Follow On TwitterHosted Vs Non-Hosted Ecommerce Shopping Cart Solutions – My Updated Take
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As long as I’ve been writing tutorials on how to open an online store, I’ve always advocated going with a free open source shopping cart and hosting it yourself as opposed to signing up for an all-in-one hosted ecommerce solution. After all, if you host your shopping cart yourself, you’re in charge of your own destiny. You have full control over the source and no one can suddenly raise prices on you. Plus, there are many cool things that you can do on your own that the big hosted solutions won’t allow you to do.
Photo By Kevin McShane
But after running this blog for a couple of years now and listening to reader feedback, I’ve come to realize that using an open source ecommerce solution and self-hosting may not be the right solution for everyone.
Some people are just completely tech averse and don’t want to deal anything remotely related to computers or technology. While I used to urge these people to learn some of the basics, what would inevitably happen would be that these people would quit before they even got started because they were scared of the technical aspects of running a store.
Of course, some people are just not cut out to be entrepreneurs but I strongly believe that by just giving yourself a chance, you are already half way there. By making it easier to start a business, you are more inclined to take the plunge. Don’t get me wrong, self hosting your shopping cart is still a superior solution in my eyes for the control and flexibility, but I thought that it might be a good time to evaluate some of the leading hosted shopping cart solutions.
What’s Out There?
For the last couple of years, I’ve been recommending Yahoo Merchant Solutions mainly because I had test driven the cart and several of my friends and competitors successfully use Yahoo to run their business.
Yahoo is an excellent hosted shopping cart, but the main thing I always had against Yahoo was that they charge you a percentage of your gross sales. Taking away 1.5% may not seem like a big deal early on, but once your store becomes big, 1.5% can be a huge chunk of change. Also what sucks is that this 1.5% is applied directly to your revenues and not your profit. If you run a store with low margin goods, 1.5% could mean the difference between losing money and being profitable. Now that there are more choices out there that do not take any fees whatsoever, I can no longer recommend Yahoo.
I spent this last weekend test driving hosted shopping carts and I found that both Volusion and BigCommerce offer an awesome hosted shopping cart solution for a low fixed monthly fee. That’s right! Just a low fixed monthly fee and no transaction fees whatsoever! Plans actually start as low as 25 bucks.
Their business model is different than Yahoo in that they charge a flat fee based on the number of products that you offer in your store and they also impose a bandwidth limit as well. But outside of the monthly fee and possible bandwidth overages, your fees will not grow linearly with your revenues like with a Yahoo Store. Volusion and BigCommerce make their money from a fixed monthly subscription model as opposed to taxing their merchants.
The Design Tools Are Better Now
The other thing that I noticed was that the out of the box graphical design tools are now much better with the latest hosted solutions. Normally I could care less about graphical web design tools. After all, you will eventually have to touch html code to make your store look exactly the way you want it to.
However, peering through the eyes of the tech averse entrepreneur, I can see how these tools could be valuable from a psychological perspective. Being able to throw up a decent looking online store without knowing much html/CSS at all reduces uncertainty and postpones the hurdle of having to learn about programming.
Big Commerce for example offers an intuitive drag and drop interface where you can shuffle things around with your store at the click of a button. Both Volusion and Big Commerce also offer a pretty good library of standard templates for you to start out with. All in all, I found that I could throw up a decent looking store within a matter of minutes without knowing a lick of HTML.
Their back end features and tracking are also top notch, but what’s different now is that there’s built in support for popular social media sites like Facebook. Again if you know the basics of web development, adding these things isn’t a big deal but for a tech averse shop owner, it’s pretty convenient.
You Don’t Have To Be A Tech Expert To Start
If you have an ounce of tech in you or you are eager to learn about the web, then I still recommend hosting your own cart. Who knows? BigCommerce or Volusion could go out of business someday and take your store down with it. They could also increase their fees once you are dependent on their services.
But for now, both Volusion and Big Commerce are offering a heck of a deal at only $25/month to start a fully featured online store. If you want to avoid the technical aspects altogether and focus on selling, then going with either of these services is a no brainer.
Up next, I’m going to do a breakdown of Volusion vs BigCommerce while my evaluation is fresh in my mind. Both services offer various pros and cons so tradeoffs need to be made if you are deciding between the two.
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Thanks for the suggestions! Shopify.com is another very similar storefront. Tim Ferriss has been recommending that one for awhile now, and they just completed a small business start-up competition.
@Bryan
I believe Tim Ferriss has an investment in Shopify but I’m not 100% sure so he might be biased. Shopify is good, but like Yahoo, they charge a transaction fee. I like Volusion and BigCommerce because it’s just a flat rate per month fee.
Hey Steve,
Thanks for sharing these two resources. I have both of them on my radar and have been thinking about giving BigCommerce a run. I really like the technical simplicity but overall power of the platform.
I can design and code my own sites but that takes time. Like they say, the more you sit on an idea the higher chances someone else will jump on it
[...] This post was mentioned on Twitter by Colin Wright, Business Coaching. Business Coaching said: Hosted Vs Non-Hosted Ecommerce Shopping Cart Solutions – My Updated Take http://bit.ly/ayixxO [...]
Tim Ferriss is an angel investor in shopify.com, so he’s definately biased no matter what he says.
There’s no comparing using an “off the shelf” solution to building a full blown e-commerce site. I like to dig into the code to do my own customizations, but I like to start from something that’s already complete. I’m a real nut about design and have biases towards what’s the most effective, and some off the shelf solutions don’t offer that kind of control. Of course, if you want to do something that your template doesn’t do and you don’t want to get your hands dirty with code, then you can always find someone who will do it for you.
@A-ron
I think we share the same philosophies, but most people are afraid to dig into code and I’ve a few friends that have wasted a ton of time and money on hired help because they don’t know what is doable or they keep changing their minds.
I can attest that Volusion is a good buy. I personally go with the self hosting paypal and Magento setups like you steve but when my clients and fans need something they can get into and their beginners, a hosted solution makes sense. The prices are getting more competitive, and just like you said, the tools aren’t as bad as they used to be…if you can use facebook I think you can probably get the hang of Volusion. Thats my pick and what I like supporting and recommending anyway. Good re-review!
@Steve
Great catch! I didn’t notice that Shopify had a transaction fee. That’s a serious downside! I’ll definitely be checking out your recommendations more carefully.
I see hosted shopping as an excellent way to get started fast and to test your business idea without investing too much time designing a cart or site. Once you get your business off the ground, you can put in the time to design your own non-hosted store. Thanks again for the tips!
[...] Similar PostsHosted Vs Non-Hosted Ecommerce Shopping Cart Solutions – My Updated Take [...]
The notion of fee spikes and these companies going out of business is kinda scary. But my primary inclination towards these hosted solutions is more based on the fact that i’m just really want to get started. I have experience developing and designing simple websites but i don’t want the technical frustration to get in the way of developing a fragile new business. Any suggestions for my situation? Im thinking of switching to my own cart after my business is better developed, but that is apparently very difficult and possibly damaging to the business?
Hi Pete,
You are right. Going with a hosted solution is much faster to start with but keep in mind that migrating can be a real pain. One of my next blog posts is going to talk about how one of my competitors did this incorrectly and lost all of their Google rankings.
This choice is up to you. I think guys like Volusion and BigCommerce will be around for a awhile but who knows if they’ll jack up their rates. Going open source isn’t so bad. After all, the cost is already written and you just have to install it on your server.
I’ve been using MiiDuu.com, and I really like it. I dont’ have a lot of tech savvy, so I wanted something easy and free, which MiiDuu is. I also liked that they have the option to upgrade for just 30 bucks a month, so once I get things rolling and force myself to learn CSS i can upgrade and it’s still cheaper than a lot of other paid sites out there. Also, I won’t have to move stores. I was also told they’re going to have a feature soon that allows me to put my store in my Facebook profile, which I’m sure will fuel my Facebook addiction haha
I’m still in the beginning stages of all of this eCommerce stuff though, so for now I just like how easy it is to use so while I figure out all this “backlink” and “keyword” stuff out I still feel like at least SOMETHING is going right! So I can see where hosting your own store is great for some people, but for people like me I’d probably never even have a store if it weren’t for sites that do all that coding stuff for me
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