One of the first decisions you need to make when selling products online is what ecommerce software platform you’re going to use.
This is an important decision that will have wide-reaching impact on not only your sales, but your business operations and marketing strategy. In choosing your ecommerce platform, one question that must be answered right away is what type of software deployment you will need – SaaS (software as a service) or hosted on your own server or cloud environment.
If you’ve just made the decision to build or rebuild your online store and you have more questions than answers about SaaS and hosted ecommerce platforms, we’re here to help. If you’re already down the road a bit and haven’t made this crucial decision yet, then we implore you to hit the pause button before you go any further and read our pros and cons for each option.
SaaS vs. Hosted Ecommerce
First, let’s go over the basic differences and similarities between SaaS and Hosted software.
SaaS
SaaS software “lives” on the software provider’s servers, allowing them to continually push out updates and new features as they are completed, with little to no action needed on your part to manage the updates. You pay a monthly or annual licensing, subscription, or service fee, and the software provider is responsible for uptime, speed, and performance. Just set up the design and initial configuration, keep your content and product database updated, then let it do its thing while you focus on marketing and running your business. SaaS software usually has a library of available design themes, plugins, extensions, add-ons, and integrations that can enhance its functionality, and toolkits may be provided to developers to create those enhancements. However, the software code is typically “closed” and not available for custom programming. While SaaS’s “look ma, no hands” management style certainly has its benefits, it can also create big headaches and limitations on your business.
Hosted
Hosted solutions, on the other hand, allow you to install the software on your own server or cloud environment and therefore both allow and require more hands-on management. When a new version of the software becomes available, you can choose whether to install it. Hosted solutions may be free or have a one-time purchase cost. The code is typically “open-source,” allowing developers to customize many, if not all, aspects of the solution. You are not bound by themes and a limited plugin library, though an extensive amount of these will likely be available to choose from thanks to a thriving development community. Choices must be made wisely, however, as there is typically not much regulation of this development, and tools may fall out of date or not be compatible with future version releases. Hosted solutions allow you to tailor your solution exactly to your needs, but you will also shoulder more of the burden of keeping up with new technology advancements. And when something goes wrong, you are your own front-line tech support.
What Type of Ecommerce Software Is Best for My Store?
Small & Simple Ecommerce Stores
For a small ecommerce shop with a limited inventory, straightforward buying process, and minimal business integration needs, WooCommerce is our most common recommendation. As a WordPress plugin, the integration process is simple, as is managing your content and products. WooCommerce offers a large number of free themes that fit into WordPress seamlessly and are more unique than most ecommerce-for-WordPress competitors. WooCommerce has a strong support community to fallback on if you want to try to fix a problem yourself, and there is an extensive plugin library to leverage. Some of these tools may have small one-time or monthly fees, and you are still responsible for hosting and development costs, but the overall cost of building and managing a WooCommerce store is very low.
Medium & Non-Standard Ecommerce Stores
If you are operating a somewhat larger store with a sizeable number of SKUs or some non-standard buying or business processes, then a hosted solution like Open Cart may be the route to go. Open Cart offers even more programming flexibility than WooCommerce, plus room to grow. Open Cart offers a lot of user friendly options and good support and resources from a helpful development community. Open Cart stores take more hands-on work than WooCommerce or SaaS platforms, but even with development and hosting costs the price tag should still come in a good bit lower than its SaaS competitors.
Large & Complex Ecommerce Stores
A large online store doing thousands of dollars of business already and only looking to grow larger needs a solution that can do some real heavy lifting. These stores often have major back-end ERP, CRM, and accounting solutions to integrate, as well as a full marketing plan to support. For these sites, we recommend using one of three major ecommerce platforms: BigCommerce, Shopify, or Magento. BigCommerce and Shopify are SaaS solutions, and Magento offers both SaaS and Hosted versions of its platform. We will look at some pros and cons for each.
Pros
No transaction fees. Save money and choose your own gateway to integrate with existing systems without penalty.
Ease of use. Lots of tutorials available to guide you
Unlimited scalability. Grow your company to your heart’s desire.
Guaranteed PCI compliance.
Great support. No hosting or support headaches here.
Schedule discounts without complex coding or additional apps.
BigCommerce handles the largest, most complex catalogs.
Cons
Some of the advertised features are only available to users in the United States
Small selection of free themes
You must upgrade to a more expensive plan if you surpass the annual sales threshold associated with the plan that you are on in any given year
Pros
Ease of use.
Beautiful, mobile-friendly designs
Strong Market Presence and brand
SaaS benefits such as PCI compliance, security and 99.97% uptime
Cons
BigCommerce handles the largest, most complex catalogs.
Heavy push for Shopify everything (POS, payments, shipping, etc..)
Organized using Collections which auto-populate based on conditions such as product type, vendor, tags, price, etc. Not optimal for larger catalogs with multi-level category structure.
Updating a 25,000 product catalog could take 4+ hours on Shopify, or 2 hours on Shopify Plus as opposed to 1 minute on BigCommerce.
Pros
Flexibility is the biggest plus point of Magento. The community version is completely open-source.
Large community of users to help with support.
Scalability. Start small, but dream big. With Magento you can open your ecommerce business and let it grow as large as it can without having to switch platforms.
Cons
Cost. The community version of Magento is free, but its starting feature set is quite sparse. Getting your store set up like you need is going to cost you, whether you build it yourself using the free community software or go with the SaaS option and pay the licensing fees.
Below-average product support. Support is very expensive and tough to find. The community edition has been around for so long, there is a huge amount of outdated information to sift through to find correct answers.
Final Thoughts
In the end, the decision is best made by the business itself under the guidance of a qualified and experienced ecommerce software administrator. Given the pros and cons we’ve listed above, which platform do you think would be the best for your business? Why would you make that decision? If you have any other questions about the benefits of any of the platforms give us a call and we’ll walk you through them and get you started on the right track.
