Advertorial: How to select an eCommerce platform for your medium-sized business
The selection of an eCommerce platform is a very important decision that will affect your business for several years.
Many medium-sized businesses only consider the features and price, but while these two things are very important, other factors should also be taken into account. We’ll take a look at all these facets in this article.
But first, for the purpose of this article, we’ll define a medium-sized business as one that:
- Turns over $1-20 million per year
- Processes 50-500 online transactions per day
- Often works in multiple geo markets
- Proven platforms that match your business size
There are hundreds if not thousands of eCommerce platforms available and new players appear every year. In this article we’ll review market leaders, eCommerce platforms that have been around for some time and have acquired a significant number of clients.
A single platform can rarely match different business sizes. Medium-sized businesses typically have more complex requirements than small stores: from out-of-the-box functionality to flexibility of customisation to integrations with other IT systems. They also need a more robust platform that can handle a significant number of transactions and complex product catalogue.
While medium-sized merchants can afford better and more expensive solutions than cash-constrained small businesses, businesses turning over $10 million per year can’t afford to operate very expensive tier, 1 enterprise platforms. And they probably don’t need all the functionality, capacity and other bells & whistles they include.
Hence we are excluding:
- Popular small business solutions: WooCommerce, Wix, BigCommerce, Opencart
- Big enterprise platforms: SAP Hybris, Demandware, Intershop and Oracle
The two eCommerce platforms we have short-listed as the best fit for medium business are:
- Magento eCommerce
- Shopify Plus
The image below provides a snapshot comparison of Magento and Shopify. The most important thing to note is that Shopify Plus doesn’t charge a transaction fee. Keep reading to take a closer look at each platform.
Magento is an open-source eCommerce platform started in 2008. The Community Edition is free to download, while the Enterprise Edition is paid. Over 200,000 websites turning over a combined value of $100 billion and serving 51 million shoppers used the platform in 2016. Even the free Community Edition of Magento is packed with significantly more out-of-the-box features than Shopify Plus.
Shopify is a cloud (SaaS) platform, while Shopify Plus targets bigger businesses. According to official statistics, Shopify products in 2016 powered 377,500 merchants with a combined revenue of $15.3 billion, which served 100 million customers. Shopify’s admin interface is often considered easier to use.
Having an extensive ecosystem is a big advantage of choosing a more popular eCommerce platform. Implementation partners, developers, extensions/apps are all very important in running an online store.
The fewer individual developers and agencies for each platform, the more limited the choice of vendors for merchants, and the higher the price. Fewer extensions also increase the probability of having to develop a custom solution, which drives up cost.
Both Magento and Shopify Plus have extensive ecosystems with thousands of developers, apps and implementation partners, but as shown in the image above, Magento wins on all fronts, with more extensions, developers and agencies available.
SaaS, Open source and PaaS
SaaS or “Cloud”
SaaS (software as a service), often referred as cloud, is when a user (or merchant, in our case) rents rather than buys an application. The application is hosted on the vendor’s premises (in the cloud) and the merchant has the right to use it for monthly, quarterly, or annual fee.
This type of deployment means merchants don’t have to worry about purchasing and maintaining their own infrastructure or updating their application. In general, there is less need for technical resources.
However there are some downsides to SaaS platforms:
- Lower level of flexibility. SaaS systems are totally or mostly closed source. At best you’ll have access to APIs, templates and a very limited part of back-end code. If you need certain functionality and it isn’t possible to develop it with a limited customisation toolkit, you will have to wait until the vendor decides that it is important enough to build
- Higher level of lock-in: As a subscriber, you are locked in. You can move out, but you have to move out of everything (hosting and platform). If a SaaS vendor decides to raise the price (this happened with one popular platform), or significantly change the course of the platform, it isn’t easy to get out.
- Higher business risk. SaaS vendors may be acquired, merged or just decide to cease the operations. In this best case scenario, you’ll have some time to migrate to another platform. In the worst case, you may need to find an alternative right away.
Open-source solutions provide the ultimate level of flexibility. You have full access to system source code, so you can change the functionality any way you like. It’s more like owning than renting.
Open-source solutions are typically self-hosted, so the infrastructure has to be organised and maintained. They also tend to be more expensive to build and support.
Self-hosted solutions, however, have a lower risk of being discontinued (your website continues to work) and the vendor lock-in is less strict (you can change hosting providers comparatively easily).
PaaS stands for “Platform as a Service” and is a compromise between open-source and cloud solutions. The infrastructure is supported by the vendor, but the merchant still has full access to the source code, so they have same level of flexibility. However, with PaaS, merchants are responsible for system updates.
Shopify Plus or Magento?
Shopify Plus is a SaaS-only solution hosted by the vendor with limited access to the code.
Shopify Plus may be a better choice if your current and mid-term business requirements are not complex and can be met with existing platform functionality. The platform is simpler to deploy and requires less technical resources to maintain.
Magento offers two methods of deployment:
- Self-hosted (Magento Community and Magento Enterprise)
- PaaS (Magento Enterprise Cloud Edition)
There is also a SaaS solution on Magento core called Zoey.
Magento will be a winner if you want to build an online store that has a competitive edge. Ultimately, the open-source flexibility can be combined with deployment to cloud infrastructure, such as Amazon Web Services, for a robust and scalable solution.
References to additional information
- Magento and Shopify detailed features comparison
- Magento Enterprise pricing
- Magento Enterprise Cloud Edition
About the author and Magenable
Alex Levashov is the managing director of Magenable, a Melbourne-based eCommerce consultancy that helps mid-size businesses improve their eCommerce presence. Magenable provides both consulting (business, UX, technical including AWS deployment) and implementation services, with focus on Magento as a platform.