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Comparing Shopify’s and BigCommerce’s Business Philosophies

Shopify and BigCommerce are long-running favorites at Coalition. For the last ten years, they’ve consistently rated near the top of our ranking lists for ecommerce platforms. Year in and year out, they deliver more value through reliable SaaS performance and feature-rich experiences.

With Shopify growing to become a household name in ecommerce and BigCommerce now moving towards its own IPO, many merchants are trying to understand what the major differences between the two platforms are.

Coalition’s COO, Jordan Brannon, dives into his perspectives on BigCommerce and Shopify’s business philosophies and how he has seen their approach to being industry-leading ecommerce platforms change over the years.

Take a look and read on below:

 

As mentioned above, we’re enthusiastic about both of these ecommerce platforms. If the world consisted only of these two options in ecommerce, we’d be better for it. Many ecommerce platforms just shouldn’t exist—they’re overpriced, unreliable, and poorly-equipped to support the diverse needs of ecommerce businesses in 2020. Shopify and BigCommerce are great selections for the majority of ecommerce businesses, and if you’re not using either of them, chances are you’d be improved by making the switch.

When we first started Coalition (in 2010), the core business philosophies of the two platforms were very similar. At varying points, we heard Mitch, Eddie, and Tobi say something to this effect:

“We want to provide 80% of the ecommerce features that are needed by 90% of the ecommerce market.”

That isn’t anything to sniff at either. Ecommerce businesses are insanely diverse. Trying to provide robust functionality to a large cross-section of them reliably and affordably was an insane challenge, and frankly one that no one had done well.

Both BigCommerce and Shopify changed that.

For the better part of our first five to six years working on the platforms, they were neck-and-neck competitors in terms of features, value, and performance.

About the time that Shopify IPO’ed, the underlying philosophies began to change for both of them.

Shopify pivoted to emphasize more of the true small business category in its marketing collateral and features. They avoided challenging feature additions that would benefit larger ecommerce businesses and more narrowly dialed in on features that made the platform more appealing to individuals hoping to capitalize on the apparent opportunity to start their own brands through side hustles, like so many social media influencers. Furthermore, Shopify began to invest in things that were outside of the core ecommerce shopping cart software and more aligned with operating costs associated with ecommerce.

Jordan describes this as Shopify’s attempt to be an ecommerce or commerce business solutions suite in much the same way that ERP software solutions provide wide-ranging support for various aspects of manufacturing and wholesale businesses.

This change in philosophy was evidenced by Shopify’s slower pace of cart feature advancement and bigger add-on developments that replaced other business solutions on which ecommerce merchants depended. Examples include the addition of Shop Pay, Shopify Fulfillment, Shop Pay Installments, Shop app, Shopify Email, and others. In each of those instances, Shopify didn’t do much to enhance the core ecommerce software offering; rather, it chose to invest in expense categories that typically took a greater percentage of ecommerce merchant’s money.

As an ecommerce shopping cart, Shopify seems to have believed that its take rate was always going to be capped at a smaller percent of their merchant’s expenditures so it invested in areas where more revenue could be had.

That does not mean that Shopify has suddenly fallen off a cliff as an ecommerce platform—far from it. For many merchants, it still remains one of the best possible solutions. This is especially true for micromerchants and small businesses looking to avoid too much decision-making or complexity in setting up their initial attempts at ecommerce. Having a single shopping cart, POS, payment gateway, email marketing solution, fulfillment network, and more bundled into one product dramatically simplifies the onboarding process and setup process for many merchants in that category.

If you’re a merchant with an existing warehouse, email marketing provider, or payment gateway, these add-ons don’t offer much value and can on occasion be more limiting in the perceived value of the ecommerce platform.

BigCommerce seemed to pivot in response to Shopify’s move downmarket (to focus on small merchants) by pivoting to focus on more established ecommerce businesses that have greater complexity in their requirements.

BigCommerce labelled this pivot with the slogan “Open SaaS“.

Frequently, it seems to confuse individuals new to the shopping cart. It often gets misread as meaning that BigCommerce doesn’t do as much on its own but enables you to do more through self-led customizations. That’s a disappointing error.

BigCommerce, in many ways, is one of the best value ecommerce platforms for established small businesses and larger enterprises. It offers more features at a more affordable pricepoint than any other ecommerce platform in the market today. The “Open SaaS” concept means that BigCommerce wants to create opportunities for merchants, app partners, and developers to build unique functionality that take it from doing 80% of what 90% of its merchants need it to, to doing 95% of what 95% of the ecommerce market could want it to do.

Largely, they’ve been successful. The downside to doing more is that the platform often feels harder to use than Shopify which is a drawback for more novice and beginner ecommerce store owners or teams.

The upside is that businesses with more complex selling channels, catalogs, and audiences often find that BigCommerce is capable of delivering more than what they could get from other SaaS platforms and is more limiting only than the most open of open source platforms.

We’re curious to see where BigCommerce goes as it closes on its IPO. Will it take on Shopify’s approach and pursue other revenue streams related to the ecommerce business solutions mindset? Or will it continue to invest in more robust functionalities for the core shopping cart while depending on existing third parties to provide payments, fulfillment, email, and other add-ons?

Either way you go, both platforms are likely to be a good fit! If you’d like to learn more about what platform is right for you, contact us today.

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