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Ecommerce based on a Software-as-a-Service (SaaS) model has become increasingly popular for online retailers.
SaaS eCommerce platforms provide ready-made online store solutions through a subscription-based pricing structure rather than having retailers build and host their stores from scratch.
The scalability, security, ease of use, and lower entry costs of SaaS platforms make them an attractive option for low to mid-sized online businesses.
However, retailers need to evaluate aspects like flexibility, control, customization capabilities, and lock-in before choosing a SaaS eCommerce provider.
- Introduction to SaaS eCom Platforms
- Benefits and disadvantages of SaaS eCommerce
- Considerations before choosing a SaaS platform
- Top SaaS eComm platforms
- SaaS platforms vs open source
SaaS (Software as a Service) eCommerce refers to an online retail model where the eCommerce platform and infrastructure are hosted and managed by a third-party vendor.
Definition of SaaS eCommerce
SaaS eCommerce solutions are web-based platforms that allow retailers to build and manage online stores without needing to host the software themselves.
Everything from the technology to operations is handled by the SaaS provider.
Retailers pay a recurring fee to use the hosted eCommerce capabilities on a plug-and-play basis.
With a SaaS model, retailers don't have to worry about handling technical complexities, security, or scalability issues.
The SaaS vendor takes care of maintenance, updates, and ensuring uptime and performance.
This makes SaaS eCommerce platforms quick and easy to launch.
Key Components of a SaaS eCommerce Platform
Some of the major components and capabilities of a full-featured SaaS eCommerce platform include:
- Store builder with templates to customize online storefront
- Product information management
- Order processing and management
- Flexible payment gateways
- Digital marketing tools
- Built-in CRM and analytics
- Scalable cloud hosting
- PCI compliance and security
- Integrations with shipping carriers, ERPs, etc.
- Dedicated customer support
The all-in-one model allows retailers to get everything needed to operate an online business from their SaaS vendor.
A software-as-a-service (SaaS) ecommerce platform offers many advantages over traditional on-premise ecommerce solutions.
Some of the key benefits of SaaS ecommerce include:
Easy Management
SaaS ecommerce platforms are hosted and managed by the service provider.
This frees online businesses from the burden of managing servers, applying security patches, optimizing performance, and handling other technical tasks.
With a SaaS solution, you can focus on sales, marketing, and business growth rather than IT management.
Readymade Products to Use
Leading SaaS platforms come packed with ready-to-use features for building an online storefront.
This includes themes, templates, shopping carts, payment gateways, shipping integrations, and much more.
You don't have to develop these from scratch or pay developers to customize them. You can use the built-in tools to quickly launch and run your ecommerce operations.
Scalability
A major benefit of SaaS ecommerce platforms is easy and flexible scalability.
Whether you experience sudden spikes in traffic or need to support business growth, SaaS platforms can quickly scale up or down to meet your changing requirements.
This on-demand scalability ensures your ecommerce store runs smoothly during traffic surges and holiday seasons.
Security and PCI Compliance
Data security is a top concern while running an online business.
Cost Effectiveness
The subscription-based pricing of SaaS solutions spreads costs over time, making it budget-friendly for small businesses.
There are no heavy upfront license fees or infrastructure investments. You pay only for the computing resources used based on business needs and revenue.
This predictable cost structure helps manage IT expenses better.
While SaaS eCommerce platforms offer many benefits, they also come with some downsides to consider:
Limited Control
One of the main disadvantages of SaaS platforms is the limited control and flexibility merchants have over their stores.
With SaaS solutions, you rely on the provider for updates and customizations.
If you want to add new features or optimize certain processes, you need to put in a request and wait for the SaaS vendor to implement it.
Little Room for Migration
Most SaaS platforms have proprietary systems and data structures, so migrating to a new platform means recreating the store from scratch.
Growing Costs Over Time
While SaaS models have lower upfront costs compared to on-premise software, the monthly fees can accumulate over years of usage.
Vendors may also increase prices unpredictably or charge more for add-ons.
Without control over the technology, you can't optimize hosting and operational costs. Plan for potential fee hikes in your budget.
In summary, the lack of control, flexibility, and ownership in SaaS ecommerce can negatively impact merchants in the long run.
Carefully weigh the pros and cons before opting for a hosted platform over open-source solutions.
Conduct due diligence on the vendor's offerings and pricing structure.
Before deciding on a SaaS ecommerce platform, merchants should carefully evaluate a few key factors:
Know Your Business Requirements
The first step is to clearly outline your business needs and priorities.
Consider things like:
- Expected order volume and sales projections
- Peak traffic times and scalability needs
- Types of products you will sell
- Inventory management requirements
- Shipping and fulfillment workflow
- Budget constraints
Having a clear picture of your must-have features and functionality will help narrow down the list of potential SaaS platforms.
Gather Real Users' Feedback
Look for genuine user reviews of the SaaS platforms you're considering.
Check independent review sites to see real customer experiences with onboarding, platform capabilities, customer support, and ease of use.
Beware of fake positive reviews.
Try the Demo First!
Don't commit to any platform without thoroughly test-driving it first.
Sign up for a free trial account to create products, process orders, and access the admin dashboard.
Get a feel for the user interface, configuration options, and reporting.
Sign a Service Level Agreement
Also, confirm what kind of ongoing customer support is offered.
Evaluate Flexibility and Exit Strategy
Consider how flexible the platform will be if you need to add integrations, customize features, or scale order volumes later on.
Also, understand what would be involved if you ever needed to migrate off the platform. Some providers lock in merchants, so have an exit strategy.
Taking the time upfront to carefully evaluate your options will ensure you select the right SaaS ecommerce solution for your business needs and set your online store up for long-term success.
Adobe Commerce
It provides powerful merchandising, content management, and shopper personalization capabilities.
The AI-powered recommendations and automation help deliver personalized shopping experiences.
It also offers advanced order management and fulfillment functionalities.
Dynamics 365 Commerce
It unifies back-office, in-store, call center, and digital experiences.
Key capabilities include merchandising, content management, order processing, loyalty programs, and omnichannel fulfillment.
It provides easy integrations with other Microsoft solutions.
Salesforce Commerce Cloud
Salesforce Commerce Cloud is a robust, cloud-based ecommerce solution built on the Salesforce platform.
The Einstein AI helps deliver personalized and optimized shopping experiences.
It also enables B2B functionalities like account-based access, approvals, and quoting.
Shopify Plus
Shopify Plus is Shopify’s enterprise ecommerce platform designed for high-volume merchants and brands.
It provides powerful storefront management and customization capabilities.
The Shopify Scripts allow advanced customizations and bespoke experiences. It also offers dedicated support and volume discounts for high transaction volumes.
The Shopify App Store has over 4,000 apps for added capabilities.
Commercetools
Commercetools is an API-first, cloud-native SaaS ecommerce platform built on microservices architecture.
It is designed for composable commerce with headless storefronts and best-of-breed integrations.
The cutting-edge technology provides flexibility and scalability for high-growth brands.
| Parameter | SaaS eCommerce | Open Source Platforms |
| Hosting | Hosted on the vendor's servers. Merchants don't need to worry about hosting, security, backups, etc. | Merchants need to set up their hosting and servers. Requires more technical skills |
| Initial Setup | Very fast and easy set up, can be ready to sell in a few hours. Intuitive dashboards for store setup | Requires developers and experts to install, customize, and launch the store. More complex |
| Customization | Allows limited customization without coding knowledge. Additional custom features require developer help | Highly customizable by editing source code. Gives more control but needs developers |
| Cost Structure | Monthly or annual subscription plans based on business needs. Predictable operating cost. | Has significant startup costs. Ongoing cost for hosting, maintenance, and developer fees. |
| Maintenance and Updates | Handled automatically by the vendor. Merchants get all the latest features and security patches. | Merchants need to manually update core software and extensions. Requires technical resources |
In summary, SaaS eCommerce platforms offer a faster go-to-market capability even for non-technical users.
However open source platforms provide greater control and customizability for advanced users.
Conclusion
SaaS eCommerce platforms offer merchants a convenient way to set up and manage an online store without needing to host and maintain the infrastructure and software themselves.
However, potential downsides exist too, like limited control and customization options, the potential for rising costs over time as the business grows, and possible difficulties migrating away from the platform later on.
When choosing a SaaS platform, key considerations include understanding your requirements around customization, growth plans, and desired level of control.
Also important is gathering real customer feedback, trying demos first, evaluating flexibility and exit options in contracts, and signing clear SLAs.
Looking ahead, the SaaS eCommerce market is poised for strong continued growth as more businesses move their operations online and seek the convenience of managed hosted platforms.