Custom Ecommerce Development vs SaaS Platforms

Custom E-Commerce Development vs. SaaS Platforms – What is the Right Solution for You?

Introduction: Making the Right Decision About E-Commerce Can Shape Your Future Growth

Every e-commerce company eventually must make a critical decision regarding how it will choose to develop or deliver its business.

Will you:

Build a custom e-commerce platform specifically designed to support your business model

Or launch quickly with a SaaS E-commerce platform that allows you to take advantage of most of the heavy lifting

On the surface, this is just a technical decision, but, in fact, it is strategic and should not be considered as such alone.

Choosing between the two will directly affect:

The speed at which you can launch

Your ability to deploy a scalable e-commerce platform

The degree of control you have, or will have, over the performance of your platform and the overall User Experience (UX)

How easily you will adapt to potential changes in customer buying patterns

The total cost of operating your platform over the long term

This guide is designed to assist you in comparing your options (Custom ECommerce Development vs. SaaS Platforms) based on the factors with which you will be most concerned, based on the size and maturity of US-based ECommerce businesses, including start-up companies as well as enterprise companies.

The objective of this guide is not to determine a “winner” in this comparison but to help you establish which option is most appropriate for your business’s current growth stage and long-term competitive position.

What is a SaaS E-commerce Platform?

A SaaS E-commerce platform is an ECommerce solution that exists in the cloud and is maintained by an E-commerce provider, who is ultimately responsible for managing infrastructure updates and security, as well as core functionality.

The two most well-known SaaS platforms are Shopify and BigCommerce.

SaaS ECommerce Platforms Are Characterized By:

Subscription-based Pricing

Hosted Solution (with infrastructure)

Pre-built Themes and Plugins

Limited Backend Customization Capabilities

Ability to Launch Your Business Faster

SaaS platforms are built for companies to maximize sales potential, which reduces the overall complexity of building a platform to sell goods online.

What Is Custom E-commerce Development?

When developing a custom eCommerce system, your development team will use the best technologies, tools, and methodologies to develop an eCommerce site that meets your unique business needs. The development process may include developing:

A custom storefront

Headless or composite architectures

A customized checkout and pricing model

Integrating multiple external services into the custom system

Building your own custom administrative and analytical systems

Custom eCommerce solutions differ from SaaS platforms because you have complete control over the behavior and evolution of the solution.

Time-To-Market: Speed Or Strategy

SaaS Platforms Can Only Provide Fast Time-to-Market

If you want a fast time-to-market, SaaS Platforms provide you with the fastest way to make that happen.

You can easily:

Launch a new eCommerce website in days/weeks

Utilize existing templates to complete your website

Skip creating your own infrastructure

For most early-stage eCommerce businesses, the speed of launching is more important than perfection.

The Custom Development Process Takes Longer But Provides Long-Term Benefits

A custom development solution will include (1) a discovery and architecture phase, (2) frontend and backend development, and (3) quality assurance and performance testing.

The custom development solution will take longer to create; however, it will create a solid foundation that will provide a competitive advantage for a long time.

Cost Comparison: Initial Vs Long-Term

Costs to Use a SaaS eCommerce Platform

Typical SaaS pricing will include monthly fees for using the service, transaction and/or payment processing fees, and fees for any paid plugins or extensions you decide to use.

SaaS pricing will typically have a very low initial cost; however, your costs will rise as you process more transactions, use more advanced features, or add additional apps.

As the volumes of e-commerce transactions grow, SaaS Platforms can quickly become an expensive alternative.

Costs for Developing A Custom eCommerce Solution

A custom eCommerce development solution will require:

Higher initial investment

Lower per-transaction costs

Predictable infrastructure costs

For high-volume and/or complex eCommerce businesses, long-term, developing a custom eCommerce solution may be less expensive than using a SaaS eCommerce Platform.

Flexibility and Customization

SaaS Platforms – Flexibility Evolved Within A Fixed Framework

SaaS platforms offer flexibility through the following:

Themes, Plugins, and APIs.

SaaS platforms limit:

The Rules of a Platform;

A Plugin Ecosystem;

Shared Infrastructure Limitations; and

Limits the ability to implement some business models in a clean manner.

A Custom E-commerce Product is Designed Around Your Company’s Operations

Custom e-commerce development shines when you require:

Complex Pricing Structures

Unique Checkout Processes

Custom Subscription Bundles;

Marketplace or Multi-Vendor Solutions; and

Adapting Your Business to the E-commerce Platform’s Capabilities.

Scalability and Performance

SaaS Platforms Scale Automatically

SaaS platforms manage the scaling of their infrastructure automatically, which is an attractive feature.

However, Overall Performance and Optimization Options are Limited in Instances of:

You share an infrastructure with other tenants.

Limited Advanced Performance Optimization Options.

This is a viable option for most small to mid-size stores, but high-volume or Performance Sensitive E-Commerce can create an opportunity to define your Performance Competitive Advantage.

Custom E-commerce Development: A Different Type of Infrastructure

When You Develop Your Custom E-commerce Solution, You Maintain Control Over:

Hosting Architecture,

Caching Strategy,

Database Optimizations; and

CDN and Edge Delivery.

For flash sales, high-volume business-to-business e-commerce, global traffic, and performance become a competitive advantage, not a challenge.

SEO and Content Control

SaaS SEO Capabilities

SaaS Platforms Provide Basic SEO Capabilities:

Basic SEO Setting Options,

Metadata Control Options, and

URL Management Options.

However, you are typically restricted by platform limitations from doing deeper customization within the SEO settings.

Custom E-commerce SEO Flexibility

Custom E-commerce Solutions Allow for Complete URL Structure Control, Advanced Schema/Structured Data, and Responsive, Very Specific SEO Performance and Optimization.

For content driven E-commerce Brands, this provides options for continued organic growth.

Integration and Ecosystem Fit

SaaS Ecosystem

The major benefit of SaaS ecosystem platforms is their robust marketplace of apps, which makes integration easy.

This is a good option when:

Your needs match popular offerings

You are willing to depend on third-party integrations or plugins

However, these two factors create the risk of dependency on third parties as well as the risk of “plugin bloat,” where too many plugins may be loaded onto your platform at once, creating inefficiencies in system processing.

Custom E-commerce Integration

Integrating custom solutions provides direct connections with:

ERP’s

CRM’s

Inventory/Fulfillment systems

Analytics Pipelines

Customers who run an E-Commerce business with complex operational workflow processes will benefit from this type of integration.

Security and Compliance

SaaS Security Model

SaaS solutions take care of PCI Compliance, Infrastructure Secure, facilitate updating, and reduce the operational load on small businesses.

Custom E-commerce Security

Building a custom e-commerce solution requires ongoing protection to be built into the model as well as continually monitoring activities with regular review of rules, procedures, and technology.

Furthermore, building a custom solution also provides the ability to establish security compliance processes and more control over sensitive data, especially in enterprise or regulated industries.

Ownership and Vendor Lock-In

SaaS Platform Lock-in

With SaaS platforms, there’s always a risk that you will not be able to move the data you have created. Due to this, the more your company scales, the more you will need to consider how to migrate data from your current SaaS software to a new platform.

Custom E-commerce Ownership

With a custom e-commerce build, you own everything about your E-Commerce solution and are no longer bound by any restrictions created by a SaaS vendor.

Additionally, there are no long-term platform-related costs. For companies that want to Scale Fast, and/or are planning for an Acquisition, it’s important to have ownership of your code/assets to support growth and future acquisitions.

When are SaaS E-commerce Platforms the Appropriate Choice for Your Company

SaaS Platforms are often the best choice when launching a new e-commerce business where speed is more important than difference. Your product catalog and the way you do business are all standard processes with little technical overhead. Many small and mid-size ecommerce businesses in the US will find SaaS the best place to start their business.

When is Custom E-commerce Program Development a Better Choice for Your Company

Custom ecommerce development is often a better choice for companies that have unique business models, operate at scale, and need a level of performance and user experience that set them apart from their competitors. Building a custom e-commerce program will provide you with greater system and application integration opportunities and greater long-term control of your platform. These characteristics are typically seen in larger-scale ecommerce companies and ecommerce companies that are in growth-mode.

What are the advantages of Headless and Composable E-commerce

The growing trend to adopt Headless E-commerce has resulted in many companies combining SaaS Account Merchants with custom Front-End Applications. This strategy allows businesses to quickly achieve high minimum viable product functionality while enabling their teams to develop their own applications when they are ready to do so, without committing to a fully custom-built platform on Day 1.

Conclusion: Make Your Decision Based on Where You Want to Be in the Future, Not Just Where You Currently Are

The decision you make between Custom Ecommerce Program Development and SaaS Platforms should not be based solely on your technology preferences, but rather on your business trajectory.

SaaS platforms allow you to get to market quickly, while developing Custom Ecommerce Programs gives you the ability to create deliberate and intentional scaling. The most successful e-commerce companies make decisions based on where they want to be in two to five years from now and not only on what is currently working.

Logiciel Solutions helps e-commerce leaders to assess, build, and scale their platforms in accordance with their long-term growth objectives. Our proprietary AI-first engineered solutions to e-commerce are engineered to optimally balance speed, performance, and long-term flexibility.

If you sense that your current ecommerce platform is limiting your ability to grow, you should carefully evaluate the foundational business elements of your ecommerce infrastructure and determine if any are holding you back from achieving your goals.

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