When online retailers decide to create new eCommerce sites, the first thing that they have to do is choose an eCommerce platform that will support their needs and help their company grow. For many, the first step in making this choice is deciding between the two very different worlds of template-based platforms like BigCommerce and open source platforms like Magento. Here are some of the main factors to consider when determining which of these two is best for you:
An Enterprise Resource Planning system, or ERP, is a business process management software that is often used by eCommerce retailers to capture funds and keep track of important business numbers.
The first important function of newer ERPs is to capture funds for eCommerce companies. What does this mean? Legally, customers cannot be charged for a product that they have ordered online until it has been shipped—or at the very least until a tracking label has been created. New ERPs create these tracking labels, thereby allowing for the funds to be captured and for revenue to be recognized. Secondly, and more importantly, ERPs integrate the back-end accounting functions of eCommerce sites, keeping track of things like inventory and products across multiple channels. In other words, they help retailers track sales, product costs and inventory, generating important reports and updates.
This function is particularly necessary for eCommerce companies that operate in multiple locations or across multiple channels - like, for example, a company that works online and in one or more brick-and-mortar locations. Why? It is exactly these kinds of multi-faceted operations that will need help keeping track of a more complex business.
That said, any company that requires an ERP or already has a highly structured or advanced ERP in place will likely need an open source platform: ERPs simply don’t integrate well with the template-based software, and trying to force an integration will likely lead to poor site performance overall.
A CRM, or Customer Relationship Management software, is designed to help retailers manage the different facets of their business - like customer data and interactions, business information, marketing and automations - by centralizing customer data in one online location. HubSpot, for example, is a popular CRM that works to align companies’ marketing, sales and development teams by centralizing all relevant data and efforts, including content, social media, contact information and reports. By putting all integral functions and data in one place, CRMs can help eCommerce retailers organize their businesses and keep every member of their team on the same page.
In general, companies that already have a CRM in place should choose an open source platform since template-based systems often have their own CRMs and do not integrate well with existing or external CRM software.
No CRM? Then a template-based platform could be a good start: they’re easy to use and their built-in CRMs are user-friendly, easy-to-implement and helpful for new eCommerce retailers.
When deciding between template-based and open source platforms, eCommerce retailers must consider both the number of products that their website has and the number of variations on those products. A general rule of thumb is the more complex and numerous the catalog types, the more likely you’ll have to go with an open source platform.
Why is this? Template-based platforms tend to work best with simple, defined product types - meaning products that don’t have variations or options like bundles and attributes. Once things begin to get more complex, template-based platforms just do not perform as well and the performance of the product pages begins to suffer. This can turn into a big problem for site owners since issues like slow page load speed, unresponsive product page design or low-quality product images can negatively impact traffic and conversion rates.
This point is fairly straightforward: open source platforms are usually much more expensive than template-based platforms. Why? On open source, retailers have to build from the ground up, meaning that they need to pay for developers, extensions, coding, updates - the list goes on. Further, this cost is often unpredictable, with unforeseen expenses like security patches, redevelopment and extensions coming up all the time.
Overall, then, open source platforms typically cost an average of 4 times more than template-based platforms over time. For some eCommerce retailers, it’s worth the investment: highly architectured sites with experienced development teams, for example, need a level of customization and buildability that only open source platforms can provide. For others, however, this isn’t the case, and a template-based platform is more than sufficient, providing all of the software and extensions that they could need. New retailers, then, need to consider the nature of their company, its potential for growth and the overall goal of their site when they consider these budget questions and whether or not it’s worth investing a large sum in their site.
Most of the time, eCommerce retailers will need to alter their business practices to fit the template-based models, which can be much more restrictive than open source. What does this mean? BigCommerce, for example, generally requires that retailers ship their products by land. This means that if a company’s business model calls for air shipping - say they ship extremely perishable items - they would have to restructure or find another platform. In such cases, the flexibility of open source is a huge plus.
That said, this restrictive business model is not always a negative: many companies don’t have a firm structure or defined practices in place, and they can benefit from the guidance that these template-based platforms provide. In general, then, it is important that retailers consider the restrictions and requirements of their business, choosing the solution that will best support them.
So what do all of these points have in common? Overall, template-based platforms offer software as a solution, essentially giving eCommerce retailers ready-made eCommerce sites that have all the pieces and components already included. This makes them the ideal choice for those that can effectively utilize and benefit from the provided software to create their online store. Open source, on the other hand, calls on retailers to build the site themselves-- an option that, although daunting, can provide increased freedom, technicality and scalability. While there is no wrong choice between the two, it is important that retailers recognize that the platform is the foundation of their online presence and choose the system that will best support their company’s needs and allow their site to run smoothly and efficiently over time. Still unsure about which option is best for you? It may be helpful to contact an eCommerce agency and speak with a development expert to get you on the right track.