Shall I Build, Buy, or Lease an eCommerce platform?Reading Time: 7 minutes
Two most popular questions asked to me by business owners about eCommerce platform when they defining their eCommerce strategy,
- Build vs buy vs lease an eCommerce platform – what to choose?
- Which is the best eCommerce platform to start an online business?
With so many eCommerce platforms and technologies available, this question creates a dilemma among the retailers/merchants when going online.
Every platform and technology comes with a cost that the owners have to consider when looking to start or upgrade their online selling.
While comparing various eCommerce platforms/technology available, you can check out their pros and cons, competitive advantages, and long-term stability.
But, below are the questions that most business owners come up with,
- Where to start?
- Which eCommerce technology is the best for my business at the current stage?
- Build vs buy vs rent- which one should I consider?
- Which eCommerce solution to start or upgrade with?
Let’s discuss the top 7 factors that influence your decision to build, buy or get on rent an eCommerce platform for your website. They all are important, not mentioned in a specific order,
1. Number of SKUs
Whether to make an eCommerce website in-house or get it on rent or outsource its development depends on the number of SKUs (Stock Keeping Units).
This means the number of products that you have on your eCommerce website.
If you are trying to compete with the larger eCommerce brands such as Amazon, Flipkart, Myntra, etc., which means you have your products in millions.
And, such a huge number of products needs specialized eCommerce requirements. Hence, you need to buy from an IT company or you can even have an in-house team that develops an eCommerce website customized to your requirements.
Starting an eCommerce website with just a few thousands of products, you can easily order it from an IT outsourcing company.
And, if you just have a few hundreds of products to start with, you should not look for any other option except for getting it on lease.
2. Product Attributes
Before deciding the right eCommerce solution for your business, you need to understand the different types of product attributes.
There are two types of product attributes-
Simple product attributes mean that the product does not have any attributes such as color, size, shape, etc.
The customers have to buy them as is. Such products have a simple site configuration.
Hence, you can decide to go on rent eCommerce technology.
The products that have different attributes attached to it such as color, shape, size, brand, etc. are considered as the configured product attributes.
For these products, the customers have the option to filter them with such attributes. And hence, you need to have your eCommerce website customized. Here, the complexity increases with the type of customization required.
And, for a customized website, you can either order it or get it developed by having a team sitting in-house.
Now, this again depends on how many products do you have like we discussed in point #1.
Well, earlier, the leading eCommerce brands were not enough aware of these product attributes. But, they have now slowly and gradually moved towards this complexity and started having configured product attributes that improve the customer experience to a great extent.
3. Business Plan
Your decision to choose the best eCommerce solution directly implies your business plan.
What is your business plan?
Are you looking to have a marketplace? Or you already have one and looking to have it multichannel? Or do you want to have an integrated eCommerce system, omnichannel?
You need to be double sure about what you want to do before deciding on what eCommerce platform is the best for your business.
If you are planning to have a marketplace just like Amazon, then you need to have an eCommerce software on rent (if you find any rented eCommerce solution suitable) or order it from an IT organization.
Multichannel eCommerce solution means you already have your retail stores and looking to have an eCommerce store as well. But, you don’t want to have all your stores integrated for selling, return, or exchange processes.
If your business plan is to follow the most eCommerce brands in the world of having separate processes for both- retail and eCommerce stores, you can get on rent an eCommerce platform or order it from various eCommerce store development companies.
Did you hear that from now onwards the leading fashion brands have started accepting return orders and exchange orders from their nearby retail stores?
If yes, then those fashion eCommerce brands have gone omnichannel where they have integrated POS (Point of Sale) system which keeps everything organized on a single server.
For this, it becomes mandatory for you to order it from an eCommerce web development company because it is not easy to get this technology on rent or you can have a team in-house to have it developed.
The complexity is higher here and you need highly skilled eCommerce technology knowledge for your customized solution.
And, having an omnichannel eCommerce solution developed won’t be enough because then, you will need a team in-house to manage everything.
4. Your Budget
Here comes, one of the most important factors that influence your decision for an eCommerce platform.
What is your budget?
Getting an eCommerce solution on rent is comparatively for business owners with lower budgets.
Here, entrepreneurs, solopreneurs, or even startups are considered who are just trying an eCommerce business and not sure about whether they are going to continue with the same in the coming years or not.
Ordering an eCommerce solution is for the business owners who are very clear about what they are doing and their vision for the coming 5 years.
Here, already existing eCommerce businesses can look forward to it who wants to move their existing technology from renting to buying their own.
Making an in-house eCommerce platform is for business owners who are looking for long-term investments and want to grow their business with improved technology, security, and customer experience.
Here, we can take an example of an eCommerce brand into fashion, technology, etc. who is looking to expand its products, reach, and even business with improved technology and has the infrastructure and ability to manage and maintain the upgraded technology.
Businesses need to be aware of how much they want to spend before choosing the right technology for an eCommerce business.
5. Business Stage
The eCommerce technology completely depends on what stage you are in.
Are you at MVP (Minimum Viable Product)?
Is your business at an initial stage? And, being at an initial stage, obviously, you won’t be looking at spending a lot of money for a customized eCommerce solution.
So, yes being at an initial business stage, your budget definitely matters the most like we just discussed above. This is a stage when you are trying and testing different things for your business.
And hence, you need to rent an eCommerce software for your MVP.
Are you at expanding your eCommerce business?
If you are a well-playing eCommerce business and looking to diversify your business, you can definitely order it from an IT services provider.
In fact, you can even think of making an eCommerce solution in-house customized to your own needs.
This in-house team expands your existing eCommerce technology and keep on updating the same. For this, you need enough budget to hire a team in-house and infrastructure to accommodate them.
Are you looking to sell as a retailer?
If you are a retailer who is looking to expand his/her reach on the online market, ordering or buying an eCommerce software would be the better option.
Being already into the retail industry, your budget to going online would not be enough to hire an in-house team for the same or even having it on rent because of the number of products and their attributes you have.
6. Trade vs. Owned Goods
Who are you- A trader or a businessman who owns his own goods?
If you are a trader who is looking to start your own eCommerce business, you need to look forward to how much profit do you earn out of your business and what do you expect from an online business.
Mostly, the traders don’t have enough profit margins so going for making in-house or ordering it from an IT outsourcing company won’t be a good option.
Hence, the traders need to have the eCommerce solution on rent.
A Business Owner with Owned Goods
Are you a wholesaler or retailer who owns his own goods? Then, you definitely have various configured products with various attributes.
And, it is not feasible for you to choose an eCommerce platform for rent as the complexity increases with the number of products and their attributes.
So, making it in-house or ordering it would be advisable for your eCommerce business.
7. Technology Adoption by Team
Now, deciding how to get an eCommerce solution for your business has everything to do with how the technology is being adopted by your existing team.
If you are new to this eCommerce business and just looking for an easy-to-setup and easy-to-install eCommerce solution, then going on rent is the best option for you.
The eCommerce solutions that you get on rent is easy for the business owners who don’t have any technical background and needs nearly drag-and-drop features.
Now, if you are a business owner who already has an ERP system configured for your business, it is important to see how your legacy systems are configured and how they will be utilized to upgrade with the new eCommerce business technology.
The legacy systems impact your decision about technology because your existing team is also working on the same and training them to the completely new web store infrastructure would affect your time and even cost.
Hence, you need to hire an eCommerce solution provider that helps you with an eCommerce system that goes well with all of your existing systems.
Everything from the number of products, your budget to technology adoption influences your decision to choose the right eCommerce solution for your business.
Use all the above-mentioned factors and list out on what criteria you should decide to make, buy or get on rent an eCommerce technology.