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March 22, 2021
Do you know that in 2021, 2.14 billion people will be considered digital buyers? This constitutes 27.2% of the world’s population, and represents a massive business potential. If you’re seeking to enter the ecommerce space, then one of the key decisions you’ll have to make is deciding whether to opt for an ecommerce SaaS solution or open source software.
In the following article, we’re going to discuss the pros and cons of each option as well as provide a short comparison of two popular solutions – Magento vs Shopify. Let’s dive right in.
SaaS ecommerce software is a ready-to-use, subscription-based solution that comes with a wide set of functionalities that don't require any installation. It includes hosting, backups, updates, and, usually, tech support. All your data is hosted in the cloud. The only thing that you need to run your E-store using a SaaS solution is a reliable Internet connection.
Let’s now take a look at the advantages and disadvantages of SaaS eCommerce solutions.
Soft learning curve. If you're new to the ecommerce space then opting for SaaS is a good choice as it's easy to learn. Most of the functionalities that you’ll require, at least initially, will be included in the platform. The UI and UX are friendly. You also get access to a knowledge base that features plenty of materials that will help you master the platform in no time, and if you run into problems then you can count on tech support.
Faster time to market. Since it’s a ready-made solution, and no product development is required, you’ll save a lot of time. All you have to do is choose your subscription package. This translates into a faster time to market.
Require less maintenance effort and are secure. Software updates and data backup is the responsibility of the platform provider, which means the maintenance on your side is minimal. They also have to ensure data security – in case of any data breach, they’ll be held accountable.
No system update costs. In the case of SaaS ecommerce solutions, you don’t have to worry about the costs associated with updating the system – it’s done by the operator.
More cost-effective over time. By selecting a SaaS platform you will be able to save on infrastructural costs you’d otherwise have if you fully maintained the ecommerce solution. In terms of costs, you’ll have to account for:
Easily scalable. SaaS solutions usually offer different subscription packages. You can start with the most basic option, and switch to a more advanced package as the number of your products, warehouse locations, etc., grows. Scaling your ecommerce store based on SaaS is easy.
Out-of-the-box integrations. SaaS solutions come with a set of integrations that will make running your E-stores simpler, for example CRM, inventory management, and marketing automation.
Few software customization options. Some of the SaaS platforms might have fewer customization options both in terms of features and themes. It’s due to the lack of access to the source code. However, other tools like Shopify, Bigcommerce, Shopware offer API’s based on which you can build specific solutions to meet your growing needs.
Transaction fees. Most SaaS platforms issue fees or collect commission from all of the transactions you finalize through their solution.
Complexity of the marketplace model. If you need complex customization, for instance, in the customer purchasing path, you might find more use in creating an open sourced or custom solution.
Limited integrations. The number of integrations available within each SaaS platform is limited to most popular ones. For more complexity you would need a Saas with an API and a tech team to integrate it. If you opt for more niche integrations that need to go really deep into the E-commerce engine, they might not be possible.
An open-sourced ecommerce platform is a type of software, which offers a free source code that can be used to create a custom solution. A good way of thinking of it is like a “starter pack” – you received the code and are granted the right to use and modify it according to your needs. Let’s take a closer look at the pros and cons of this solution.
No subscription fees on the basic plan. You aren’t dependent on a monthly subscription issued by a third-party (which helps protect you from costly plan upgrades or hidden costs). That being said, it doesn’t mean there are no expenditures – we discuss this topic further in this section.
More feature customization options. With access to the source code, you can modify and add features as you please. In the case of ready-made solutions, this is either entirely impossible or only technically attainable through an API-based extension.
Custom ecommerce design and layouts. Open-sourced platforms offer you the ability to create custom designs or app/website layouts.
Widespread community support. As many opensource ecommerce platforms are built and monitored in a collaborative manner by both their creators and users, you have access to a strong, supportive software development community. Namely, developers use the platform to contribute with ideas and free-to-use additions which you might find immensely helpful.
Full control. Overall, the biggest pro to open-sourced software is the flexibility it provides. If you’re looking to have a highly-customizable solution or have very specific needs, open-source will likely be the right direction for you. Bear in mind, however, that this comes at a cost – i.e., the need to maintain a team of developers and a server administrator who will manage and develop the ecommerce solution for your business.
Let’s now discuss a few potential cons you must be aware of before you decide on an open-sourced solution.
Steep learning curve. Opensource ecommerce platforms aren’t suitable for companies who lack tech expertise. Straight off, they require the engagement of a development team. It’s important to be aware that the more you modify the source code, the more unique your system will become. This could backfire if you don’t work with an experienced, dedicated development team who have the expertise and know-how.
Potentially, more work around API integrations. Unlike in the case of some SaaS ecommerce platforms, you won’t be able to benefit from one-click integrations. As your solution is unique, high chances are, your team will need to put in the time and effort to build your own.
Premium plan costs. As you grow, you might find the free solution insufficient over time and will need to subscribe to a paid, enterprise plan. This translates to costs you might have not taken into account initially.
Infrastructural and human costs. To bring your ecommerce platform to the market, you need to hire software specialists, purchase the servers, and then install and configure them. There are no shortcuts – otherwise, you risk data safety.
Potential security vulnerabilities. According to HelpNetSecurity, 2020 has seen a surge in cyberattacks on open-sourced platforms – 430% more than between 2015-19. This means one thing – you need to work with a software team who can guarantee the highest security standards. Unlike in the case of SaaS ecommerces, you don’t have any out-of-the-box data protection features and will need to ensure security yourself.
A longer time to market. As explained earlier, there are a lot of infrastructural and software-related decisions you need to take before you launch your platform. This means a much longer time to market than if you chose an out-of-the-box solution.
With the comparison of SaaS ecommerce and open-sourced solutions explained, let’s now take a look at two top ecommerce platforms – Magento vs Shopify.
Below is a concise overview of how Magento and Shopify compare across top areas, such as costs, ease of use, and payment modules.
|Ease of use||For web developers only||For users at all tech levels|
|Cost||Free & Premium (pricing available upon demand)||Starting at $29/month|
|Access to themes||70+ themes (average costs per premium theme are higher than on Shopify)||70+ themes (average costs per premium theme are lower than on Magento)|
|Security||Advanced Security and Updates controlled by your tech team||Infrastructure security and scalability included in the package|
|Payment modules||Access to 150+ payment gateways||Shopify Payments – initially, zero payment fees. Integration with 100+ other payment gateways|
|Integrations & Add-Ons||550+ integrations offered through the Plug & Play Marketplace||3300+ integrations offered through the Shopify AppStore|
Given the above Magento vs Shopify comparison, here’s our recommendation:
Choosing between a SaaS ecommerce and open-sourced solution might seem daunting at first. However, here’s our recommendation:
If you have no past experience in launching an ecommerce store or you want to migrate from an old open source that needs too much maintenance, we highly recommend going with a SaaS ecommerce solution, at least at the beginning of your road. Not only will you be able to launch your online store quickly; it will also be easier for you to explore what ecommerce platforms are all about and uncover your needs. In the end, it’s worth remembering that if you outgrow your current SaaS ecommerce provider, you can always migrate into a custom solution such as an open-sourced platform.
If you’re looking for consultants who have experience in implementing ecommerce solutions for B2C brands, you’ve just found the right team. Reach out and let’s discuss how New Gravity can support your ecommerce implementation.
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