integrate with the POS system to give extra functionality to your setup. For example, you could:

Exactly how much you’ll pay for each app depends on the vendor and their pricing tiers. Consider starting with a monthly app budget of $50 to $200, and take advantage of free trials before committing to a particular tool. 

Business insurance

Retailers need a basic insurance package to protect against costly accidents, lawsuits, and property damage. Even a standard accident like a slip-and-fall in your store can cost thousands in medical bills and legal fees.

Insurance provider Insureon shares a general breakdown of how much you can expect to pay for each policy:

• $95 per month for a business owner’s policy, which covers customer injuries and damage to commercial property.
• $86 per month for worker’s compensation insurance, which covers medical expenses for retail staff who are injured on the job. 
• $42 per month for general liability insurance, which covers legal fees related to injuries that happen in-store and damage to a client’s property.

There are other retail insurance policies you might need depending on the type of business you’re operating. For example, you might need cyber insurance—around $57 per month—to protect against data breaches if you sell online. You might also need specialist insurance like commercial auto (for delivery operations) or liquor liability (if you sell alcohol), which can range between $28 and $171 per month.

Rent

Rent tends to be the highest fixed cost for any retailer. In 2024, the average rent for mall spaces was around$33 per square foot, yet there are extra retail store costs to be aware of with this location—such as common area maintenance, security, and marketing fees. 

General retail spaces like standalone stores or strip mall locations cost about $25 per square foot. These commercial spaces might have less natural foot traffic than malls, but they often give you more control over your space and lower overall fixed costs.

Don’t have this much to spend on a fixed location? Opt for alternatives, such as pop-up shops or shared retail spaces. These don’t have a fixed monthly cost. You can scale up and down as needed while building in-person customer connections. 

Maintenance

Your sales volume and customer experience depend on how well your store is maintained. Equipment failures, like broken AC units or damaged flooring, can also increase accident risks. 

There are two ways to approach maintenance:

• Do it yourself. Task your retail staff with basic cleaning duties, such as floor cleaning, dusting, and restroom maintenance. Bake these into your opening and closing procedures to keep your store clean.
• Outsource it. Specialist contractors can service HVAC units, run electrical checks, and correct any plumbing outages. Don’t just save these services for when you need them—unplanned equipment downtime can cost you thousands of dollars per hour in sales, making preventive maintenance crucial. 

Setting aside 1% to 2% of your store’s annual revenue for unexpected repairs and ongoing maintenance is wise. You’ll have a pot to dip into whenever you need it.

Taxes and licenses 

Running a retail store requires various licenses, permits, and ongoingtax obligations. 

A basic business license permits you to operate within a certain jurisdiction. The typical cost is between $15 to $300 annually, depending on your state and type of business. Specialist retailers—such as food businesses or alcohol manufacturers—may need additional licenses.

Plus, depending on where you have nexus (a physical presence), you may need to apply for a sales tax permit and collect sales tax on eligible products. Rates vary from 2.9% to over 7.25% at the state level. Local jurisdictions may add their own taxes, pushing total rates above 10% in some areas. 

💡Tip: Shopify Tax lets you manage these different jurisdictions to remain compliant, collect the appropriate taxes, and file them with each state from your Shopify admin. 

Inventory

Inventory management has long been a costly challenge for retailers. Aside from the obvious expense of buying stock to later resell, there are additional monthly expenses to consider when budgeting inventory costs: 

• Warehouse and storage costs, which average $8.31 per square foot. If you’re looking to scale, consider third-party logistics providers (3PLs) who can store and fulfill orders on your behalf. Costs range between 20¢ to $5 per item.
• Raw materials for manufacturing. Initial inventory costs vary by industry and are sometimes subject to seasonal fluctuations. For example, agricultural ingredients often cost more during the off-season. Plan to purchase around these cycles when possible. Consider finding your optimal order quantity that balances bulk discounts against storage costs.
• Finished goods for resale. For every dollar retailers earn, they have around $1.37 in inventory in stock. Keeping a tab on your inventory costs would help you avoid costly mistakes. 
• Packaging materials cost about 10% of the product’s retail price and vary depending on sales volume, product fragility, and shipping methods. Sustainable packaging may cost more initially but can save money in the long term—around 50% of consumers are willing to pay more for sustainable packaging.

Utilities

Utility costs include electricity, natural gas, water and sewer charges, power, and waste management. Most landlords don’t include these bills in their monthly rent, making them an additional expense for retailers. 

Electricity costs for small business owners typically range from $500 to $2,000 monthly. However, utility costs are notoriously hard to estimate. Your bill will depend on factors like your store’s square footage, location, local utility rates, hours of operation, and the type and age of your equipment. A store open seven days a week will naturally have higher utility costs than one open during the weekend. 

If you find that your store’s operating expenses are too high, there are several techniques to cut costs associated with utilities:

• Drop the thermostat down by a few degrees.
• Opt for energy-efficient lighting and HVAC systems.
• Reduce your operational hours to only stay open when foot traffic is guaranteed.
• Turn off lighting when the area is not in use, such as fitting rooms or stockrooms. 

Marketing and advertising

Marketing and advertising spread the word about your store. It’s difficult to estimate how much either cost—you might spend more during peak shopping events (such as Black Friday) and less when you build a loyal customer base. 

Our data shows businesses spend between 7% and 10% of their revenue on marketing. However, there was a unique correlation between a business’s size and how much it spent: the less money it made, the more it spent on marketing strategy. The inverse was true, too.

There are ways to bring this expense down and advertise for free:

• Start an email newsletter to share new products, promotions, or customer stories with subscribers.
• Find the social media channels your audience is active on and craft a content strategy to build an audience.
• Start a word-of-mouth program that incentivizes existing customers to share your products with a friend. You’ll only pay out a commission when the new customer makes a sale. 
• Write press releases to share exciting store news and send them to journalists at local publications.
• Create a branded hashtag to encourage customers to share photos and videos of your products, which you can repurpose on social media.

Internet and phone

Internet and phone service are lifelines for any store. You’ll need a strong, reliable WiFi service to power your POS system and offer free internet connectivity to customers in-store. Depending on your provider and any introductory discounts, this can cost around $35 to $60 per month.

Phone service also gives customers a way to contact you before they visit—whether to check a product’s availability or get directions to your store. According to one provider, small businesses can expect to pay between $20 and $30 monthly for basic internet-powered phone lines. 

For either option, consider bulk pricing for multiple lines, consolidating accounts under one contract, and opting for annual billing to cut costs.

Salaries

Staffing costs are one of the biggest monthly expenses for retailers, accounting for around 15% to 25% of your total revenue. Yet it’s a valuable investment—growing your headcount allows you to serve more customers, keep your store safe, and generate more sales.

According to the job site Indeed, here’s what you can expect to pay for common retail positions:

Maximize your labor budget by aligning your staff rotas with demand. If Tuesdays are your slowest day of the week, perhaps you don’t need your full team in-store. Save them for the weekend—when foot traffic is at its peak—to ensure you’re not paying for labor when you’re not making revenue. 

💡Take advantage: Shopify POS has been shown to reduce staff training and onboarding costs by 21% per store through its intuitive interface and built-in training tools. 

Spend less and earn more with Shopify

Managing your retail store monthly expenses is about finding strategic ways to reduce operational costs—whether that’s keeping better track of inventory or making it easier for your staff to do their jobs.

Shopify lets you manage every aspect of retail operations under one roof, from opening a retail store to managing multiple locations. Less middleware, lower total cost of ownership, and increased operational efficiency—you can get it all with Shopify’s unified commerce solution.