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Choosing an Ecommerce Shopping Cart – Part 3

choosing an ecommerce shopping cartPrior to jumping into this article, I would encourage you to review Choosing an eCommerce Shopping Cart Part 1 and Part 2. Both have some helpful information that lead up to this article, in which we’ll cover the open source shopping cart ‘market’.

First and foremost- open-source shopping carts should almost never be your first foray into an ecommerce venture. The majority of the hundreds of businesses we’ve spoken to who have taken this approach, have regretted it.

Why?

The twin myths of FREE and FREEDOM.

Let’s address the first myth: free.

Most business owners are intelligent enough to know that nothing (or close to nothing) in life is free. But most business owners are equally uninformed when it comes to ecommerce, and so they accept a 3rd party developer’s promise that open source = free.

Sure, Magento, OS Commerce, Zencart and many others come at no cost to download but behind the scenes, the business owner has just accepted a myriad of costs that they didn’t intend. How so?

Only the core codebase of these platforms is free. This means that the business owner gets a decent software solution for $0 in cost. Beyond that, everything has a cost or a cost obligation to the business owner. Setup costs? Paid to a developer. Bug testing? Paid to a developer. Customizations? Paid to a developer. Maintenance / upkeep? Paid to a developer. Upgrades? Paid to a developer. Security issues? Paid to a developer.

In the SaaS realm which we covered in Part 2, the platform provider assumes many of these responsibilities for a nominal fee. In the open source world, the business owner has assumed responsibility for these things. Most business owners don’t clarify these costs or fully understand them before signing up for a new open source storefront. And they should!

A robust, high-performing open source shopping cart (for a small business) may require upwards of $10,000 a year in general support costs. That doesn’t necessarily account for more unique customizations or bigger, one-time upgrades. $200 a month to Bigcommerce or Shopify or 3dcart suddenly sounds more attractive, doesn’t it?

But that’s not the only cost that open source leaves on the table.

Open-source shopping carts offer a free product, to lure in the audiences, and usually charge for some other service to make money. However, if that other service doesn’t monetize effectively, the open source shopping cart, their company, and their in house development teams, often begin to wither. Without steady income, team sizes are reduced, new developments come less frequently, and changes in the ecommerce UX standards of consumers go unmet.

The majority of open source shopping carts suffer from this slow death on the vine. If you own an ecommerce storefront you can identify the symptoms. (a) Your developer has told you that something just can’t be done, (b) your developer has told you that this is a core function and you have to wait until the platform updates (and it never does), (c) or your developer is constantly saying that something is going to require ‘custom development’ and costs are ballooning. Other earmarks that your cart is dying include unfriendly administrative tools, slow adaptation to market trends, lack of communication and more.

Currently, the sad truth of the open source market is that MOST shopping carts here are in the death on the vine phase. Unless your business has a dedicated in-house team of developers to really own the open source solution post launch most platforms (Zencart / OS Commerce / OpenCart) offer little promise.

One of the few outliers is Magento Community Edition, and the anomaly there has been eBay. eBay now owns the platform outright and has significantly invested in its Enterprise software and other offerings that enhance the value of Magento to bigger businesses. Community Edition is predominantly a marketing draw for the business model, but is a hugely popular one.

Now that we’ve dispelled the myth of FREE, what about FREEDOM?

Open source carts’ second biggest draw is their flexibility and the perception that once you download the tool, you can do whatever you want to it, without risk. Thus, freedom is one of the biggest myths that exists pertaining to open source carts and one of its biggest truths.

Here is the truth- once you download an open source cart, it is for all intents and purposes, yours. You can (insomuch as you have the capability and competency to) make it do what you want.

However, you also lose one of the key advantages of open-source shopping carts over custom-built shopping carts. Community.

Sharing the development costs of new, complex features and challenges with hundreds or hundreds of thousands of other store owners allows you keep your costs below that of a full custom build. And that cost difference is significant!

One of Coalition’s custom shopping cart customers spends upwards of $250,000 per year in upkeep / upgrade / maintenance costs. The average Magento Community client spends less than $15,000.

In other words, just because you can, doesn’t mean you should.

When working with an open-source shopping cart, it’s important to play by the rules and keep your code as compliant as possible with the core software solution, or you will see costs increasingly balloon as you stray from the pack.

Thus, freedom on open-source shopping carts has some restrictions. Freedom isn’t free.

So what to look for in an open-source shopping cart? Which ones do we recommend?

Like Software as a Service ecommerce platforms, open-source shopping carts should be evaluated on the (a) health of the company and platform ecosystem, (b) the ease of use, (c) the features available, and (d) the cost of maintenance.

The Health of the eCommerce Company and its Ecosystem.

How do you effectively gauge this information? How do you know if the open source shopping cart is doing well? There are a few rudimentary tools that can help you get an easy grasp on how well an open source ecommerce solution and its ecosystem are doing.

Answer the questions below and you’ll get a clearer picture (an Excel spreadsheet can be easily created to get a good comparative view);

  1. How many stores does the ecommerce platform claim to have using it? This is a key piece of marketing information so most platforms of note, will brag about it. In the open source space, platforms generally should have in the tens of thousands.

  2. How does the platform bring income in? If they can’t or don’t seem to, then they aren’t likely to be around for long. How much income do they bring in from those sources? Sometimes the actual amount is published online and others it isn’t.

  3. When was the last update to the software? If its been months (anything over 3 months should be worrisome) consider it a sign of poor health. Ecommerce is FAST moving today and platforms should be responding quickly and frequently.

  4. How long typically goes between updates? If it averages months, consider it a sign of limited resources or a failing platform.

  5. How active is the online community? Look for tutorials / tips / tricks / support methods / extensions. If you find lots of different involved personnel, chances are the online community is alive and well. If you don’t see many blogs or forums focused on the platform, chances are the community has gone to greener pastures.

  6. How much has been invested in the platform and when? Funding is tricky business but as a general rule, people put money into things they believe will make them money. If they don’t see an opportunity to make money, they usually don’t invest. More successful open source shopping carts typically get more funding. And usually will have done more with it.

Ease of Use.

Ease of use is a lot easier to gauge. I usually recommend client’s test a dev or sandbox version of all platforms that they are considering. By and large, you can quickly get a good sense for what is easier to use and what is harder to use. If you can’t carry out common steps without a lot of outside help, it’s probably not easy to use. If you can figure out how to add products / create orders, etc without problem, chances are it’s easier to use.

You can also look for online commentary about the ease of use, but given the number of platforms with large affiliate networks, it’s probably not the most reliable way of getting feedback.

For gauging this metric, I’d focus more on active testing and less on reading up. Sadly, most open-source platforms ARE harder to use than software-as-a-service tools, so don’t expect the most simplistic things here.

Features Available.

Open-source shopping carts can be made to do almost anything. But the features that have been refined and added to the core development are often the ones that work most seamlessly. Start your evaluation by listing out the must-have features and how you expect they should operate. Then visit the open-source shopping cart platforms and play with their trials to see if they match up.

After that, move down a list of would like to haves, and compile which ones are included in the core and which ones are not.

After you’ve completed your list, start looking at what extensions are available and how many options exist for each. Pay attention to the extension pricing models along the way, since you could unintentionally add many hundreds of dollars in recurring billing to your store unintentionally.

Currently, Magento Community, due to its funding, popularity, and age, has one of the most extensive lists of ‘built in’ features and extensions. Because of eBay’s increasing efforts to corral the unregulated Community extension market, it also has some of the easiest and most reliable extensions for add on functionality.

Cost of Maintenance.

This is probably the trickiest to track down, but talking to developers and 3rd parties is often the way to get some insight here. Make sure you’re talking to people with meaningful experience on each platform: ask for portfolio links and use free tools to confirm that the sites are built on the codebase advertised. Draw from the following list of questions and you should get a decent picture of the cost of maintenance for any given open-source shopping cart:

  1. How many software updates are needed to the ecommerce cart each year? Use this to establish the multiplier you’re using for establishing costs.

  2. What are those updates typically covering? Assume that if the updates cover significant portions of the platform like orders / transaction processing / security, that the updates will take longer and have a greater likelihood for problems.

  3. How long do they take? Developers often are happy to quote low hourly rates and low hours and low completion times, but asking them for a committed start date / end date for things often punches holes in their sales material. Long updates over the course of days or weeks tend to cost quite a bit more than those that can be done in a matter of hours.

  4. How much do they cost? The other questions above should help set a baseline for this one. The cost should match up to the expectations they’ve already set. If updates are low maintenance and can happen quickly, then cost should be nominal. If they are challenging and often urgent, then costs here shouldn’t be nominal.

  5. Is there any downtime associated with those updates? Downtime for consumers means lost revenue for you. Its easy to think about how much we ‘pay’ as being the critical base of cost, but losing revenue and losing customers is often much more concerning as a cost than a few hundred dollars paid out.

Once you’ve got these questions answered, talk to some of the people who are using that shopping cart and ask for their insight into the same maintenance questions. They’re more likely to give you an honest opinion than someone who is aligned with a particular product or cart.

If you’re looking for the long and short of the article, the meat of it is this:

Open-source shopping carts can be extremely powerful, professional ecommerce tools. BUT don’t assume that the term “open source” means low cost and low barrier to entry. Companies anticipating using an open-source solution should anticipate a development cost at least 2x greater than comparable SaaS solutions AND should expect ongoing maintenance cost 3x to 4x higher than comparable SaaS solutions.

That being said, you may ask what are the right circumstances for choosing an open source shopping cart. The answer is that they do provide an edge in regards to functionality and flexibility. If that flexibility and functionality edge is required, they can be the less expensive option and may offer a competitive advantage.

If you’d like to speak with us about the leading open source shopping carts, their pros and cons, or what we see being the best fit for your business, give us a call at 310.827.3890!

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