Ecommerce Platform Update

Engadget of all things has a nice update on the current status of Ecommerce Platform marketshare:

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I think it’s surprisingly vibrant in an era when so much of technology is in the hands of so few. This is especially true with infrastructure and middleware (looking at you AWS) controlled by just a handful of companies such as IBM, Google, Amazon, Oracle, Microsoft etc.

Application developers are embracing both open source and creating closed source ecommerce solutions and this is good news for merchants going forward. The perennial question for merchants is however, which one do I choose? There’s no easy answer but at least there’s lots of options.

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Hosted vs Self-Hosted

I was browsing through some of my old bookmarks today and found an excellent article by EcommerceFuel’s Andrew Youderian. In the article, “Migrating to Shopify from Magento: The Results of our $50,000 Redesign”,  Andrew discusses moving his ecommerce store from Magento to Shopify.

This is well worth a read if you’re considering moving your site in general but more importantly, discusses the age old question in ecommerce; hosted or self-hosted?

Andrew sums up the argument:

I gave up having micro-level insights in order to more efficiently transform the website and brand into what I wanted it to be.

This is exactly why smaller stores and ecommerce newcomers should go with hosted aka less technology, more commerce. As you scale in terms of SKU’s, required functionality etc it makes more sense to go self-hosted (or proprietary for that matter).

What’s your thoughts on hosted vs self-hosted? your technology preferences?

Open Source Ecommerce

Interesting news today from Automattic – the people behind the most popular website cms ‘WordPress’ – that they’ve acquired WooCommerce. The release:

Since late last year we’ve been talking with Matt Mullenweg, CEO of Automattic and co-founder of WordPress, and his bridge team about what we could build together. Our plan is to leverage our combined wealth of knowledge, skills, vibrant community and joint infrastructure platform to reach new eCommerce heights.

So, the goal with WordPress + WooCommerce is to create the most open and easy way to sell on the Internet. You would imagine that this is quite plausible given the scale of WordPress. Today, WooCommerce is the second most popular ecommerce software behind Magento as detailed below:

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Magento owned by Ebay appears to be in relative stagnation but it still represents 20% of total ecommerce solutions (both hosted and  open source). Nevertheless, I do think we need a alternative solution for people that have outgrown a hosted platform like Shopify or BigCommerce.

Time will tell whether the new WordPress-WooCommerce acquisition fills this void but it’s exciting news for online merchants and developers.

Shopify Going Public

One of the most popular hosted ecommerce platforms (arguably the most popular) is going public. Shopify has just released it’s SEC filing and it’s worth having a look at; especially if your business runs on the platform or you’re developing your own ecommerce software.  An interesting note in particular:

We incurred net losses of $1.2 million in 2012, $4.8 million in 2013 and $22.3 million in 2014. We also incurred net losses of $6.4 million and $4.5 million in the three months ended March 31, 2014 and 2015, respectively. At March 31, 2015, we had an accumulated deficit of $33.6 million. These losses and accumulated deficit are a result of the substantial investments we made to grow our business and we expect to make significant expenditures to expand our business in the future.

So despite being in software and having thousands of customers – over 10,000 according to the company themselves – they’re still not making money. How does this make one feel running a business on the platform? Well, somewhat nervous I guess. Remember when Magento decided to abandon hosted stores and recommend switching to BigCommerce? The same could happen again and if you have a lot of code and SKU’s, it could be a massive headache having to re-platform.

It will also be interesting to see how being public changes the company’s philosophy as it’s built it’s business on supporting small merchants. Typically in ecommerce and in actual fact, all software, the real money is made in big, complex, enterprise accounts and so it could be tempting for them to go after this space.

Nevertheless, Shopify should be congratulated as they’ve really opened up ecommerce to thousands of people and created a fantastic ecosystem in a similar vein to WordPress in the blogging space. As a merchant, you have to start somewhere – be that Ebay, Amazon or indeed an entry level hosted service and Shopify is the best out there.

Do you use Shopify? What do you think of this move?