Business & Finance

Fully Hosted vs. Custom eCommerce Solutions: Which One Is Right for You?

Fully Hosted vs. Custom eCommerce Solutions

Once an eCommerce store is built, it is incredibly difficult to change the entire operation to a new hosting provider or design. Choose a type of e-commerce store and layout carefully to avoid the headache and potential monetary losses of having to make a switch if the current solution isn’t working.

Differences between Fully Hosted and Custom eCommerce Solutions

A hosted eCommerce solution is provided by a company such as Flying Cart or Yahoo! Merchant Solutions. These companies host the website and offer various store building and management options, including product catalogs, payment processing, and customizable shopping carts. eCommerce businesses pay a monthly fee and usually a percentage of sales to use a hosted eCommerce provider’s services.

Custom eCommerce solutions are built from scratch and are highly customizable to suit the needs of the online business. Typically, the eCommerce retailer describes their needs to the developer or developing company, building the store and hosting the website. The cost of this type of solution depends on the developer’s rates, and there may be ongoing costs associated with site maintenance and upgrading.

Related: Multi-Vendor eCommerce Platform – 9 Must-Have Features

Pros and Cons of Fully Hosted and Custom eCommerce Stores

Hosted eCommerce stores are almost always less expensive to develop. Many of the more popular hosted eCommerce providers offer solutions that are almost turn-key. Retailers choose a template and select features, then upload their product or service catalog.

Developers might argue that although the expense of a custom solution is greater, retailers save money over time. However, this is only true if the agreement gives the retailer full rights to manage the store on their own after the initial development. Even then, the business must be capable of maintaining and updating the store regularly, requiring an investment of time and capital. Also, the cost of hosting and payment processing still applies.

Custom eCommerce solutions allow online businesses to design a unique storefront and special features and functions tailored to their business. However, hosted eCommerce solutions have evolved to the point that they offer just about every feature a business could think of.

Choosing an eCommerce Developer for a Custom eCommerce Store

A developer or company might have a great reputation but beware of those with little eCommerce experience. Look for a developer with extensive and verifiable experience creating successful online stores, then ask for references and check them.

Understand the terms of the agreement; how much control will the business have over future upgrades and improvements? Will the company have to pay the developer to add new products or make small changes to the website? Who owns the website itself after it is built, the developer or the retailer?

Always use a contract and consult with a lawyer before agreeing with a developer. Statistics from the U.S. Census Bureau show that online retail sales continue to climb, even as total retail sales lag. It is a great time to get into an online business, but careful planning is necessary to avoid costly mistakes.

See Also: eCommerce International Shipping: 6 Best Practices

Choosing a Hosted eCommerce Solution Provider

Compare several hosted eCommerce providers and their storage options before committing to a solution. Choose one that provides all the functionality and features required and can grow with the business over time. Consider:

  • Analytics – Online retailers must track website visitors and conversion rates to improve their business constantly.
  • Automated Shipping and Calculators – Make sure the shipping software works with your business model.
  • Catalogue Importing/Exporting – Is it possible to import the current catalog or manually add it?
  • Marketing Features – Many hosted eCommerce companies include some level of online marketing in the package.
  • Payment Processing – Most hosted eCommerce providers recommend a third-party payment processing solution that works with their service or includes it in the package.
  • Wizards and Templates – How easy is it to set up the store and get the right look?

There are thousands of options for online businesses seeking a hosted eCommerce provider. Research and compare to find just the right fit.

How to Find the Best Dedicated Web Hosting Provider

Many online businesses find that shared hosting is an inexpensive, suitable option for their internet store or other eCommerce business. However, dedicated web hosting offers several important features for larger or better-established eCommerce businesses.

As an online business grows, the need for increased online security and flexibility may offset the added expense of dedicated web hosting. So, if you want to go with a custom eCommerce store, you will need to choose the best hosting provider.

Related: How to Setup an eCommerce Store from Home

See What a Dedicated Web Hosting Has to Offer

Dedicated web hosting is preferable for many eCommerce businesses because the server hosting their website is not shared with anyone. Shared hosting providers may have several websites hosted on one server; while this option is usually less expensive, there may be several downfalls for an online business, including:

  • server overload, slow loading speed, and intermittent downtime
  • the ability of other users on the same server to upload content that may include viruses
  • bad codes and scripts from other users

Business hosting is more secure on a dedicated server. An eCommerce website will not experience slow load times or downtime due to heavy traffic on other sites sharing a server.

Security in Custom eCommerce Store Hosting

Online businesses take several measures to protect themselves and their customers, including credit card verification and the use of internet payment gateways. However, online security begins well before a customer even reaches the website. Shared hosting opens the door for security issues because any user can upload content and potentially affect everyone who uses the server.

Imagine a new online store owner uploading a web application with an undetected virus that wipes out everything it touches across the country. Every user on the server could lose all of their data. eCommerce web hosting demands greater security, even for small businesses.

Reliability Is Critical in Web Hosting for Business Users

Online business websites cannot afford downtime or slow loading time as a result of overloaded servers. If one website on a shared server experiences a large traffic volume, the other websites sharing the server may become temporarily unavailable or sluggish.

Dedicated web hosting is a good business hosting option because users have a set amount of (or unlimited) exclusive bandwidth.

eCommerce Web Hosting Often Requires Flexibility

No two online businesses are identical; while out-of-the-box eCommerce solutions and shared hosting work well for some business models, others require greater flexibility.

Shared hosting plans usually include access to specific software and applications, some of which the company can use and others not suitable. Dedicated web hosting allows users to choose the operating system, software, applications, and control panel that best suits their business needs.

Web Success for eCommerce Companies

Cost is only one factor when selecting an eCommerce web hosting provider. Carefully weigh the features, benefits, and limitations of at least three different shared and dedicated web hosting providers before making a selection.

Ensure that the provider offers the required bandwidth, security features, operating system, and control panel. Choose an option that is affordable but allows room for growth.

Conclusion on Hosted vs. Custom eCommerce Solutions

Choosing an eCommerce solution is one of the most critical steps in online business planning. Take the time to consider all options and critically compare before committing to prevent problems later. As a general rule of thumb, small to medium-sized businesses rarely need to hire an eCommerce developer to create a custom solution, and the cost can be prohibitive. Even large companies and corporations are turning to hosted eCommerce providers as a steady stream of new features and services makes this a more customizable option for companies of any size.

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