03 Oct Ecommerce Platform Selection: Buying the “just right”
Having been involved with over 200 online retailers in the past few years, one of the most dynamic and difficult decisions a retailer has to make is its technology choice (stack) or ecommerce platform. There are so many variables to take into consideration, like your hosting environment, site programming language, what functionality best aligns with your business model, scalability and integration of third party systems. It’s easy to just pick a popular platform and build a site on Magento because everyone else is doing it. The tough question though is how do you plan for the right technology stack and platform. This very dilemma is one that we help retailers with all the time. This post provides some strategic insights and recommendations on how to pick the best platform for your ecommerce storefront.
Start with strategy
We often see retailers “overbuy” their technology in the name of “I want to be able to scale”. It’s okay to build a website taking your projected order volume into consideration for 3 years from now, IF you still have the funds available after the site launches to develop a successful marketing program that allows you to scale your business with a predictable cost per acquisition (CPA). If you’re on a limited budget though, we recommend picking a solution bridge the gap between where you are and the next version of your site that will scale. On average an ecommerce site needs to be re-platformed (or re-built) every 3 years. Here are a few recommendations based on revenue and order volume to help you think about the technology you chose.
Tier 1: Startup, or “first million” in revenue retailer
If you’re just getting rolling you may want to look at a hosted platform such as a Shopify or BigCommerce. Hosted means that your vendor provides the ecommerce software and the technology infrastructure (hosting and support). With the alternative, a deployed solution built for middle market retailers such as a Magento Community, PrestaShop, Lemon Stand or Spree Commerce you will incur a monthly hosting fee that will be a minimum of 25% more than your all-in fee with a hosted solution and you will need to employ a server admin to ensure your site performance scales with order growth. These are the reasons we recommend a hosted solution such as Shopify or BigCommerce until the 1 million in annual revenue mark or 1,000 orders a month.
Business model and process can also be factors in your decision though. If you have a lifestyle or content heavy brand you may find the limitations you’ll face in not having full control over your site styling and functionality (through source code) to big of an inconvenience. If this is the case, there are a few startup positioned commerce platforms we’ll recommend to our clients based on individual need. These are WooCommerce, a plugin commerce platform for WordPress and Drupal Commerce, a plugin commerce platform for Drupal. These are two open source options that can be built and launched without incurring heavy infrastructure or technical support costs.
Tier 2: Next level retailer, middle market
This is the retailer that is close to reaching the capacity and max scale of their first ecommerce platform. Typically you are doing $750,000 to $3,000,000 in revenue and your system has slowed down performance because of the traffic and order volume it’s processing. This can be a frustrating place to be if you work with the wrong solutions partner or agency to re-build your site. You need to partner with a commerce agency that understand more than just building commerce websites, they need to understand ERP, CRM, Accounting and Order Management as well. There are lots of moving pieces and data points that need to be connected and likely some SEO equity that needs to be maintained. At this level you likely already have a trusted technology contractor or employee for ongoing maintenance and support. You’ve created some type of business model to predict and manage your expenses and growth. If this best describes you, here are our current favorite goto platforms.
- Spree Commerce: We prefer Spree over everything else in this space because of the technology stack. Spree is built in Ruby on Rails, has a great API and is light. We like light because light leads to speed and speed leads to conversion rates and a great mobile experience.
- Magento Commerce: Magento is the most popular choice out there and for good reason. Magento has the largest eco-system of existing functionality which allows you to create and build just about anything without breaking the bank. It is PHP based though, so it can take extra hardware resources to keep your site performing quickly. It’s known to be a little heavier in its resource draw, which may lead to a slightly higher hosting cost as well.
- NOPCommerce: NOP doesn’t stack up to Magento and Spree, but it is an open source ASP.NET platform, so if you have a Microsoft technology stack and an internal team that makes this a non-negotiable this is a good solution
We do give an honorable mention to PrestaShop, it’s fairly similar in feature set to Magento without the ecosystem and maturity, so if we’re going to recommend something in the middle market PHP space it would be Magento, but PrestaShop is growing in marketshare comparably to other top middle market carts.
Time for Enterprise
Our client base is in the middle market world. We define Enterprise as $100 million in revenue annually and up (online). In this world there are a few solutions to consider. One of them is building a platform from scratch, in-house with your own team. The other popular choices are Demandware, Hybris and Oracle. Magento (Ebay Enterprise) is making a move in this space as well.
If you have questions on what platform you should be developing your commerce site on, feel free to contact us for a free consultation. We’re passionate about helping retailers drive more revenue and create more efficiencies in their business.