There are two broad types of ecommerce solutions:

1. Software that is installed in a hosting account (like ShopSite or Magento)
-or-
2. Software as a service [SaaS] (no installation or ownership of files like Volusion, Shopify, BigCommerce, etc…) (Remotely hosted shopping cart)

Although the idea of not having to install or maintain any software may sound appealing, there are five drawbacks that you will want to consider…

1. Hidden Fees

At a quick glance, a remotely hosted solution may seem like a great deal. Some have low monthly fees. Others offer a ton of features at no additional cost. It can seem like a “no-brainer” to start with this type of solution.

However, the devil is in the details, and there are two areas where costs can skyrocket:

Low bandwidth limits

Many of these ecommerce as a service solutions only include a few Gigabytes of monthly bandwidth (one even has a plan with just ONE gigabyte). If you have a handful of products, and use some hi-res images, it’s easy to exceed a few Gigabytes in just a few days.

If you read the fine print, the additional bandwidth fees can be quite high. Ranging from $5 per Gigabyte to $10 per Gigabyte! So, if your plan comes with 10 GB of bandwidth, and you have a few small videos and images that get downloaded/viewed a bunch of times, it’s not abnormal to see 50 Gigabytes in a month. At $10 per GB, that would be an additional $400 per month in fees!

Percentage of sales

Another tactic used by some of these providers is to take a percentage of your sales as an additional fee. When you’re starting out, this may be appealing, as your sales are low, and you can save money in the beginning.

However, let’s say you run a popular sale at low margin as a way to get your name out there. Add in an additional 1-2 percent that goes to your provider, combined with credit card fees, and you can quickly eat away any profit.

Keep this in mind when looking at other solutions. I don’t think your sales volume should be something that a provider gets to piggy-back on to make money themselves.

2. Moving away is very hard to do

Since the software is not something you own or even have access to, it makes these type of solutions non-portable. That means if you are not pleased with their level of service, or they have too much downtime, or you just want to take your existing store somewhere else, you can’t. You cannot use their solution unless it’s also hosted with them.

Contrast this with ecommerce software that is installed in your account. Something like ShopSite or Magento. With software that you do control, it’s easy to take your site and move it to a different host.

Software as a service solutions often make it difficult to migrate to another platform. Sometimes they restrict exports, or limit FTP downloads speeds. They don’t want you to leave, and make doing so a not so pleasant experience.

With other ecommerce software that is under your control, it’s often quite easy to switch platforms. Full exports are allowed, and you have access to all the files right in your account.

Always keep this in mind when choosing an ecommerce platform. Things may not always go smoothly, and it can be an eye-opening experience when you need to move and find many obstacles in your way.

3. Hosting is not their specialty

Many of these ecommerce solutions providers did not start out as web hosts. In fact, many of them used to sell their ecommerce software for use with other web hosts. They don’t have a background in hosting.

Hosting is more of an add-on than a core competency.

Does it matter? Yes, it can matter quite a bit.

Many of the features you may come to expect from a web host such as advanced email hosting, advanced access to your account via SSH or SFTP, and the ability to install other applications like a blog, are many times missing or severely lacking at a remote ecommerce provider.

Some don’t allow email at all at their service. Most will not allow ssh access. Many won’t let you install software such as WordPress, or custom scripts.

One SaaS provider even removed all FTP access in trying to deal with PCI issues.

These type of roadblocks when trying to build out your site can be frustrating, and may even impact your ability to operate efficiently. Take this into account before making a decision.

4. Updates are not under your control

This can be one of the worst issues to deal with for some online merchants. Since the software is under the provider’s direct control, and it’s often deployed in a shared / centralized fashion, updates are pushed out on the provider’s schedule.

You have no control over when and how updates are made to the software. On the surface, this may sound great. You don’t have to worry about upgrading the software.

But what if an upgrade breaks a feature you rely on? Or they remove a feature that is paramount to what you do? What happens if they perform this upgrade while you’re on vacation, and your store stops working?

With SaaS providers, they dictate when updates are performed. Since the software is centralized, you cannot run a different version, or opt not to upgrade.

However, if the software is under your direct control, you can decide when and if an upgrade will occur. You can work with your web host to pick a date to perform the upgrade.

If your web host is a hands-on managed provider, they’ll let you know when critical updates are needed, and can make the process painless. But at least you can have the final say when it comes to whether an update is applied to YOUR store. Giving up that control can be costly when things don’t go smoothly.

5. Customization can be a problem

Since you don’t have access to the source code, and the software is not even installed in your account, when you need a custom feature or solution, implementing it may be quite difficult if not impossible.

Things such as custom scripts, advanced design elements, or deeper API integration are often not available. This can force you to abandon desired features, or have odd workarounds that don’t fully accomplish your goals.

Remember, these type of services are not full hosting accounts, so adding in custom scripts, cron jobs, additional databases, or getting under the hood are not normally allowed.

If you go with ecommerce software that is installed in your web hosting account, then you have the freedom to add-in custom features. A developer or designer will have more options at their disposal to implement your desired features.

….

As you can see, SaaS ecommerce providers come with their share of issues. Many times these issues are not brought to light until it’s too late. From hidden fees to a lack of control, these solutions may not be the best choice for your online store.

Make sure you do your homework, and look into the hidden details that could become a roadblock to your store’s success.

Often times, choosing ecommerce software that you “own” can lead to a better outcome. It give *YOU*, the merchant, direct control over your store, and allows you to make decisions that best suit your needs. Combine this with choosing a web hosting company that can be your partner and provide you with personal support and outstanding service, and you will be well on your way to being a successful merchant, free to make your own choices when it comes to *YOUR* store.

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