Victor James

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Understanding the Different Types of Ecommerce Software

Largely speaking, the term “commerce” refers to buying and selling of goods, both on a small and large scale. When you put an electronic component to it, it becomes eCommerce. In other words, eCommerce is buying and selling goods online.

But you already knew that. When was the last time you used an eCommerce platform to buy something? I know it’s pretty recent. We can’t deny the fact that we’re increasingly getting more dependent on eCommerce platforms simply because they’re so accessible. You no longer have to visit the stores to get a product.

ecommerce software

But what about the other side of the coin? What about eCommerce solutions themselves? What if you want to launch a business online selling products to your own customers?

That’s where eCommerce software comes into play. You’ll need one no matter what scale you plan on operating. In this post, I’ll shed light on what they are, all of their different types, the features you should look for before investing, and everything in between.

What is Ccommerce Software?

There are 2 major ways you can approach an online ecommerce store. You can develop everything from the ground up. Or, your can opt for ecommerce software to do the job for you.

For every one of you out there, I highly recommend doing the latter. Developing an ecommerce website from the ground up is not only complex but also going to put a hole in your bank account. Unless you’re ready to throw your life savings into the online store, you should take my advice.

An ecommerce software, in short, is the hero behind the scenes that let you operate your business. From inventory management system to customer support to payment processing, reliable ecommerce software does it all, on a budget.

Don’t worry too much about it right now. As I explain the different features of these solutions, it’ll start making more sense to you about why you should invest in one.

Benefits of Investing in an eCommerce Platform

There are countless benefits to letting a battle-tested formula work for your ecommerce site. There’s no point in trying to reinvent the wheel when you can take the shortcut. Unlike other situations in life, taking this shortcut will only accelerate your growth.

Let me list some of the obvious benefits you’re going to notice during the building phase of your business.

Quick Start

A common saying in the quest for success is that “Starting is the hardest part”. You can practically bypass the “hardest” part with an ecommerce software solution. It’s still going to be hard, but not to the point of breaking your soul.

You start with the website builder. In this case, the website is also your online store. Many of these ecommerce solutions will also offer web hosting services to ensure central control in a single interface.

Using the website builder comes naturally to most people. The drag-and-drop functionality allows you to visually put the pieces together. Within days if not hours, you’ll have a functional ecommerce store on the internet.

Lower Operational Cost

Think about how much money you would spend if you decided to run a brick-and-mortar store. There is rent. Then there are utilities, employee salaries, insurance, and whatnot.

If you try to do the same thing on the internet, think of how many additional points of friction you’re creating. You have to hire a website developer, a graphics designer, a webmaster, a marketing person, and who knows how many other people.

Ecommerce software, on the other hand, will do everything, all at once. And you’re in control. Sure, ecommerce software solutions cost quite a bit. But when you consider all the costs you would have incurred otherwise to run small businesses, it makes them worth every penny.

24/7 Business

When you take control of your online business, you don’t answer to anyone. You don’t have to stick to any specific schedule. Everything is customizable as long as you’re up for configuring it.

Running an ecommerce platform is one of the most liberating career choices out there. And you can take it to the next level by keeping control of the operations with a full-fledged ecommerce solution.

Integration with Other Tools

I would be lying if I said there is one tool that does it all for a business. There isn’t. You’ll always need to use some other software solution in tandem with a supposedly “complete” solution.

That’s where integration comes into play. In tech terms, integration means connecting with other software platforms to achieve a goal you otherwise cannot.

For example, the software of your choice may be lacking on the email marketing front. Instead of using the email marketing tools separately, wouldn’t it be better if you can integrate them right into the ecommerce solution?

No Cap on How Much You Can Sell

Many “innovative” ecommerce back-end solutions are hard to scale. Why? Because they’re so complex. There are thousands of lines of code that only a qualified developer can tweak. You have to go through the same development process over and over again. It’s annoying!

But when you go for a hosted ecommerce software, it’s infinitely scalable. Worst case scenario, you pay for the next subscription package.

This gives you the freedom to keep adding products or different versions of the products as you grow over time. Of course, you’re also increasing the traffic to your own website by attracting a larger audience.

Seamless Payments Processing for Your Online Business

Payment processing is a major pain point for ecommerce owners. Customers want to pay with all kinds of methods. But for the business owner, it’s not feasible to partner with all the payment processing companies separately.

In most cases, the ecommerce platform provider you choose will take care of the online payments. There are clever systems in place that can aggregate payments done on multiple gateways and funnel them to your chosen method.

Just make sure you’re investing in a good SSL certificate on your store. Otherwise, when you process online payments, the customer is at risk of compromising their sensitive data online. Most importantly, it won’t look too good on your business.

More on it later.

Types of Available eCommerce Software?

Purchasing ecommerce software may sound very simple on paper. But there are some inherent decision mistakes entrepreneurs often make. The first in line is choosing the wrong type of software.

I understand why it’s confusing. There is no concrete rule in place that classifies the types of ecommerce software. You’ll find all schools of thought on the internet. So, let’s just not go there.

Instead, let me list some of the most popular ones and ones I’ve used personally. I’ll try my best to paint a picture for all of you.

Software-as-a-Service (SaaS)

There’s no way you haven’t heard the term “SaaS” in the last few years. It’s the new hotshot in practically every industry. SaaS stands for Software-as-a-Service. This is essentially a model of delivering software solutions over the cloud.

When put in the ecommerce context, SaaS is a great model as you don’t have to worry about hardware limitations on your devices. All the operations are hosted in the cloud.

The best part of SaaS ecommerce is that there is little to no maintenance needed. Upgrading or downgrading a plan is as simple as a click. There is no need to shut down your store or rewire everything every time you change something.

Platform-as-a-Service (PaaS)

The differences between SaaS and PaaS are quite confusing so bear with me. Instead of focusing on the whole software aspect, PaaS services focus more on the hardware and software that powers everything.

PaaS stands for Platform-as-a-Service where you’re getting the platform to create your service. Microsoft Azure is a great example of a PaaS. Users need little more knowledge to operate PaaS platforms compared to SaaS platforms.

The primary benefit of getting a PaaS system is the sheer freedom. You don’t have to give in to any of the existing templates. As long as you have the basics covered, you’re free to create your online business in any way, shape, or form you want.

Headless Ecommerce

The name may sound bizarre to many of you but there is an interesting justification behind it. This architecture is known for decoupling the front end of your online store from the back end. The benefit is that you can work on them separately without shutting down the other one.

Most experts believe that headless is the way to go if you want to launch your hosted ecommerce platform in the shortest possible time. It’s perfect for small businesses who want to sell online alongside a physical store. Thanks to the decoupling, you can also expect better website optimization.

On-Premise Platforms

Both SaaS and PaaS systems are cloud-based, meaning the software actually runs in remote data centers. On-premise platforms, however, run on hardware present at the premise of the business. If you run your store from home, the software will run on your home PC.

This is where owning an ecommerce platform starts getting more complicated. You have to factor in the hardware requirements to run the system smoothly. Not only that but you also have to ensure 24/7 power and internet backup to not struggle with downtime.

Generally, I don’t recommend on-premise systems, especially for an ecommerce business. There are enough things already to take care of. You won’t want to deal with the technical aspect of your ecommerce website after dealing with all that.

Unless you like it, of course.

Key Features to Look for in an Ecommerce Software

At their core, all ecommerce platforms are the same. At least, they operate based on the same principle and customer journey.

If I have to explain the journey in a few words, I’d ask you to imagine a product you need and then search for it online. You get a couple of good results on Google and start looking into the purchase.

In most cases, you’ll find the product on an ecommerce platform. You go to the product page to read the descriptions. If you’re happy with what you’re seeing, you click the “Buy Now” button.

seo tools for ecommerce

From there, you go to the checkout page to make a payment and enter the delivery details.

Now, when looking into popular ecommerce platforms, you need to ensure that you have access to tools that allow you to streamline the whole journey. Your goal is to make the visitor feel like they’re getting answers as they progress through the funnel.

What are those features that make or break ecommerce sites, you ask? Say no more because I have the answer right here.

Marketing Tools

Marketing is one of the most neglected aspects of modern-day ecommerce business. If people need the product, they’ll come searching, right? Well, no. That’s not how you make money.

You make money in ecommerce by pushing your products to the right eyes, at the right time. The only way to do it right is with marketing. This is why the presence of marketing tools made it to the first position in my guide.

It can be email marketing, social media campaigns, cold outreach, blogs, or whatever. It doesn’t matter as long as you have the right marketing tools in your virtual shed. The best ecommerce platform providers often offer these tools by default.

Central Database

A database is where all the data is stored in a structured and meaningful way. Ecommerce companies cannot run without a database because they need all the product information as well as the customer information to be readily available.

Let me illustrate how a database works for ecommerce platforms. Obviously, you have all the products, images, descriptions, prices, etc. structured on the database.

Now, when a customer purchases something, he/she/they enter information like their name, email address, delivery address, billing address, etc.

To optimize the customer’s journey, it’s crucial that you take notes of these pieces of information. Because the next time the same customer tries to purchase something, they don’t want to enter the same details again. If they’re not getting the recognition, why would they come back?

Having access to the right types of ecommerce will determine the nature of your database. As long as you’re going for a SaaS or a PaaS product, they come with databases integrated.

For on-premise software, make sure you hire a good database manager.

Website Builder and Hosting Services

At the end of the day, your store is a website on the internet for the users. So, it needs to function like one. To start with, you need a domain (the name of your website), a hosting service (to store the site data), and a website builder to create the interface.

Ideally, the best ecommerce solutions should include all of these features. You can buy a domain, get a recommended hosting service, and use the software’s website builder to create the store UI.

Of course, there are options to get everything separately as well. If you’re an informed user and understand server specifications, you’re free to get the services from a third-party hosting provider.

Automated Checkout

The last phase of a customer’s buying journey is the checkout. This has to be automated and the feature must be available on the software. This means the customers can add all the required details and complete the payment without any interruptions or interventions from you.

If you come across an ecommerce platform provider that doesn’t automate the checkout process, my advice would be to steer clear of it.

SEO Tools

The scaling success of an ecommerce platform depends on the traffic it can pull in organically. Your store must pop up on the customers’ radar. This is where search engine optimization comes into play. Yes, the infamous SEO.

You need access to reliable SEO features like metadata, load speed optimization, image formatting, etc., to make sure that Google can crawl your site properly.

Even if the ecommerce solution you choose doesn’t have SEO tools, you need the plugin integration facility. This will allow you to connect third-party integrations for SEO right to the ecommerce features.

Scalability

This is a big one. You don’t want to keep your store in the same place forever, right? You want to grow. A common mistake I see people making is choosing a solution that’s not scalable.

By the time they realize it, it’s too late. They now have to start everything from scratch.

The good news is that the majority of SaaS and PaaS services these days have subscription-based models. It means you start at the bottom tier which is often what you need when you’re just starting out.

As your business grows and you need more capacity, you can just switch to the next tier of the software solution. In fact, most of the providers have custom plans that you can dial in just as you like it. This may include beefier web hosting, larger cloud storage, more payment processing power, and whatnot.

Easy to Use

I know this should’ve been way higher on the list. But hey, you’re here to learn business development right? So, why not take the time to master the software even if the learning curve is a bit steep?

If you don’t want to, look into this feature. But there’s no real way to tell whether a solution is easy to use or not unless you use it.

A clever hack I often use is reading reviews on forums. There are plenty of ecommerce owners’ forums out there that you can check. Rest assured that you’ll find like-minded people talking about business operations, including what ecommerce software they’re using and why.

Data Analytics

You need access to data in the 21st century. This is non-negotiable. To make informed decisions and to add to these decisions repeatedly, there is no alternative to business data.

When you know what your 5 best-selling products are, you no longer have to market 1,000 products. Different ecommerce businesses are known for different ranges of products. You don’t have to be the jack of all trades.

But to know which products to focus on, you need to keep an eye on user behavior. Impressions, clicks, engagement, abandoned carts, etc. all are important KPIs. It goes even for the best ecommerce.

API Call Volumes

I’m entering the technical territory here. API stands for Application Programming Interface. It’s a very commonly used term in the software space.

APIs work based on requests and responses. One API requests a service and the other API responds to it. If the programming is not compatible, the APIs will not work with each other.

For example, when you add your bank account details to your ecommerce software for payment processing, the APIs by your bank are in action.

API call volume refers to how many APIs can the software call per unit of time. Some ecommerce software, like Shopify, limits how much API call volume is necessary. BigCommerce, on the other hand, doesn’t cap it at all!

Security

When you’re dealing with a large audience and lots of product money, security is an important aspect. Then there is customer data like their email addresses, physical addresses, phone numbers, payment details, and whatnot. In the wrong hands, this data can wreak havoc and ruin your online reputation like scandals ruin celebrities.

When choosing ecommerce software, you must give special attention to security features. PCI compliance is one of the basic ecommerce features, commonly found across SaaS and PaaS products.

A good SSL certificate is a good place to start for website security. Then there are backups, scanning for malicious content, password protection, and lots of other areas.

In case you’re not well-versed in the security terms, I highly recommend that you consult with the customer support of any ecommerce platform. They’ve been very helpful to me every time I asked questions. I hope they’ll be to you too.

Things that Don’t USually Come to Mind

As you glaze across different guides on how to choose the best ecommerce platforms, you’ll come across a similar set of suggestions. But I have something to double down.

There are many things you’ll forget or won’t know until you face them while running an ecommerce platform. I have listed the top 5 of such things that no one tells you about.

Set a Budget for Your Online Store

Yes, you still need to set a budget. I know the development of an open-source ecommerce platform cost is significantly lower than developing a system from the ground up. But you still can’t let your expenses fly off the handle with all those plugins.

Set a realistic budget depending on how you want to grow the business. Then look for options within that budget. If there is something you really want but can’t get in that budget, you can move the numbers a little bit. I wouldn’t go over 10%.

There’s Maintenance

No matter how automated the system is, an ecommerce platform will still need maintenance. It’s especially true for open-source ecommerce software as they lack many features.

You need to evaluable whether you have the time and experience to perform the maintenance on your own. It’s never something super complicated. But it may be complicated enough to take a few hours out of your schedule every week.

Yearly/Monthly Cost

Apart from the upfront cost of making ecommerce software work, there are recurring costs, usually in the disguise of subscription fees. You pay the fees for a lot of months in advance so it’s important to know your monthly cost.

Of course, if you keep all the overhead costs that way, it’s not a mandatory step. But if you ask me, keeping monthly track is a better solution.

I forgot to mention that there are free ecommerce platform providers too. If I were you, I wouldn’t even think of using them. An ecommerce offering is a long-term commitment. You don’t want to taint the experience with a sub-par e-commerce platform, do you?

Can You Program?

Many open source ecommerce platforms, especially PaaS products, often require the users to know the basics of programming. You may need to run occasional terminal scripts here and there during the setup process.

You can see why it’s important to know in advance. If you don’t know or don’t want to code, you need to choose the types of ecommerce accordingly.

Domain/Hosting Renewal Cost

Apart from the ecommerce software, you’re also using the domain and hosting. When starting out, you may buy a fancy domain that costs a fortune for 4 straight years.

The thing is, 4 years is not a very long time in the ecommerce space. If the domain or hosting renewal is too expensive, it may be time to think about other solutions.

Of course, you need to think before you act. You surely don’t want to build the reputation for a domain over 4 years only to change it to something else.

Top Ecommerce Platforms in My Experience

I’ve covered the most important points you need to know before launching your ecommerce business. The only thing that’s lefts is the ecommerce platforms themselves.

Here are the top solutions ecommerce owners from around the world are using right now.

Shopify

Shopify needs no introduction in the world of ecommerce. It’s simple to use but has a very complex backend. It’s robust yet cost-effective. Thousands of online stores are powered by Shopify.

In terms of ecommerce functionality, Shopify allows you to integrate email marketing, CRM, abandoned card record, process payments, and whatnot. It’s also a hosted ecommerce software which means you don’t have to spend extra.

best ecommerce solution out there

Then there is Shop Pay, the most loved checkout integration in all of ecommerce. It not only takes care of the payment gateway but also covers fulfillment. Well, in commerce terms, fulfillment refers to the shipping and handling of physical products.

You can get your store up and running for as low as $25/month. Over time, it can go up to $399/month for the Advanced Commerce feature. There is also a 3-day free trial for new users.

BigCommerce

BigCommerce doesn’t get the love it deserves and it makes me sad. I admit the ecommerce platform is more suited to enterprise-grade online business than a single-man online store.

Another reason BigCommerce doesn’t get as much exposure is its limited customizability. Don’t get me wrong. You can still customize the sh*t out of your online store. But the spectrum is not as broad as other services such as Shopify.

On the bright side, BigCommerce allows cross-border sales which means you can sell to anyone and everyone on the internet. Other necessary tools for SEO features, social camping, and marketplace plugins come default with BigCommerce.

top e-commerce platform

One thing I really like is the 15-day free trial. You can really try it before paying the $29.95/month starting price. The Pro version costs $269.96/month. Enterprise businesses, however, need to speak to sales to get custom pricing.

WooCommerce

If there is one name as popular as Shopify among wannabe ecommerce owners, it’s WooCommerce. If you want to base your online store on WordPress, it doesn’t get any better than WooCommerce.

The best part is WooCommerce is not even a full-fledged software but a plugin for WordPress. If you’re already used to WordPress and how to use third party plugins for different functions, you’ll love using WooCommerce for your online store.

But it comes with its downsides as well. Having all kinds of plugins installed may slow your store down. Worst case scenario, you have a hard time troubleshooting if something goes wrong.

As it’s a plugin, WooCommerce is surprisingly affordable. The maximum you can expect to pay is $30/month. There is no free trial per se, but you get a 30-day money-back guarantee.

Wix

Wix has made quite a name for itself in a very short time. It’s known for its zero transaction fees features. Yes, you don’t pay anything extra for payment gateway usage.

But that’s not the only thing Wix is famous for. It’s incredibly easy to use, even the website builder. It handles email marketing, and multi-channel selling, keeps track of orders, and processes payments like a boss.

Wix e commerce platform

But inventory management, one of the core needs of any online store, is missing from Wix. There are some third-party integrations you can look into but none of them are tested by a large audience.

Another downside is that there is no free trial for you to test the solution before investing. The Business Basic package starts at a mere $23/month, followed by Business Unlimited at $27/month, and Business VIP at $49/month.

If it’s the store you want to focus on, Wix may be a great fit for you. But if you want an all-in-one solution, it’s not enough in my opinion.

Adobe Commerce

Not many people know that Adobe, the company known for its editing software suite, also has products in the ecommerce space. Adobe Commerce is a very customizable tool for businesses of all levels.

The first hiccup you’ll face is when it comes time to get your web hosting. The software itself doesn’t offer any. You have to do your own research and find a reliable web hosting service.

Adobe customer support

It’s also limited in terms of the channels you can sell on. You do have the option to integrate as many outside APIs as you need for your online store, but the leg work is not worth it for me.

There is no fixed-priced package for Adobe Commerce. You only get custom pricing depending on the needs of your online store.

FAQ

What is e-commerce software?

Ecommerce software is a software solution at lets you control and operate your ecommerce platforms. They come with benefits like marketing integration, web hosting, website builder (drag and drop), and plenty of other ecommerce features.

Who uses ecommerce software?

Anyone with an intention to open an online store can use e-commerce software. This is the better and faster alternative to getting your e-commerce website ready for search engines. The needs may vary from business to business, but the basic commerce of the ecosystem remains the same.

What are the four main types of e-commerce?

As I explained in my post, there are four main types of e-commerce. They are SaaS, PaaS, Headless eCommerce, and On-Premise. They can be a mix of open source ecommerce platforms and subscription models.

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