June 6, 2016
by Lori Shecter

Comparing Magento to a SaaS E-Commerce Solution

Magento-banner02

We Are Immediate has developed e-commerce stores in both customized Magento (Seour Press Release) and Woo-Commerce, as well as Shopify and Big Commerce. People ask us what the difference is and there are a few. Here’s what you need to know:

1: Startup Costs: Costs to set-up an e-commerce store in Shopify or Big-Commerce are considerably less. If you have the time, and most people don’t, you can set it up yourself for free. The monthly charges range anywhere from $30 -$100 (on up) depending on the level of functionality. Your gateway and processing fees add an additional percentage per store. We Are Immediate sets up SaaS-based stores starting at $2500.

Magento, on the other hand, has significant start-up costs and most U.S. based developers (including us) won’t even consider taking on Magento development for less than $20,000. The majority of reputable Magento shops in the US start at $50K and up.

2: Ownership: The superiority of functionality, customization, and ownership can’t be replicated when you own the code, as is the case with Magento. With Shopify, Big Commerce, and other SaaS services, you are renting the code for a subscription fee.

3: Ease of Use: My opinion, as both a CEO and constant user of these content management systems is that Shopify and Big Commerce are easier to content manage than Magento. However, your developer can easily show you complete instructions and provide a video instruction manual on how to use Magento. The benefit of the SaaS services is that they come with 24 hour support, so, if you are like me, and want to do some work at midnight, well your support team is there.

4: Discounts and Coupons: Magento offers more robust discounting than Shopify. Magento also offers a greater range of functionality, for example: polls, surveys, coupons, and built-in newsletters. In addition, Magento has c with more out of the box analytics, better order inventory tools, and a larger range of browsing options.

5: Other Features: Magento has more robust starter elements and you have much greater control over the behavior of your store. Shopify developers create add-ons and plugins that cause your monthly subscription fee to sky-rocket.

6: SEO: Magento, Shopify, and Big Commerce all have respecitible SEO tools including meta tags, editable meta descriptions, and image and page title alt tags. They also offer a free customizable mobile app.

7: DESIGN: Shopify and Big Commerce both offer a lot of templates that are free, or you can purchase some pretty awesome ones for under $200. Magento doesn’t have great templates and will need to be customized by a development and design team like We Are Immediate. Here is one example of a custom Magento store designed and developed by We Are Immediate.

8: Payment Processing: Both Shopify and Big Commerce offer integration with up to 70 different processing companies. However, you will be sure to pay a pretty hefty processing fee from Shopify no matter which gateway you integrate with. With Magento, the processing fees that you incur will only be from your gateway and merchant services provide. But hey, that’s how SaaS companies make some of their revenue! Magento also integrates with more than enough processors via extensions and offers one-page checkout, that can improve shopping cart abandonment. You can also customize your checkout with Magento. Pretty cool.

9: Customer Service and Technical Support: The great thing about using a SaaS service is that some of them have 24/7 customer support – Shopify’s support is AMAZING. Magento on the other hand, owned by you– your support is your development team. It’s kind of like the difference between renting an apartment that has a super on the premises to fix everything, versus owning your own home and having to hire a plumber if there is a leak.

In the end, the decision needs to be based on:

  • Your budget
  • Your technical knowledge
  • Your future growth
  • How customizable you want your e-commerce website to be.
  • Your business function needs.

 

It’s not which e-commerce solution our team thinks is better, it’s which solution is best for your business. As your business grows, your technology needs might change. However, if you are just starting out with e-commerce, and don’t have a need for a customized solution, a SaaS service is fine. As your revenue increases , and you realize more customized needs that are not met by a SaaS service, Magento is the way to go.