Hosted 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 Shopify mainly because I had test driven the cart and several of my friends and competitors successfully use Shopify to run their business.

Shopify is an excellent hosted shopping cart, but the main thing I always had against Shopify 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. (Update: Shopify no longer charges a transaction fee if you use their credit card processing.

I’ve spent quite a while test driving hosted shopping carts and I found that BigCommerce also offers 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 start very cheap as well.

Their business model is different than Shopify 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 hosted cart that charges a percentage fee.

BigCommerce makes 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. Big Commerce also offers 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 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, Big Commerce offers a heck of a deal 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.

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26 thoughts on “Hosted Vs Non-Hosted Ecommerce Shopping Cart Solutions – My Updated Take”

  1. Bryan says:

    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.

    1. @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.

  2. 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 😛

  3. 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.

    1. @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.

  4. 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!

  5. Bryan says:

    @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!

  6. Pete says:

    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?

    1. 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.

  7. Emilie says:

    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 :)

  8. 39shops is a hosted e-commerce platform that allows you to start your online store in minutes. With 39shops you never ever worry about hosting, security, maintenance and upgrades. While you grow your business we take care of the rest.

  9. I have always been a big fan on Magento, but now they have a hosted solution called Magentogo.

    BigCommerce is a solid hosted ecommerce solution. And BigCommerce does not have transaction fees.

    Hosted Shopping Cart – Is 39shops new? I never heard of them.

    I usually go to comparingecommerce.com. They give you an unbiased comparison of the best shopping carts. Zippycart is a good comparison site too, but they sometimes rate the shopping carts based on how much commission they will make once you click on the link. And they don’t always give you insightful information that you are looking for

  10. Good article, but the main arguments seem to be about level of technical skills/ confidence vs monthly cost. I’m pretty technically enabled and my inclination is almost always to go with “I’m in control” solution. The challenge I am facing with a steadily growing online business is the TIME I spend dealing with upgrade issues, bugs, and lately hacking attacks. Since my main role is actually sales & marketing, that fact that I have technical ability needs to be balanced with the fact that there are only so many hours in a day. And of those hours, only a relatively few are optimal in terms of my personal energy level and work-focus.

    So what I am facing now is the choice of upgrading to a new self-hosted solution with one-time cost, or leave that driving to someone else like BigCommerce and put my energy into sales growth. My product line is relatively small, so costs can be contained and if I regard these fees as equivalent to a low-paid but highly competent part-time employee, they actually seem trivial.

    But it’s a tough call for me because of my technical skills and enjoyment of tinkering around. If I’m honest though, I’m not really that good, and the time spent is time away from using my marketing abilities, which are stronger. So for the first in my web-building life, I am considering going with a hosted third-party solution.

    1. Ron I would say checkout comparingecommerce.com price chart comparison. I was in the same situation you were in two years ago. I was using a hosted solution, due to cost savings and enjoyment of managing technical aspects of business, but I switched over to BigCommerce and now I have more time to focus on marketing and customer generation. I say go for it. I fill more at piece with a hosted solution due to having an extra layer of security that will protect against threats. Let me know if you have questions. My sells have drastically increased, but I do miss managing the technical aspect of business

    2. Kathy Dannel Vitcak says:

      Well, what did you do!? I am in the same spot. I love my site, but I spend all the time I could be building my business on messing with plugins that are not compatible and wiping hot tears of frustration off my keyboard. There is stuff I like on each of the hosted services…and each one has a deal breaker. My biggest fear is I will move my site and the hosted solution will be a huge time and money drain and I will be out of the frying pan…oh you know.

      From an SEO standpoint are these hosted services as good as a wp site with a good plugin – I use Yoast’s.

      Thanks looking forward to what you did!!!

      Kathy

  11. I went with BigCommerce, and am loving it, wishing I had done it much sooner. We had a a banner week and BC performed flawlessly while at the same time I was dealing with yet another spam attack on my original virtual server with related sites. (I’m still transitioning and using a sub-domain for BC while I work out some domain migrations.)

    I have a few improvement ideas for BC, but they are minor at this point compared with its overall reliability and the very helpful support attitude they project. I like that their software is in PHP and customizations are pretty easy.

    I’m a big user and promoter of WP and Joomla sites, but I’m pretty much done recommending any type of e-commerce plugin or component, free or otherwise, for anything but low-volume, low inventory transactions. If you want to scale up, you need a robust point-of-sale machine, and we’re at a point where BC and similar ones are priced right and have pretty well addressed the SEO issues. (And btw I only have about 12 products!)

    I absolutely think the SEO on these hosted services are up to par, but you can always use your own WP and domain as a marketing site if you’re most comfortable with that, and just use BC (or other) as the point-of-sale. (And I say this from having done this many times for commercial clients with great success.)

    As webmasters we get so focused on SEO and marketing that we may treat the actual transaction component required for conversion as a minor detail, when it actually is very critical. And I’ve always had a high conversion rate, even using purchased cart software. But as sales were growing, so were transaction failures, complaints, and time-sucks over upgrades and server crashes which may not even be related to my store.

    And that’s all I have to say about that! (For now.)

    1. Terry says:

      Ron, that’s what I’m experiencing with my hosted site now. I am a web developer but taking on the business side I’m considering transitioning to a paid solution. Just because I *can* be the marketing, web, it, biz dev and r&d departments doesn’t mean I should be trying to play all those roles. If this was my full time gig or I had staff that would be a different story but my business needs the focus. I can see myself transitioning back in the future if I need to.

  12. BigCommerce and Volusion are both good shopping carts. Each offer features that the other one may not. For example, Volusion may offer e-mail marketing and abandoned cart reporting, where BigCommerce may offer unlimited bandwidth and Volusion will charge for bandwidth overages. If you use a service like bandwidthdiet.com, you won’t worry about bandwidth fees, and it may even out the advantages/disadvantages between the two shopping carts.

  13. Wonderful post. I appreciate your attention to this subject and I learned a good deal.

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  15. Gomez Maria says:

    Hello,
    How’re you?I want to purchase an order from your company to our

    store in The Netherlands.I want to know if you can ship

    international and also your form of payment?e:g…Credit card.
    Await your reply back asap.
    Thank you and God bless you.

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    Gomez Maria

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