Hosted vs. Custom eCommerce: Your First Big Decision

In our series on eCommerce Demystified, we went through your eCommerce options in detail.

If you read that series, you might be wondering "Where do I start?". I'm glad you asked.

The first major decision you'll need to make is whether you're going to have a hosted store or a custom store.

Hosted? Custom? What Does That Mean?

A hosted online store is a service that you subscribe to for a monthly or annual fee. Your store runs on the service provider's hosts, and your options depend on the features of their software.

You've almost certainly run across hosted stores provided by Google and PayPal. There are other vendors who provide much more sophisticated hosted stores. You've probably purchased products from hosted stores, not realizing that those stores were not custom-made.

A custom online store is one that you have built for you by a web designer. The underlying software is usually based on a standard eCommerce package (for example Magento), but can then be customized to your heart's (and pocketbook's) desire. The store runs on your host or hosting service.

What's the Practical Difference?

The main areas of difference between the two options are:

• Custom eCommerce Features: With a hosted store, you choose from the features offered by your provider. With a custom store, you can have just about any feature you want. Some hosted store providers have lots of features, so this may not be relevant for you. But you need to think very carefully about your needs. If you set up a store with a hosted store vendor and find out later than they're missing a critical feature, then you'll need to start again from scratch.
• Subscription vs. One-Time Costs: If you hire a designer to develop a custom store, most of your costs are up-front (there may be a retainer fee for software updates). With a hosted service, you'll be paying a monthly (or annual) fee for as long as you have your store.
• Ownership: With a custom store, you own the design and data, and can move them wherever you want. For example, if you decide to change hosting services you can take your store with you. With a hosted service, you will probably be able to dump out your accumulated data, but otherwise you'll be starting from zero.

Other Things To Think About

Some important factors can't be as neatly summarized:

• DIY or not?: You'll need to decide whether you want to make the decisions on your own and do the work yourself, or whether you want to get an eCommerce expert to help you.
• Store design: With most hosted services, your store design is based on a standard template. Services differ as to how much customization they allow. Many eCommerce platforms also support templates. In either case, if you want a lot of customization you're going to need a designer. You have to make the tradeoff between design costs and the advantages of a unique design.
• Search Engine Optimization (SEO): For many online stores, doing well in search engine rankings is an important success factor. Hosted services and eCommerce platforms differ widely in the SEO options they offer. Check carefully before deciding.
• Internet marketing: Depending on what you're selling, it may be important to have your products submitted to the product comparison engines like Google Base, Yahoo! Shopping, etc. Some services and eCommerce platforms do this for you; some don't.

Now It's Up To You

There's no single right answer for everyone. You need to think through the advantages and disadvantages of each approach and decide what's best for you.

If you'd like help, contact us for a quote.

Photo Beaulieu_Hants via Flickr