Finding the Best eCommerce Platform to Grow Your Business
- SaaS / PaaS /
- Technology /
If your business is launching a new eCommerce offering or considering replatforming from an existing solution, the number of options in the marketplace can be overwhelming. Which solution offers an affordable point of entry while providing long-term flexibility for growth? How do you balance the needs of your marketing department with the eCommerce requirements? In this article we will walk you through the three best options when considering an eCommerce solution, in particular when combining it with content management (CMS) functionality.
Depending on the stage of your business, here are some criteria to assist in evaluating possible solutions:
- What’s your available budget? The range of total cost of ownership (TCO) for popular eCommerce solutions can range from $10,000 to $500,000 for the first year.
- Implementation level of effort: How much design and development effort is required to launch a solution? Do you have a team to do the work? How much will it be to maintain the solution?
- Ease of use: How efficiently can your team manage the content and transactions on the platform?
- Licensing and transaction cost: Based on your gross merchandise value, which pricing model makes the most sense?
- Integration possibilities: Does the solution integrate with other software in your business, such as Salesforce or NetSuite? Is it popular enough to be supported by iPaaS (Integration Platform As A Service) products?
3 Approaches for eCommerce Solutions
When looking at different combinations of content management systems and eCommerce solutions, we find that the combinations fall primarily into three categories:
- Self-hosted CMS and eCommerce solutions
- Managed CMS / eCommerce SaaS platforms
- Self-hosted CMS solution combined with a managed eCommerce SaaS platform
First, determine the optimal high-level approach needed for your business and then select an option within each combination category. By evaluating the pricing structure, features, and implementation efforts needed you can decide the option within each category that would be the best fit for your firm. Let’s dive deeper into each combination:
1. Self-hosted eCommerce and CMS solutions
This is historically the most common setup: build your own eCommerce solution or license one. Layer it on top of a CMS, run it in parallel, or in lieu of a CMS. Then, find a hosting provider and manage it yourself.
Consider this option if:
- You have an internal team that can manage and maintain the application, including regular patches and being on-call as needed.
- You process a high volume of transactions through eCommerce, so the cost of maintaining your own solution is lower than licensing a managed solution.
- Your product offering or content requires a highly customized experience that cannot be reasonably implemented using off-the-shelf or managed solutions.
There are many factors that drive pricing for these solutions:
- Licensing cost: Home-built and open source eCommerce and CMS solutions won’t have a licensing cost, but commercial solutions will. Transaction fees typically only exist for credit card processing, not as part of any licensing.
- Resource needs: The resource requirements for implementing, customizing, maintaining and keeping a self-hosted solution secure should not be underestimated; particularly if customer and payment data is processed and/or stored within the solution.
- Hosting costs: Inexpensive WordPress hosting can be found for under $10/month. For business-critical applications we most often recommend premium hosting plans that start at $100/month. We always recommend using a fully managed hosting service, such as Pantheon (who we use for this website).
Depending on the route you chose, this can vary significantly. Standing up a WordPress+WooCommerce installation while using a pre-existing theme with minimal customization can be completed in as little as a week. Launching a Magento Open Source solution typically requires more effort due to the plethora of customization options. A completely home-built solution can take 6-12 months to design and implement.
- Complete control over the design and functionality of the solution. Don’t like the way something works? Just write the code to change it. These solutions can be heavily customized to fit a myriad of business needs.
- Self-hosting an open source solution to avoid licensing costs can be appealing, particularly for businesses with Gross Merchandise Value (GMV) exceeding $1,000,000. Consider running projections to estimate your Total Cost of Ownership (TCO) for the next five years.
- The risk and liability for hacks and data breaches reside with your business. Keep in mind that SaaS companies have entire specialized teams dedicated to nothing but the security of their solution. Can your team match that? Likely not. Having a managed hosting provider that specializes in your specific platform of choice can offset some of the risks by providing automatic server patching.
- The ability to customize the codebase is both a pro and a con. It opens up the door to introducing bugs and issues that likely wouldn’t exist in a fully tested off-the-shelf solution.
2. Managed eCommerce / CMS SaaS platforms
With the rise in popularity of SaaS platforms, the market has exploded with Commerce-as-a-Service (CaaS) companies. These services provide the software, hosting, and management of your eCommerce website. CaaS will typically also include a very basic CMS to implement simple content pages and the shopping section of the website.
Consider this option if:
- You don’t have the internal capabilities to manage a self-hosted application.
- You are looking to de-risk your business.
- You are starting up your eCommerce practice and need a low-cost, low-effort entry point (Shopify and BigCommerce).
- Your product offering and website content fits well into the structure of these platforms.
As is typical with SaaS companies, their pricing is usually straightforward and bundles hosting and licensing. For eCommerce platforms, the additional factor is the per-transaction cost, which usually includes the credit card transaction fees. The monthly platform fee starts as low as $30 for Shopify and BigCommerce, making these platforms particularly enticing for small businesses that want to minimize their upfront investment. At the same time, up-market solutions, such as Magento Commerce and Salesforce Commerce Cloud start at $22,000 per year, providing a wide range of options to businesses of different sizes.
Using an existing Commerce-as-a-Service platform is customarily the most expedient path to launch an eCommerce website. The CMS and eCommerce functionality is ready out-of-the-box. Implementation efforts are primarily focused on site configuration, theme customization, and third-party system integration.
- The more popular platforms have healthy marketplaces for extensions that provide additional functionality and integrations (such as Salesforce and Netsuite). iPaaS (Integration-Platform-as-a-Service) services support many of the popular eCommerce platforms as well, opening up broad possibilities for code-free integration.
- Most platforms provide APIs to build custom integrations into your own systems and data stores.
- Credit card processing rates for some eCommerce platforms are advertised as low as 2.2%, which is lower than the 2.9% rate common for payment solutions such as Braintree and Stripe.
- While the development effort for third-party integrations can be reduced through extensions available in the marketplace, the dependency on third-party extensions can add ongoing licensing costs.
- Customization options are limited to what the platform allows. For example, if your business requires a special product configurator, you will want to be confident this is supported out-of-the-box by a third party extension, or through some other means that you are confident in.
3. Managed eCommerce SaaS platform with a self-hosted CMS solution
If neither of the previous solutions offers you what you need, perhaps a combination of the two is more appealing.
Consider this option if:
- You value an experience-led website, but don’t want to take on the risk of managing transactions and customer data.
- Your product offering fits well into the structure of a managed eCommerce platform, but your website content requires a more flexible and powerful CMS.
- WordPress + BigCommerce plugin
- Any CMS on the primary domain with a shop on a subdomain
- Custom front-end with headless eCommerce SaaS platform
Combining a couple of different solutions can lead to a wider range of costs, but likely they will be higher than just using a single solution. In the example of WordPress + BigCommerce Plugin, there’s both the hosting cost for WordPress as well as the licensing cost for BigCommerce.
The level of implementation effort will vary contingent on the specific solution that is chosen. Using WordPress + BigCommerce Plugin will be comparable to standing up a WordPress + WooCommerce installation. But building a custom front-end to a headless eCommerce SaaS platform can require substantial design and development effort.
- This option combines functional aspects of both worlds: The flexibility to choose the CMS that best fits your requirements for your marketing, presentation and content management needs, while relying on a hosted and managed eCommerce solution to reduce your risk as a business.
- While the choice of CMS introduces a fair amount of flexibility, a managed eCommerce solution still comes with its own limitations, including reliance on third-party extensions and limited customization options.
- Placing the eCommerce shop on a separate subdomain from the primary website domain can cause a degraded user experience. The BigCommerce plugin for WordPress circumvents this issue by integrating with the CMS on the primary domain.
While the platform decision is unique to each business, there is one factor that we believe impacts everyone. In particular, the recent increase in data breaches should have anyone who handles customer and payment data concerned. We accordingly advise many of our clients to use a SaaS platform for eCommerce. This delegates the liability and security maintenance to a third party with dedicated security teams. These teams are exclusively assigned to protect the integrity of your data. We will only recommend a self-managed solution if our client has an internal team available to proactively monitor and manage the security of their systems. It is imperative that security patches are applied within 24 hours of them being released in order to preempt any new attack vectors.
The best eCommerce Platform for 2021
According to BuiltWith, these are the most common eCommerce solutions used among the top 1,000,000 websites globally:
WooCommerce certainly is riding a wave of popularity given that it is free and built on top of the extremely popular WordPress content management system. But given our concerns about cybersecurity and data breaches, our top recommendation goes to the combination of WordPress and BigCommerce. By leveraging BigCommerce’s WordPress plugin, we believe businesses receive the best of both worlds:
- Website architecture and content flexibility through WordPress
- eCommerce SaaS monitoring and security
- Seamless integration between a self-managed CMS and a managed eCommerce platform
Next steps to implement the right solution
Choosing the right eCommerce platforms for your business can be overwhelming. Fortunately, there are strong pros and cons for each solution that can help point you in the right direction. Look at each of the three overarching approaches to building an eCommerce offering with a CMS, and select one option from each of the three that matches your requirements and budget. Then evaluate them side-by-side to find the best fit for your business.