Hidden Costs in SaaS eCommerce Platforms

3 questions to ask yourself when considering the cost of a SaaS platform.

With online sales climbing 14% to $459 billion in the United States and over $2 trillion globally, digital commerce shows no sign of slowing down. In this highly competitive market, merchants must continually improve their costs. At first glance, a SaaS platform may seem less expensive but there are hidden costs that must be considered.

What is SaaS?

SaaS stands for "Software as a Service" and refers to hosted (not downloaded) software that merchants can use for a subscription (monthly or yearly). In this case, a SaaS platform is e-commerce software used to create virtual stores. Because it is hosted on the software company's servers, merchants have very little control over the functionality and features, as it exists on a one-size-fits-all basis. This may seem appealing to companies just starting out and learning about eCommerce, but we know that growing merchants feel constrained. By researching which e-commerce platform is best for you, there are 3 questions to ask yourself.

cropped SaaS

1. Can I "Customize" my shop?

Fostering a brand lifestyle and content management is essential for small brands hoping to differentiate themselves. To execute a differentiated strategy, you must create a unique user experience, and SaaS platforms only have a limited reach in this regard.

SaaS platforms only provide the basic features that have become industry standard for eCommerce, but are not built for the complexity or creativity needed to display and sell your products. Let's use the example of configurable products. SsaS can only process some basic options (eg: size, color) for the product. But what happens when you need to offer more options for your customers? What if you need to promote a particular group of customers. Can I generate experiences for each type of user? If your marketing team needs to develop an interactive application for your clients?

Integration to other systems is another type of customization that generates direct costs. Most businesses must integrate, for example, systems for managing inventories and prices. If the SaaS platform cannot be integrated with your current tools, you will have to invest in changing your processes and systems. At what additional cost?

2. Can I get help?

As a merchant, there is no worse feeling than feeling without support when you need it. One of the reasons to keep prices low on SaaS is that they only offer limited or no support. Even though your site works well, at some point you will want to improve its appearance, create new experiences or extend existing ones. Normally SaaS platforms tend to be closed source and proprietary so finding support is much more expensive.

3. Can I grow up?

Saas can be an easy and cheap way to get started in eCommerce, but it's not necessarily the best path to growth in the long term. SaaS platforms are sometimes impossible to integrate with other systems that you need to use in the future to extend your site or meet the expectations of your consumers. These platforms are also known for their limited SKU and processing capacity and inability to handle multiple lines in a single instance. This means that you will not be able to expand your product catalog, or easily expand into the international market or create new lines/brands in the future.

Ultimately it's a matter of thinking carefully: It can be tempting to start cheaply with a SaaS platform and later migrate to a more flexible, proprietary and scalable one, but such migration costs can turn out to be much higher than expected. Be clear about the costs of moving from one platform to another before investing in a solution for your eCommerce. Choose the platform that meets your needs from the beginning and always think long term.

By: Joseph Angersoen
18 de June de 2018
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With more than 20 years of experience working in technology, web design and development, marketing and data analysis. We offer solutions to the challenges of today's competitiveness in an increasingly digitized world.

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