From buying services on TaskRabbit to one-of-a-kind finds on Etsy, e-commerce encapsulates the sprawling online marketplace of goods and services. Selling online has never been so accessible, but running an e-commerce store requires you to select an appropriate e-commerce platform. Here’s how to weigh your platform options.
E-commerce is the buying and selling of goods via the Internet. E-commerce platforms provide the software that allows these transactions to take place. While setting up an e-commerce store is easy and 100% online, the platform you select depends on the individual needs of your business.
While some e-commerce platforms advertise a one-stop-shop merchant service, you may need more than one provider to cover the following:
Website host. Maintain your website’s data on self-hosted or hosted e-commerce platform. Ensure online security with a PCI-compliant platform.
Website design. First impressions matter, and this especially holds true for online stores. A website that’s functional, intuitive and visually appealing increases your legitimacy in the eyes of a first-time buyer.
Payment gateway. A payment gateway is the technological highway that acts as both the passage and transportation of data during an online transaction.
Shopping cart software. An online shopping cart allows customers to add products for purchase and facilitates the virtual check-out process. While open-source shopping cart software is often available for free, it typically lacks the security and support of licensed or hosted software.
Management software. Staying on top of inventory levels, balancing the books and managing customer relationships are all part of running an online business. Finding the right management software can help you tackle the day-to-day nuances of hosting an e-commerce store.
PCI-compliance and SSL certification
Payment card industry compliance refers to the security standards a business must follow to protect the credit card data of its customers. These standards — established by card issuers like Visa and Mastercard — are governed by the Payment Card Industry Security Standards Council. To be PCI-compliant, a business must complete an annual self-assessment questionnaire and pass a quarterly PCI security scan.
SSL certification is another security measure that helps protect customer data. Businesses that conduct online sales must purchase an SSL certificate through Certification Authorities. It is a digital certificate that provides encryption and authentication for sensitive data.
To process online payments, merchants must run PCI-compliant processing software and obtain SSL certification.
What is a hosted e-commerce platform?
A hosted e-commerce platform provides web hosting in addition to e-commerce services like shopping cart software and payment gateways. Hosted platforms also take the guesswork out of security protocols for online merchants with PCI-compliance and SSL certification.
Self-hosted providers like OpenCart and Magento may cost less than hosted e-commerce platforms like Shopify and BigCommerce, but hosted platforms offer the resources and support of an established provider — a potentially worthwhile asset for first-time business owners.
What is a software-as-a-service (SaaS) e-commerce platform?
SaaS e-commerce platforms refer to hosted e-commerce platforms in which the software is licensed to a vendor and maintained by a third-party.
Should I use a hosted platform or start a site from scratch?
When setting up an online store, one of the first decisions a merchant must make is whether to self-host their website or use a hosted e-commerce platform.
Self-hosting utilizes open-source software, can be downloaded for free and offers the flexibility of customization. It’s for the tech-savvy who want control over the hosting process.
Hosted platforms charge a service fee and manage all aspects of the hosting process. It’s for merchants new to e-commerce and need the extra support.
New businesses that will benefit from the convenience of hands-off hosting and support.
Larger businesses with the IT support to customize their hosting experience.
Low — your provider helps you set up your e-commerce store.
High — you handle the costs of setting up your website on your own and out of pocket.
Intermittent software and security maintenance
Time to get started
1–2 business days
How do I choose an e-commerce platform?
Consider the following when comparing e-commerce platform providers:
Cost. Weigh costs including setup, monthly service fees and transaction fees.
Features. Are you looking for an all-in-one platform that includes payment processing, a payment gateway and POS software? Consider the services your business needs to flourish.
Ease of use. Intuitive software is the more user-friendly option but if you’re tech-savvy or have a dedicated IT team, self-hosted platforms offer more opportunity to customize your platform.
Speed. Average loading times for web and mobile can impact potential sales, so ask your provider about platform speeds before you sign on.
Support. If you’re a first-time online seller, the integrated support of a hosted e-commerce platform is easier than self-hosting.
Selling channels. Providers like BigCommerce integrate with a number of third-party platforms like Amazon, Facebook and Instagram — others don’t. If you’re counting on third-party sales, make sure your selected platform can accommodate.
Subscription. Do you need to sign a contract to use the service? How about cancellation fees? Scope out the fine print before you sign up.
Providers like Square, Shopify and BluePay offer integrated e-commerce platforms alongside POS hardware to accept customer payments in person. Opting for one of these providers can help streamline your sales reports and inventory management with online and in-person sales under one roof.
Frequently asked questions
E-commerce business models are the types of transactions the platform is designed to facilitate. Four of the largest e-commerce business models are business-to-consumer, business-to-business, consumer-to-business and consumer-to-consumer.
While hosted platforms offer their own security features, self-hosting providers typically don’t. So if you opt to self-host your platform, be prepared to tackle PCI compliance and SSL certification out of pocket and on your own.
It depends. Hosted platform providers like Shopify can help you get your online shop up and running in just a few hours with the help of templates, themes and step-by-step tutorials. But if you opt for self-hosting, you’ll be building your store from scratch — a process that can take weeks, even months, depending on your technical know-how.
Shannon Terrell is a writer for Finder who studied communications and English literature at the University of Toronto. On any given day, you can find her researching everything from equine financing and business loans to student debt refinancing and how to start a trust. She loves hot coffee, the smell of fresh books and discovering new ways to save her pennies.
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