I had a prospect come to me last week who wants to create an online store. They want to start with 10 manufacturers, 10 product categories, around 1,000 products and the ability to send drop-ship orders from the manufacturers. They wanted an easy to learn interface, the ability to interface with QuickBooks, and for orders to automatically send them an email for fulfillment. From that point they want to be able to expand as the business grows.
I had not yet built an e-commerce site with the new company and my last experience, with Magento, had been really labor intensive. I like what can be accomplished with Magento, I just don’t like the effort that it takes to get there. With that in mind, I set out to re-acquaint myself with the e-commerce options that are out there. After going through the myriad options available, I thoroughly investigated 3 hosted apps and 2 licensed software carts. Here’s what I found.
Hosted Applications vs. Licensed Software
Most of us aren’t going to be building a shopping cart application from scratch, so the first decision you’ll make when building an e-commerce website is if you’re going to use licensed shopping cart software or a hosted e-commerce platform. The main differences are where the application is hosted and whether you’re on a monthly subscription or you pay (or not) up front. With a hosted application you purchase a monthly subscription to someone else’s software and website, log in to your account and customize it with themes, plugins, or custom code to fit your needs. With licensed software, you download and/or purchase the software (there are many free/open source shopping carts out there), obtain your own hosting, install the software and then customize it the same way you would with licensed software.
Hosted E-Commerce Applications
The main benefit of using a hosted app is the speed. You can literally have an e-commerce site up in hours if you’re willing to use one of their templates, you have your payment gateway(s) setup and your inventory is ready to go. You can customize the look of your site to a great degree, but you still have to play by their rules. Depending on the package you purchase, you are limited in regards to: the number of products in your store, on-site storage, monthly bandwidth and number of administrators. Also, according to the package, you may have to pay setup fees, pay per transaction fees and pay for an SSL Certificate (necessary for secure transactions).
Hosted e-commerce shopping carts are really great for small businesses who are just starting out with limited time and capital. They’re also the perfect way for an existing business to dip their toe into online retailing to see if it’s worth their time. Based on my top-level research, I found the following:
Shopify
Used by well-known companies and groups such as Angry Birds, Amnesty International and the Foo Fighters, Shopify was founded in 2004 as an online store for snowboarding equipment. Since then, they’ve grown to host over 10,000 online retailers. They have a robust community, support, and dozens of themes and apps available to customize your site. Shopify was designed with a crisp clean easy to use interface. The consensus is that it is great for a new business that’s getting started, but experienced online retailers may want something more extensive.
They have 4 plans to choose from and offer a 30-day free trial.
| Plan | Shopify Basic | Shopify Professional | Shopify Business | Shopify Unlimited |
| Monthly Fee | $29 | $59 | $99 | $179 |
| Setup Fee | $0 | $0 | $0 | $0 |
| # of Products | 100 | 2,500 | 10,000 | Unlimited |
| Transaction Fees | 2% | 1% | 1% | none |
| Admin Accounts | Unlimited | Unlimited | Unlimited | Unlimited |
| Storage | 100 MB | 500 MB | 1,000 MB | Unlimited |
| Bandwith | Unlimited | Unlimited | Unlimited | Unlimited |
| SSL Certificate | Included | Included | Included | Included |
Magento Go
The new kid on the block, Magento Go is the hosted version of the popular licensed software Magento, which I’ll cover in a little bit. Magento Go went live in February 2011 with an aggressive pricing structure, a 30-day free trial and a “$1 million Stimulus” program which amounts to a $15/month discount for all users until the total amount reaches $1 million.
As a new product, however, there are still kinks to work out. They only have a few dozen themes and plug-ins (collectively called add-ons) available. They do not currently allow access to the html source codes, so you have to work around this by editing and uploading css files. Currently, you can’t ftp directly into your store to upload or download files. Uploading products by csv files is reportedly buggy. Lastly, and a deal breaker for my prospect, they do not yet have an option for enabling drop shipping.
As it currently stands, I would only recommend Magento Go to new businesses who want to dabble in e-commerce. However,Magento was recently purchased by eBay. With that kind of backing, I expect Magento Go to get through these hiccups. It’ll be interesting to see where they are in a year.
They also offer 4 different plans:
| Plan | Get Going | Going Places | Go Beyond | Go Anywhere |
| Monthly Fee | $15 | $25 | $65 | $125 |
| Setup Fee | $0 | $0 | $0 | $0 |
| # of Products | 100 | 500 | 1,000 | 10,000 |
| Transaction Fees | none | none | none | none |
| Admin Accounts | 3 | 10 | 20 | 30 |
| Storage | 200 MB | 500 MB | 800 MB | 5 GB |
| Bandwith | 4 GB | 8 GB | 16 GB | 32 GB |
| SSL Certificate | Shared | Custom | Custom | Custom |
BigCommerce
Big Commerce is one of the big players in hosted e-commerce. Like me, you’ve probably been seeing their ads all over the place, which makes sense since the interface was put together by marketing people. This carries through to the product management and reporting aspects, which get high marks online against Shopify’s superior aesthetics and simple (some say too simple) interface. Although comparable to Shopify, Big Commerce is considered to be more “heavy-duty” than Shopify.
They currently have the #1 ranking on toptenreviews.com, attractive templates to get your shop up quickly and do not charge a transaction fee. Big Commerce is a good solution for everyone from newcomers to experienced retailers that need more features for their online launch.
Big Commerce offers 5 different options to get started with.
| Plan | Bronze | Silver | Gold | Platinum | Diamond |
| Monthly Fee | $24.95 | $39.95 | $79.95 | $149.95 | $299.95 |
| Setup Fee | $0 | $0 | $0 | $0 | $0 |
| # of Products | 100 | 500 | 1,000 | Unlimited | Unlimited |
| Transaction Fees | none | none | none | none | none |
| Admin Accounts | 3 | 10 | 20 | 50 | 100 |
| Storage | 200 MB | 300 MB | 500 MB | 1 GB | 3 GB |
| Bandwith | 2 GB | 3 GB | 5 GB | 15 GB | 45 GB |
| SSL Certificate | $79 – $449 per year | ||||
Licensed Shopping Cart Software
Unlike Hosted Apps, Licensed Shopping Cart Software have no monthly or setup fees (beyond the cost of acquiring the license) and no limit on products, admins or transactions. You install the software on your own hosting, so you manage your own storage and bandwidth. You are also responsible for obtaining and installing your own SSL Certificate (annual cost of under $100 to thousands of dollars depending on your options). Along with the license, you usually get access to the source code and the ability to control the look and feel of most aspects of your online store, that you don’t get with hosted applications. However, it will take considerably longer to get your online store running as you customize your store.
In exchange for a considerable upfront expenditure of time and capital licensed software will give you exactly what you want. This is the solution for businesses that are serious about online retailing and have a few thousand dollars to spend. It’s not unusual to see quotes of $100K plus for Magento deployments.
I have experience with developing for Magento and it’s never been easy to work with, even over time. Honestly, I began my survey of e-commerce solutions looking for a way not to do another Magento install. However, all the research I did always led back to them and one newcomer that I found. With that being said, let’s begin with Magento.
Magento
Magento is the industry leader for a reason. Their users include names such as Ford Motors, Samsung, Dockers and The North Face. They offer an open source version of their product, Magento Community, with no formal support. However, there is a huge community of users along with thousands of themes, plugins, and sources for source code to do pretty much anything you want. They also offer two versions with extra options turned on and paid support. Magento Professional starts at $2,995 per year and is a solution for small and medium business. Magento Enterprise, as the name says, is made for enterprise-level businesses and can support the largest possible online stores. The price tag for the enterprise solution starts at $12,990 per year.
Magento is actually a relative newcomer, released in March 2008. Since then a cottage industry of Magento theme and plugin developers has sprung up with some web developers devoting their entire business to supporting Magento. Developers love its power and flexibility, but it exchanges that for ease of use. That may be a personal thing, many people love it and claim it’s easy to use. I suspect that my dislike comes from the fact that I’m not a programmer at heart.
In my opinion, Magento is great as a “final solution” for e-commerce. It’s where you want to end up if you ever become Ford Motors or Samsung. But what about the rest of us?
LemonStand
In my research, I kept on coming across a software solution called LemonStand. Launched in July of 2010, LemonStand is known for ease of use and excellent customer support, the founder of the company commonly answers questions in the forum! The license for the software is $299.98 (Canadian Dollars) and it never expires. As a relative newcomer, there are only a handful of themes and plug-ins available.
The buzz on LemonStand is that it’s a great middle point between a hosted app and the complexities of a complex “do-everything” shopping cart. LemonStand combines ease of use, flexibility and the ability to design your store to look exactly like you want it to.
I actually installed a test version of LemonStand and I had a vanilla test store up in a few hours. I dug around and I agree that it’s a much easier interface to deal with than Magento. I would highly recommend it to a small or medium business that doesn’t want to give control of their site to a third-party and doesn’t mind spending the time and money on development.
Conclusion
There are many options available for e-commerce and the answer depends on your business. Are you just starting out or are you an established business? Do you want to try out online retailing or is it going to be your main source of revenue? How quickly do you need the site up and how much can you spend on it? How much control do you want to have over your site?
If you need help determining the answers to any of those questions, I’d love to help you out.