What is total cost of ownership (TCO)?

Total cost of ownership is the sum of all the costs of buying an asset or service and using it over its service life.

The concept’s two official definitions are close to each other. The supplying manual of the US Postal Service counts the total cost arising over an item’s service life with the items of development, acquisition, operation, maintenance, support and disposal. BDC, Canada’s state development bank, calls it the total cost of buying and using an asset over its lifetime. What the two have in common is that the purchase price is only one part of the cost.

What does total cost of ownership include for a website?

Everything that comes after setup: theme, plugin and page builder licenses, hosting and the domain name, security updates and backups, speed and accessibility fixes, content updates and, if the site is short-lived, a rebuild. The setup invoice is only the first of these items; comparing two quotes on setup price alone hides that one of them may need a second setup three years later.

• One-off: design, content entry, launch
• Annual: licenses, hosting, domain name
• Ongoing: security updates, backups, monitoring
• Periodic: speed and accessibility fixes, content updates
• Possible: a rebuild when the site reaches the end of its life

Why is the calculation done by item, not by amount?

Because the amount varies by company, scope and exchange rate; the items do not. Putting two quotes side by side with the same list of items shows what each includes and what it leaves for later. The cost has another side too: the unmeasured loss of a cheap site, buyers who leave without submitting the quote form. This loss is calculated on gross profit, not revenue.

Does a buyer assess a supplier by total cost?

It is no coincidence that the concept comes from procurement: one of the definitions is in a supplying manual. The same logic applies on the purchasing side; next to the unit price, information affecting the buyer’s total cost gains weight. On a manufacturer’s site, this means stating clearly the minimum order quantity, the lead time range, a measurable quality commitment and the certificates' expiry dates. How to write them is covered in the factory and capacity page guide.

The three-year table of items and the lost inquiry formula are in the true cost of a cheap website guide; the factors that determine price are in the what determines a website’s price guide.

For a site that shows your certificates as a record buyers can verify, B2B website builds and measures the certificate page, the product scope and the path to a quote together.