Hosting option is a good one
Going with a hosting provider's tools is definitely acceptable for a small e-commerce site. Most will offer a business or e-commerce package. The prices will vary depending on whether you want credit card processing, e-mail newsletters, analytics, and so on.
You should map out not only what you need, but what you may need a year or two from now -- you don't want to have to switch hosting providers. Also, many of those tools are heavily templated, so you won't get much flexibility.
You can also look at hosted services such as Nexternal or Netsuite, among many others, that offer turnkey e-commerce solutions.