Hosted or self-hosted ecommerce? That's the most common question I'm asked about ecommerce and so my article today is to help you make a decision on which kind of ecommerce platform is right for you and your business and your future plans. This article is 1400 words long, and I feel like I've only just scratched the surface to be honest!
Like my last comparison “template vs bespoke websites”, this is a long one… therefore grab yourself a cup of coffee (or a wine if its the evening like me!), sit back and ENJOY.
If you have any questions, then drop me a comment below and I'll answer.
What on earth are self-hosted platforms?
As you may already know I am a HUGE advocate of self-hosted open source platforms (my favourites being WordPress and Magento). Self hosted means you host the files on your own server and opensource means the code the platform is built on can be edited. You can make as many changes as you want to it, and best of all its usually free and updated by an awesome community of developers.
Self-hosted opensource websites give you a lot more freedom of what you do with your site such as adding custom features and designs, the costs are lower long term, the plugins are often free or low cost, and future versions and security updates are actively managed by a community of developers. Self-hosting an opensource platform means you are the one in control of your website and are never tied to agency / developer because you can find trusted professionals to work on your site.
In some ways it adds risk (hiring someone to create the site if you don't want to do it yourself can be risky) but it also removes risk of you being tied to another person / agency who creates you a bespoke platform. Self hosting does require some new knowledge to understand it all but it isn't unachievable with a bit of help – you could even just outsource the setup and training.
My favourite self-hosted platforms – Magento and WooCommerce on WordPress.
Out of the 2 I much prefer Magento because of how easily you can scale the site up, but WooCommerce also has some great functionality and can be easily set up without too much technical knowledge which is advantageous to DIY'ers!
And what about hosted platforms?
On the other side of this ecommerce comparison are the paid hosted ecommerce platforms which are helping those new to business to get set up quicker than ever before with a low cost, sometimes free, setup. These are designed, built and hosted on servers by various companies and the user just pays a monthly fee which is usually scaled up in price as their ecommerce data storage, customer list, inventory and sales grow.
They often handle some of the more frustrating aspects of ecommerce to set up, such as payment facilities and shipping integration. You can be up and running in hours, and many have templates within the platform to choose from and because the software is maintained by the company who hosts it, you'll rarely have technical issues.
However, paid hosted platforms are expensive long term especially when you have scaled charges and your business grows, have many more restrictions and you are tied to that company because transfer to other platforms is not always seamless and has many issues.
My favourite hosted platforms – Shopify and Big Commerce.
Lets now look at some of the differences by category:
Although hosted platforms are much cheaper to start your ecommerce business initially, the monthly fee for some platforms in just 12 months can equal the cost of what you could pay for an self hosted ecommerce… let alone that cost over 2 / 3 years. If the only thing stopping you from having a self-hosted platform is the upfront cost, then are there any ways to spread the cost?
It is also worth noting that if you plan to keep this as a “hobby” business, don't plan to grow and need only something basic then it may be more cost effective to have a hosted platform.
You will be generally charged more for transactions made on a hosted platform rather than a self-hosted platform, however there are often some chunkier upfront costs for self-hosting an ecommerce such as an SSL certificate to make your site secure and setup costs for your merchant bank account to take payments.
If you are simply thinking you'd rather keep money in your pocket initially then consider the much greater costs down the line. The whole purpose of this article is to arm you with information so you can make the best choice for your business.
As you have no access to the source code in a hosted platform, this is one of the biggest putoffs. Picture the scene… you've found the perfect template design apart from one small (but super important part) that could be changed quite easily with html and css code edits. In a self-hosted platform – NO PROBLEM! You write a brief, you post it up on a freelancer website and problem solved. With a hosted template design, you have far less control and flexibility.
On some hosted platforms the really nice designs are VERY expensive, so you might end up limited to a basic template. Great templates for self-hosted platforms are rarely over $70 (£50).
Reporting, advanced analytics, and any kind of third party integration are limited with hosted platforms.
It is easy to add this kind of functionality to self-hosted platforms, and usually for free, but with hosted platforms things can get a little more complex.
I have come across hosted platforms which won't allow you to add ANY conversion / tracking pixels that are essential for remarketing campaigns or track conversions. Hosted platforms are beginning to catch up a little on that front, but not all are following suit yet – if you plan to use social media / search engine ads to market to your audience then double check you can actually track these on a hosted platform first else your results won't be measured and you'll waste a tonne of money!
Self-hosted platforms are only limited by what developers and designers can create – I haven't yet found a function that I couldn't create on a self hosted platform. You can of course submit feature requests to hosted platforms, but they may not always be implemented quickly – you can very easily find skilled professionals to work on your self-hosted platform and make your bespoke changes in next to no time.
Plugins / updates
The biggest issue I find with hosted platforms is that they call the shots on what plugins you use and you can't choose from as wider a market as you can with self-hosted. Hosted ecommerce plugins are generally more expensive, pack less features and they can't be edited. There have many occasions when I have tweaked a free or very low-cost plugin to deliver the “perfect fit” functionality for a client. I spoke with a business owner in my marketing group a few weeks back who was having trouble with abandoned carts on a hosted solution, the only plugin available simply wouldn't do what they needed to claw back those lost sales.
Data / transfer
A recent conversation with a business owner I know revealed that they were unable to extract the payment data they needed from their paid ecommerce platform, meaning a lot of stress of not being able to move to a better platform and a huge cost to manually add the data back on.
There are companies that will manage the transfer of data, but not all hosted platforms allow access to all information – double check what you're getting into before you signup!
Hosted or self-hosted ecommerce decision making tips…
1. Be armed with the facts, and investigate what happens to your costs if your business grows.
If growth is your intention, and for hobby businesses it often isn't, then is it better for you to invest the money in an opensource platform from the outset?
2. Plan ahead and research
Think about where your business will be in 12 months from now and the likely plugins and features you will need, and whether the plugins are even available for the platform you are considering! One day you might plan to add complex configurable products to your inventory – do the simple platforms have plugins to allow you to do that?
3. Ask an expert
That's what I'm here for! #asklaura here