How to Decide Which Software You Need for Your Online Store – Licensed vs. Hosted eCommerce solutions software
Whether you're starting an online store for the 1st time or are an experienced eMerchant who is looking to transfer an existing store to a new platform, picking the right eCommerce solution software (aka Shopping Cart Software) can be tricky. There are hundreds of software options on the market and no clear leader amongst them because frankly, every online business has different needs and will need a different type of solution!
There are 2 main types of software to choose from, hosted or licensed. A hosted store will be 'hosted' and maintained by a 3rd party service and has a monthly package cost associated with it. A licensed web shop has a one-time software purchase cost and is self-hosted in the sense you are responsible for your own hosting and maintenance. Here's a break-down comparison of both that you can use to determine which option is best for your online store.
The Strengths of Hosted Software
- Instant Selling
Want to get your online store and products up asap?! With hosted eCommerce solutions, everything is set-up and ready to go. You simply sign-up, set-up your company info, products, shipping, etc. and start selling! Depending on the complexity of the company that you choose to partner with, this process can take a few hours, days, or weeks. Either way, it's usually much more time efficient than setting up licensed software is.
- Customer Service
It's comforting to know that, if you go hosted, there will be help when you need it. Though customer service hours and response times may vary, having eCom experts at your fingertips is a deciding factor for many online business owners when they're choosing between a hosted and licensed software.
- Bundled Package
Almost everything comes with your hosted solution package or can be easily added on in a simple upsell. In reputable companies, PCI-compliance is included, upgrades are automatic, popular features are regularly added and there are design templates for you to work with. In addition, the hosting company is responsible for server maintenance, backups, and troubleshooting.
For a start-up or low budget company, the one-time purchase price of trusted licensed software may be a lot to handle. Sure, monthly charges never end with hosted solutions but, they're usually lower cost and manageable. Just make sure that the extras you want come included, free of charge.
The Weaknesses of Hosted Software
- Hosted solutions lack the design freedom that licensed shops have and sometimes will not even allow HTML and CSS access.
- Monthly fees can be annoying, especially if there are other fees / percentages taken, as well.
- Your store only has the features, functions and tools that are provided by your hosting company.
- Your monthly fee will never stop. This can be especially annoying if there are other fees / percentages being charged, as well.
Examples of hosted solutions include AmeriCommerce, BigCommerce, Nexternal, AShop, ShoppingCartElite, AmazonWebstore, CoreCommerce and PinnacleCart.
The Strengths of Licensed Software
- Design Freedom
Since you control the environment of your store with licensed software, you can do whatever you want with the look and feel. Complete design freedom (if you know how to code it) is the major attraction of going with licensed software for your web shop and why this method is the most popular amongst those with technical coding skills!
- Feature Flexibility
When you 'own' your own software, you will be able to alter features, their functions and integrate the 3rd party tools that you want, instead of being stuck with the 'out-of-the-box' solution set.
Hosting your own domain allows you to switch companies without the hefty fees or risk of losing past data and records. Hosting companies want you to stay with them so they do not make it easy for you to leave when your company outgrows them or if you are unhappy with them.
Get out of monthly hosting fees with a licensed solution. By paying a larger, one-time fee, you can 'own' your own software and not be subject to pricing packages and upsells.
The Weaknesses of Licensed Software
- You must have the technical expertise to set-up and run your store (or hire a designer/developer on the side).
- You are your own customer service and must troubleshoot problems that arise.
- Store set-up and site design work will probably take much longer than a hosted shop would so it'll take you longer to start selling.
- Pricing for licensed software may be harder to handle for small and start-up businesses. Though you can get licensed software for cheap or even free, most reputable companies charge around $1000 for their one-time fee.
Examples of licensed software include CoreCommerce, PinnacleCart, ShopSite, MivaMerchant, X-Cart, and ZenCart.
If you're still undecided
Don't worry if you're still undecided after all of these facts. Free trials are offered with many eCom solutions and there are actually companies out there who offer BOTH licensed and hosted eCommerce solutions (Pinnacle Cart and Core Commerce)! This would allow you to start small with a hosted solution and work your way up to licensed software, with a hassle-free transition.
Once you've thought about which features you'll need for your online store you can experiment around with your top picks. In doing so, the best eCommerce solution for your internet business should soon become clear.
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Author Susan Delly is the owner of ZippyCart.com, an unbiased guide to expert shopping cart reviews and educational tool for online business owners. Though originally from the Midwest, Susan currently lives in the SF Bay area and loves to travel the world. In the spirit of global awareness, Kiva is her favorite charity!