Choosing an eCommerce Solution




Choosing an eCommerce Solution

There are a number of solutions and platforms you can use for your eCommerce shopping site, each quite different. This article goes through the various types, and looks at both their advantages and disadvantages.

Electronic Mall Solution

Also known as: Simple Software as a Service (SaaS) Model.

Features:
  • This is the simplest type of eCommerce solution.
  • Everything - software, data and webpages - are hosted on the provider's servers, and all you basically do is populate the store with your products.
  • With the exception of some minor tweaking of look and feel, no customization is provided.
  • You are sharing the servers with thousands of other online stores, working independently.
  • Payment is typically made on a monthly basis, based either on a flat fee and/or a percentage of profits.
  • Most mall solutions already include a payment gateway.
Advantages:
  • By far the simplest to set up, with all processes and tools in place.
  • Lowest up front costs.
  • Financial processes, such as credit card processing and gateways, are already done for you.
  • No technical knowledge needed.
  • No need to find a web hosting company.
  • Security is quite well controlled.
  • Fastest time to market.
  • No staffing costs.
  • Robust and well tested.
Disadvantages:
  • Negligible customization and little control on the store's functionality, behavior and design.
  • Can look unprofessional, especially if the store exists as a subdomain on the provider's servers.
  • Will not integrate with your own inventory and financial systems.
  • Support for the store is completely controlled by the provider.
  • Generally not scalable to large number of transactions.
  • Hosted on a shared environment, which may slow your own performance.
  • Low capability for company branding.
  • May be penalized for success, as provider takes a slice of profits.
  • Customer information held by 3rd party.
Used when:
  • Budget is very low.
  • Time to market is important.
  • Look and feel is not important.
  • Feature set is not important.
  • Complexity is low.
  • Number of transactions is low.

Hosted Solution

Also known as: Template Solution; Managed Software as a Service (SaaS) Model.

Features:
  • Some flexibility is provided by having templates and step-by-step instructions to customize the store.
  • Software, data and webpages are hosted on the provider's servers.
  • You are sharing the servers with thousands of other online stores, working independently.
  • Payment is typically made on a monthly flat fee basis.
  • Payment methods need to be added to store, and are often not included by the provider.
Advantages:
  • Reasonably straightforward to set up - no installation or configuration.
  • No maintenance required, as the provider takes responsibility for this.
  • Low startup and overall costs.
  • Reasonable control over the store's look and feel (though constrained somewhat by templates).
  • Often the provider offers premium technical support.
  • Reasonably fast time to market.
  • Can scale to some degree, as hardware and infrastructure are looked after by the provider.
  • No need to find a web hosting company.
  • Security is quite well controlled.
  • No staffing costs.
  • Provider often has continuous investment to improve their feature set.
  • Robust and well tested.
Disadvantages:
  • Low control over the store's functionality.
  • Customization still requires a high degree of technical skills.
  • Will not integrate with your own inventory and financial systems (though there are exceptions).
  • Support for the store is completely controlled by the provider.
  • Hosted on a shared environment, which may slow your own performance.
  • Low capability for company branding.
  • Customer information held by 3rd party.
Used when:
  • Budget is low.
  • Time to market is important.
  • Look and feel is important, rather than feature set.
  • Complexity is low.
  • Number of transactions is low to medium.

Freeware Solution

Also known as: Open Source Solution; Community Solution; Free Shopping Cart.

Features:
  • The software for the eCommerce platform is provided as a free download.
  • The software is hosted on a separate website which you need to provide.
  • You have significant control to modify the software as you see fit.
Advantages:
  • Zero up front cost.
  • Some degree of customization and control on the store's functionality, behavior and design.
Disadvantages:
  • Complex to set up and build.
  • Requires its own website.
  • Requires purchasing of some sort of payment gateway.
  • Requires very high degree of technical capability.
  • No support.
  • You get what you pay for: no warranty, and no guarantee that it is free of major defects.
  • Often comes with security vulnerabilities.
  • Generally not scalable to large number of transactions.
  • Low capability for company branding.
Used when:
  • There is no budget.
  • Time to market is important.
  • Complexity is low.
  • Number of transactions is low.
  • You are prepared to run your store without commercial support - ie at high risk.

Licensed Solution

Also known as: eCommerce Suite; Software Suite; Enterprise Solution; Proprietary Solution; Buy Model.

Features:
  • The software for the eCommerce platform is licensed from the provider for a flat fee (monthly, yearly or once-off).
  • The software is hosted either on a separate website, or on the provider's site.
  • The licensee has significant control to modify the software as they see fit.
Advantages:
  • High degree of customization capability and control on the store's functionality, behavior and design.
  • Support for the store is provided by the provider, but is also under your control.
  • Partial integration with your own inventory and financial systems.
  • High control of company branding.
  • Security is quite well controlled.
  • Often very feature rich.
  • Provider often has continuous investment to improve their feature set.
  • Robust and well tested.
  • Pick and choose which features you want.
Disadvantages:
  • Complex to set up and build.
  • High up front costs.
  • Fairly long time to market.
  • Requires purchasing of some sort of payment gateway.
  • Requires very high degree of technical capability.
  • Innovation for new features is limited.
Used when:
  • Budget is medium to high.
  • Look and feel is important.
  • Feature set is important.
  • Complexity is high.
  • Number of transactions is medium to high.

Custom-built Solution

Also known as Turnkey Solution; Custom-made Solution; Build Model; Bespoke Solution.

Features:
  • The software for the eCommerce platform is built from scratch using a team of developers and designers.
  • The software is hosted on a dedicated server, usually custom-built to fit the solution.
Advantages:
  • Absolute and total control on the store's functionality, behavior and design, as the eCommerce solution can be built to your own specifications - exactly what you need and want.
  • Can be built for any number of transaction and users - particularly suitable for extremely large enterprises (ie very scalable).
  • Full accountability over environment, hardware, support, changes etc.
  • Can be built for complete integration with your selected inventory and financial systems.
  • Total control of company branding.
  • Often very feature rich.
  • Robust and well tested.
  • Completion innovation roadmap for new features.
  • Opportunity to provide something unique in the market.
Disadvantages:
  • Extremely expensive.
  • By far the most complex and timely to set up - very long time to market.
  • Requires purchasing of some sort of payment gateway.
  • Requires extremely high degree of technical capability.
  • Requires a lot of work and testing to ensure there are no security vulnerabilities.
  • High risk venture.
  • Ongoing maintenance and support requirements.
Used when:
  • Budget is extremely high.
  • Look and feel is important.
  • Feature set is extremely important.
  • Complexity is extremely high.
  • Number of transaction is extremely high (enterprise).
  • Branding is extremely important.


QUOTE OF THE DAY Buying something on sale is a very special feeling. In fact, the less I pay for something, the more it is worth to me. I have a dress that I paid so little for that I am afraid to wear it. I could spill something on it, and then how would I replace it for that amount of money?
- Rita Rudner