Comparing eCommerce Platforms

Which is the right eCommerce platform for you?  Depending on your unique case, there could be different answers to that question.  For many of you reading, looking to start your very first eCommerce site, the answer is obviously going to be different than a big company with business teams and web developers. But in some cases, it may actually be the same answer. It really depends on what you need, what your budget is, and what you plan to do with your eCommerce business.

I’ll start with what is the most popular eCommerce platform in the world right now – Shopify.  Personally, I’ve been a Shopify user for over 7 years now, and I’ve seen it come a very long way during that time.  As the VP of eCommerce for theChive, I led what was at the time the largest customer account on the Shopify Plus platform.  Our flash sales and product releases would stress their hosted platform beyond the limits they thought were possible, and we held them very accountable for up-time when it may have been unreasonable to do so.  But they always came through, and invested in hardware in order to do so.  We literally helped shape their success at the time because we made them step up and be better, and stability was always one of their key positive factors for new customers that were coming on board.  Now they have over 500,000 eCommerce stores running on their platform.

I’ve spent time at their beautiful headquarters in Ottawa with Tobi Lutke, their founder, and other senior leaders such as Harley Finkelstein and Loren Padelford, as well as several others there who I consider personal friends of mine.  I’ve advised them on functionality that I’d like to see added to Shopify Plus, helping to shape their roadmap based on my prior experience with enterprise platforms.  I would say that not many people know Shopify better than I do, the software and the company.

It is great for so many reasons, and at the same time it has many shortcomings that can be very frustrating if you have experience with large enterprise platforms.  I’ve run two very large $10m to $30m eCommerce organizations using the platform, and it managed to do what we needed it to do to be successful.  I’ve also managed small start-ups using the basic $29 / month Shopify level, and there is no doubt that there is no better or faster way to get your eCommerce business up and running.  But that doesn’t mean it is the only option or even the best option for your business.

I’ll be dedicating future entire articles to Shopify, so I won’t go into too much detail in this post.  But I will say that I can have a solid looking, fully transactional eCommerce business up and running from non-existent to taking orders within a couple of hours. And have a really nice, rock solid store with extended functionality in place within a week.  Try doing that with one of the large enterprise eCommerce platforms.  It is a fully hosted solution, so you don’t have to worry about stability or up-time, and there are a lot of really nice themes and functional add-ons, called apps, that you can add either for free or usually reasonable costs.  Shopify is all that is good (and sometimes all that is wrong) with eCommerce nowadays. It makes it very easy to get up and running, and if you know what you are doing, it is a very efficient way to start conducting online sales in a short period of time.  On the downside, because it is so easy to get started, there are thousands of people who set up a Shopify account and stand up a horrible site, selling garbage (usually dropshipped) products, put $20 in some ads on Facebook because someone told them eCommerce was easy – and then complain that they aren’t generating any sales.  Don’t be that person.

Aside from Shopify, the other platforms to consider in this space are BigCommerce, which I think actually had more potential than Shopify early on, with a better product (originally called Interspire). For whatever reason, BigCommerce didn’t do as good of a job in marketing themselves and pitching the ease of use and focusing on the new / start-up eCommerce business and were really left in the dust by Shopify.  But overall, I love BigCommerce.  It’s a terrific platform and is reasonably priced. I think the way you can set up products / variants, and manage your entire eCommerce business, may actually be better in BigCommerce than in Shopify.  There aren’t as many solid themes or apps to extend the functionality though, and I think that makes it less of an option for many people new to eCommerce.  One really great example of a BigCommerce site, however, is, which is run by my very own brother, Greg. He and I were some of the earliest U.S. adopters of BigCommerce (Interspire) back 15 years ago when it was software that you had to host and manage yourself.

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Next we have a couple more options out there, that differ from Shopify and BigCommerce quite a bit.  Magento is one of these platforms that, while huge, never really was able to simplify itself to become a viable option for the do-it-yourself eCommerce business owner.  While a great platform that runs large and successful sites, the learning curve on Magento is usually more than a small business owner / start-up wants to deal with.  Magento was sort of stuck in the middle of being a small business platform with enterprise aspirations, and they (perhaps incorrectly) chose to lean more toward the enterprise level, all while dealing with an acquisition by Ebay that left it without clear direction or leadership.  Magento users have a lot more control on their eCommerce platform, but if you are going to be using Magento then you would want to make sure that you have a development team of resources, either in-house or an agency, who can do the necessary development work to help you build out your site in the manner that you want it to function.

On the other end of the spectrum is WooCommerce, an extension of the most popular content management system in the world, WordPress.  WordPress is the main engine to Launch Commerce, and we have a sample WooCommerce store that we’ll be opening soon so that people can see it and learn more about that platform. It is a relatively new (compared to the others on this list) platform that has gained in popularity and functionality recently.  And it is free, so that is appealing to people who don’t want to invest even in the basic monthly Shopify or BigCommerce fees.  It is not a true SaaS (hosted) platform, though it may be pre-installed on a hosted WordPress server.  But you won’t have the scalability of a platform like Shopify (important when you have a flash sale that tallies 1,000+ orders a minute).  But for the beginner who wants to dip their toes in the water of eCommerce, and also already has a WordPress content site, it isn’t a bad idea at all to bolt WooCommerce onto it and see what you can do with it as an additional revenue stream.

You may have also heard of Volusion.  I’m not going to waste too many words on that one, but avoid Volusion at all costs.  It is a terrible platform and a terribly run business.  Let’s just say I’m still trying to get them to stop charging me for a test store that I opened up 2 years ago that was so bad I cancelled within one month.  Disappointing as they are a fellow Austin Texas company, but wow… did I mention they are terrible?

Anyway, perhaps you are here for conversation on an enterprise platform. If your business is generating $50m or more in annual revenue, and you need things like complex personalization or a staging environment for business users to do work before moving it to production, then none of the platforms I’ve discussed so far before will work for you.  There are a few options out there in this category, most of which have recently been involved in some sort of acquisition by a larger company over the last few years.

Demandware (now known as SalesForce Commerce, which is why I’ll keep using Demandware as the name) is a terrific platform that recently received some much-needed modernization enhancements.  It is the only one of the enterprise level platforms that is truly hosted (SaaS) and as such, they are the only one that also charges licensing fees based on a percentage of your site’s revenue.  I’ve negotiated several of these deals, and the price that you will get really depends on the size of your business / annual revenue.  There will be a minimum that you have to pay, in case your revenue numbers completely drop-off the face of the earth, and you will have at least a two-year commitment.  The administration piece if fairly easy to use and is very powerful with the amount of personalization that can be done out of the box.  If you really need a hosted enterprise platform, it is probably your only realistic choice at the moment (depending on what happens with the next platform we discuss).  You will need an implementation partner to set up your Demandware site, and you’re looking at 3-6 months to build, configure, integrate with your other systems and launch, and your development costs will easily be in the $350k+ range, plus the licensing fees.  So you obviously need to make sure that your business / margins can support this.  But platforms like this, combined with a strong user experience, actually will increase your revenue so it may not be as daunting of a task to justify as you may think. If a platform can take your business from $40m to $60m, investing ~$1m may be well worth it to you.

IBM Websphere Commerce is the next platform we’ll be reviewing.  I have many years of experience with IBM and know virtually everything there is to know about it as well.  I’ve launched sites such as Harley-Davidson, Caterpillar, Campmor and Cengage all on IBM Commerce.  The cost has been prohibitive for many retailers, but IBM has been more aggressive recently with their licensing fees in an effort to compete and hold onto / grow market share.  They also have made many key changes in the new version 8 of the software that provides a SaaS solution to compete with Demandware while improving the overall engine of the platform.  I’m very optimistic in the next wave of what IBM has to offer, and customers are just now starting to jump on the version 8 train. And IBM still has a monopoly on companies that offer multiple eCommerce storefronts under one master catalog of products, such as international sites. They have patented technology that make it almost a foregone conclusion that if you want to manage many stores around the world, using the same master catalog of data, then you need to be using IBM to do so efficiently.

Hybris was one of the hottest ecommerce platforms around a few years ago, as many companies were excited to see a new player in the space with lots of promise and potential.  This excitement and rapid adoption led to an acquisition by SAP, and as with many acquisitions this has had the effect of slowing overall adoption growth, deterring potential customers who were not SAP shops and had no intention of becoming full blown SAP shops.  It seems that while still a very powerful platform, the luster has worn off a bit after the acquisition.

Similarly, ATG has gone through the same kind of dilemma after becoming Oracle Commerce. In 2008, I was part of a team that launched on the ATG platform.  At the time, ATG was an incredibly powerful platform that was probably the strongest player in the enterprise ecommerce platform space at the time.  Once the company was acquired by Oracle, however, it seems that perhaps the investment in the product didn’t keep pace, it was quickly passed by other more advanced platforms. It is still an option out there today, but it does seem to be in 4th place of the 4 enterprise platforms that I mentioned previously.

All of these enterprise platforms will require a significant investment in both implementation and licensing fees, likely combining to be in the $1m and up ballpark depending on the complexity of your business model and how many customizations are necessary.  For this reason, they really only make sense for those businesses generating $40m per year or better, unless you have significant custom requirements that simply aren’t possible on a smaller platform. If you have a more straightforward eCommerce model, and your revenues are under $40m, you may want to consider Shopify Plus to benefit from the significant cost savings.  Even with pricing changes soon to be implemented by Shopify for this level, your costs will likely be in the $25k – $50k per year range.

Let me know if you have any questions about selecting the right eCommerce platform that is right for your business.  And as a partner for many of these platforms such as Shopify, BigCommerce and others, I can actually pass along discounts and other benefits by referring you through Launch Commerce. So comment below, give me a call, or send us an email to discuss in more detail if you have any questions.

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Joe Rozsa
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