When to switch E-Commerce platforms by Linda Bleijenberg
1. When you’re not on a SaaS platform yet
At Code we’re certain of one thing: life’s too short to run an e-commerce business on self-hosted open source software. Seriously. Get out of there as fast as you can. The number of horror stories we have heard from merchants that were hosting – and thus maintaining – their own e-commerce platform ... Just don’t.
Not to bash any competitors, but there are quite a lot of ex-Magento and ex-WooCommerce users among our clients. Fine platforms, both of them, but anyone who worked with them will know they have some quirks you do not necessarily want, as an ambitious e-commerce business.
15 signals it's time to move to SaaS
If you recognize any of these situations and sentiments, you’re definitely on the wrong side of open source and need to consider migrating to SaaS:
- Feeling there’s a constant risk of crashes and downtime, especially when traffic spikes. On the weekend, if you’re in luck. Costing you extra to have your devs fix it, if you can reach them.
- Hearing your employees complain a lot. User-friendliness? Only if you’re a seasoned developer.
- Having to ask developers for help with every little thing. Waiting for them to make time for your problem. Seeing their invoices arrive.
- Dreading the next update, for fear of the consequences for your webshop.
- Feeling like you’re busy troubleshooting most of the time, instead of moving your business forward.
- Having customers reach out to your help desk with mostly technical problems (and those are only the ones who contact you, imagine how many simply left your site).
- Not daring to touch anything, add a new plug-in or payment method, change the code, because the whole feels like a house of cards that can come crashing down anytime.
- Thinking up unstable patches or labour-intensive workarounds to get the platform to do something you want that it can’t do otherwise. Walking on eggshells as a result.
- Or worse: wanting to add some crucial new feature and concluding that it just cannot be done with your platform.
- Having to ‘patch the server’ at busy, lucrative times like BFCM, in hopes it will stay in the air long enough to get you the 30% of your yearly revenue you’re hoping to rake in (if your platform plays its part for once). Watching it crash anyway, despite all your efforts.
- Seeing your traffic drop and having that sinking feeling of something is up with your platform (again). Something complicated and expensive (again).
- Getting slightly alarming invoices from your devs with items on them that cost a lot but didn’t bring in any extra revenue. Like critical security updates. Or hours spent on problems you didn’t know you had.
- Being forced to migrate to a new version of the platform (Magento 2, anyone?) because the version you’re using is heading towards its end of life.
- Seeing your business stagnate, while watching competitors on a SaaS platform thrive and take great leaps forward - and making it look easy.
- Feeling like your platform is becoming an anachronism and that your business runs the same risk if you don’t leave the sinking ship asap.
2. When your current platform is too expensive
When aspiring replatformers hear of Shopify Plus fees for the first time (USD $2000 a month or 0,25% of your online revenue, whichever is greater), they often frown a bit. Especially when the whole revenue-sharing principle is explained.
At Code we get that the concept takes some getting used to, particularly when you’ve been using an open source platform so far - but we’re also convinced that this is a flexible, modern way of charging merchants for the use of an
outstanding, hassle-free e-commerce platform. By asking you to share revenue instead of charging a fixed sum, Shopify allows for your sales figures to fluctuate throughout the year.
But the most convincing argument for their pricing policy is the fact that, even with revenue sharing, Shopify is cheaper than most platforms - open source or not. To illustrate this, allow us to make a little detour on the topic of Total Cost of Ownership.
Total Cost of Ownership
What does your current platform cost, if you add it all up? To get a good estimate, you need to look a bit further than the price tag of your platform. Think total cost of ownership instead, which includes all costs and expenses to do with buying, implementing, and managing a platform:
Total Cost of Ownership (TCO) = purchase price + operating costs + maintenance costs
To get the most insightful result, make sure you add up the cost for a period of three years - and then compare it with the expected TCO of any new platform you’re considering. If you’re using open source software, there will be a lot more items in your calculation than there would be if you were on Shopify:
- Purchase price: includes the cost of setting up your platform, building your storefront, the design of your website, any connectors and integrations and custom features you need, licence fees (including those of third party plug-ins, apps and extensions), any revenue sharing, cost of hosting and servers and other hardware (POS hardware for instance).
- Operating costs: include the fees of developers for new features, cost of troubleshooting (you might even want to include missed revenue due to downtime, if you have estimates on that) and things like extended server capacity for peak traffic. Should ideally also include the cost of all the precious hours spent by you and everyone else in your company on platform-problem- solving, and the effect of technical delays in terms of missed revenue and wasted hours.
- Maintenance costs: include the cost of running updates, platform upgrades, server upgrades and maintenance, critical security patches.
When calculating Shopify’s TCO you can eliminate various items off the list. You won’t need:
- Servers: because Shopify is in the cloud and boasts a 99.9% uptime (hence no need for any server-related activity on your end);
- Hosting: because Shopify takes care of that for you;
- Platform updates: because with Shopify you always use the latest version of the platform
(without having to do or pay extra for anything);
- Platform upgrades: no more complete rebuilds because you are forced to migrate from version 1 to version 2;
- Security updates: because again: Shopify takes care of that for you;
- Extensive troubleshooting / crash management: because Shopify hardly causes any trouble - and never crashes;
- Developers: at least not for the day-to-day running of things - because your team can do that by itself, thanks to Shopify’s extreme user-friendliness.
Then there are some items and activities that will cost considerably less time and money with Shopify, such as:
- Customising your storefront: especially with Shopify’s recently launched Store 2.0 feature, setting it up takes less than a day;
- Adding extra functionality in the form of apps: all apps in the Shopify app store are compatible, because Shopify exercises some heavy control on what is allowed into the app store and requires app developers to stay compatible at all times;
- Automating stuff: with Shopify Flow and Shopify Launchpad you can easily automate repetitive manual tasks;
- Connecting and integrating: Thanks to its fast API, Shopify Plus allows for unlimited integration with other IT systems and platforms;
- Extra stores: Shopify Plus allows you to set up 9 extra stores without additional cost, to serve other regions or launch a B2B webshop. You can manage these stores from a single dashboard.
If you added everything up for your current platform and crossed off any items you won’t have with Shopify, or that won’t cost as much, we are pretty sure you will like what you see. And we are even more convinced that you will like what you don’t see - yet. Which is the way Shopify tends to open up whole new horizons for your business.
Learn more about the advantages of choosing Shopify as your E-Commerce platform.
3. When Magento 2 is draining your coffers
We would like to highlight a particular scenario that we’ve seen several times now, which is clients who come to us because they want to quit Magento 2. Yes, you read that correctly: they already went through a migration from Magento 1 to Magento 2, and were so dissatisfied with it that they decided to write off the six-figure investment and switch to Shopify - to prevent any more skyrocketing invoices from their developers. If they calculate Magento 2’s Total Cost of Ownership from this point on, the need for a platform migration becomes ever more urgent.
4. When you’re looking to scale your business - fast
The third main reason why brands come to us for a platform migration is because they are ambitious and hungry for more. They are seeing some major growth and want to capitalise on it to become market leaders. Yet their current platform can’t keep up, is not future-proof and too inflexible and expensive to enter new markets quickly.
They need features on their site that aren’t available in their platform and that are essential to further expand and future-proof their business. They worry that their platform will cease to be compatible with the updates of major third party solutions, in the near future. They have the impression that their platform isn’t innovating enough, and isn’t on top of the latest developments in the fast-changing world of e-commerce. In short, they fear their platform is failing them in a subtle (but ultimately costly) way.
Hence, they would rather make that investment now and move to a SaaS-based platform like Shopify, where they can be sure that an army of developers is continuously improving and releasing industry-leading technology for their platform, for years to come. With Shopify, they know their store will keep up with the latest in tech, as a matter of principle.
Ar you considering migrating to Shopify?
You’re always welcome to have a sparring session about your replatforming plans. Tell us what you have in mind, what your business is like, and what platform pains you currently have, and we’re happy to let you see what we can do.
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