What Businesses Have In Common with Instagram Models turned Makeup Magnates:
They both need and use eCommerce Platforms
From NPR’s Guy Raz:
“…Kylie Jenner made the cover of Forbes. The issue was dedicated to female billionaires and Kylie Jenner made her Fortune from a Cosmetics Empire called Kylie cosmetics in particular things that just weren’t possible even five years ago for starters.
Kylie’s billion dollar company employs just seven full-time people. All of the products are manufactured in packaged by a private label Cosmetics producer in Oxnard, California.
… the thing that really blew me away all the sales and fulfillment. This is handled entirely by a software platform called Shopify…”
Most businesses are not going to be on the cover of Forbes magazine but almost all will have to figure out how to take care of the nitty gritty details of business on the internet. With 2 billion people buying online in the coming year, choosing an eCommerce platform is a priority.
What is eCommerce technology made of? It is like a sandwich of various technologies:
“Electronic commerce draws on technologies such as mobile commerce, electronic funds transfer, supply chain management, Internet marketing, online transaction processing, electronic data interchange (EDI), inventory management systems, and automated data collection systems.”
This complex bundle of technologies can be delivered through a software platform — but which one?
Today there are many eCommerce platforms available — here is a chart of just a few below.
(Image from Wikipedia of various software solutions for eCommerce)
Not too long ago, however, it was difficult to conduct business on the Internet. Over 10 to 15 years ago, independent businesses had to figure it out themselves or resorted to imperfect outside solutions controlled by outsiders, including commercial exchanges of large internet companies or cobbled together solutions.
Now every business that needs to operate online can do it “in house”. There are 3 platforms which have over 60+% of the market — focusing on them is a good start for anyone’s research.
Magento, established in 2007, is an open-source solution known for its easy integration with former owner eBay — owned by Adobe since June 2018. It has a roughly 30% market share of the eCommerce platform market. A solution originally for eBay merchants has features including customization, paypal integration, coupons, fast single-page checkout, order management, customer alerts for marketing, and an ability to support global business in multiple languages.
Woocommerce, established 2011, was built by a WordPress developer called WooThemes, whose strength is its power to convert WordPress blogs into online stores. Since May 2015 it has been owned by Automattic, the core developer of WordPress software. Its estimated market share of the eCommerce platform market is about 20+%. Standard features for many sites which includes features such as order management, customer accounts, and safe payment.
Shopify, founded in 2006, was created by co-founders of a ski-equipment shop to support eCommerce and transformed into a publicly traded company with a 10+% market share and growing. A publicly traded company which provides SaaS-based eCommerce services, Shopify has a colorful origin story which helps to explain the significance of what are otherwise dull daily business needs, including sales and fulfillment infrastructure.
“In 2004, German programmer Tobias Lütke was living in Ottawa with his girlfriend. An avid snowboarder, he wanted to launch an online snowboard shop, but found the e-commerce software available at the time to be clunky and expensive.
So he decided to write his own e-commerce software. After he launched his online snowboard business, called Snowdevil, other online merchants were so impressed with what he built that they started asking to license Tobi’s software to run their own stores.
Tobi and his co-founder realized that software had more potential than snowboards, so they launched the e-commerce platform Shopify in 2006.”
Shopify’s startup story is more than an interesting anecdote of small business owners “building their own solution” — the same solutions Lutke and his partners created were also in demand by many other non-tech businesses which needed to support their online businesses.
This does NOT mean that your focus should only be Shopify — there are dozens of solutions.
Here are some broad issues to consider when choosing an eCommerce platform:
- Business/Storefront and Product/Services database (i.e. catalog)
- Payment systems / integration with payment gateways
- Order management / Shopping Cart / Transaction Management
- User Interface and Business Dashboard
- Marketing/SEO tools/email
- Analytics, Monitoring and Reporting
- Integrations with tools, vendors and other services
We should take note of some of the pros & cons about Magento, WooCommerce and Shopify.
It’s a given that since both Magento and WooCommerce are open source based — there are free versions for those starting out — with premium packages for larger businesses / enterprise. These platforms are a better fit for users with tech skills who can build very tailored websites. Magento’s customization potential is a major advantage for sites who rely upon developers able to build for specific needs. Magento’s edge is ideal for those who can afford both time and tech.
(If you choose to build a customized site then Magento could be an ideal eCommerce solution.)
(An ecommerce-platforms.com Magento 2.0 product review highlights a wide range of features)
WooCommerce has a unique edge, thanks to its integration with just about any WordPress theme — and it offers the best Search Engine Optimization (SEO) thanks partly to plug-ins including Yoast. If you’re building a WP site then this could be your path of least-resistance.
One issue, however, aside from the fact that WooCommerce was created for WordPress-based sites, is security. The popularity of WordPress which, according to WooCommerce, runs 34% of the world’s websites, makes WP sites with WooCommerce a target for hacking — businesses will need technical know-how to manage these risks. WooCommerce’s message is that it’s a platform “Made For Developers” – the WooCommerce site points this out on its site.
WooCommerce users must be prepared for using WP plug-ins, sending trouble tickets for technical issues, relying on online communities for help, and being able to pay for the cost-creep of domains, hosts, site themes/tweaks and plug-ins – but it fits with WordPress.
Beyond Magento’s customization potential and WooCommerce’s close WordPress fit is Shopify.
The big advantages for Shopify include integrated hosting and user-friendliness but you’ll have to pay for Shopify — there are about 3 tiers of plans. Users won’t have to deal with domains, hosting and so on. While it’s true that users have to pay if there are any technical issues, Shopify’s customer service is available day and night ready 24/7 to assist users.
And just as WooCommerce and Magento have an integration edge with another major platform (WordPress and Ebay/Paypal respectively), Shopify also has a unique integration edge with Amazon Services — a major plus in combination with Shopify’s other edge: mobile commerce. While all eCommerce platforms have mobile solutions and configurations, when users launch eCommerce sites with Shopify they work across all device formats the moment a site goes live.
(Shopifyandyou.com reported that 66% of 2018 “Black Friday Cyber Monday” (BFCM) were mobile.)
One potential Shopify weakness, aside from fewer options for site customization, is that if you’re focused on a global market then you will have language and translation issues – this is a blind spot for Shopify that will hopefully be addressed.
Shopify’s security may be an edge, however, since it’s a “SaaS” and is a hosted eCommerce platform. Security is always a plus for businesses of all sizes from solo operators to enterprise.
Comparing Magento with Shopify via Google, we see big increase in interest about Shopify.
A word of caution. Just as cost is not the only consideration, neither should a platform’s popularity be over-emphasized. Shopify has strong interest based in recent years, based on a very blunt Google Trends, but that can change. There could be a newcomer or a competitor which comes out with a new version which takes the lead. One certainty, however, is the high odds each and every business can find an effective solution which will fit.
One size, and one platform does not fit all. Some may like the ease of Shopify but others may chafe at not having more customization which Magento offers. Other users may have a massive site and content machine on WordPress and will prefer the fast integration of WooCommerce.
Every user will have a different origin story for their business or organization and different technical challenges to solve (just as Shopify’s founders had to solve their problems) — the difference now is that users have a range of possible eCommerce platforms to choose from. Every business will have an eCommerce platform for their needs.