Online retailers can choose to self-host an eCommerce application or use a hosted platform. Both provide the foundations on which eCommerce businesses are built: a connection to the internet, a shopping cart, product pages, and a content management system. But that’s where the similarities end.
The choice of hosted or self-hosted will influence the future of your retail business as it grows. It is possible to migrate between the two, but that can be an expensive challenge, so it’s helpful to have a clear understanding of the difference before making a decision.
Self-Hosted eCommerce Applications
A self-hosted eCommerce application is software the user hosts on a server or a web hosting account. The application is available separately from the infrastructure it is hosted on. Common self-hosted eCommerce applications include Magento, WooCommerce, and OpenCart. These open source applications can be downloaded for free, but require a server. The server is the major cost associated with self-hosting
Hosted eCommerce Platforms
Hosted eCommerce platforms bundle the eCommerce application and hosting together as a service provided by the same vendor. The vendor develops the application, owns and manages the hosting, and charges a fee for using the service (and occasionally a percentage of the store’s revenue). Hosted eCommerce platforms are often referred to as Software-as-a-Service applications. Shopify and Prestashop are among the most successful hosted eCommerce applications.
Self-hosted vs. Hosted For eCommerce
A hosted eCommerce platform is like a hotel room. You pay a fee and hope for a comfortable night. But you don’t choose the location, the architecture, the interior design, or the furniture. The environment is standardized to the hotel owner’s priorities.
A self-hosted eCommerce application is more akin to a house you have designed: you choose the location, what it looks like, how it is hooked up to utilities, and how it is furnished. Building a house is more work than booking a hotel room, but few people choose to live full-time in a hotel.
Hosted platforms offer convenience, self-hosted applications offer control. As your eCommerce business grows, you will find control is more important.
With a self-hosted application, there are limitless possibilities for customization, either by installing a software module or by writing code. Hosted platforms are designed to accommodate as many retailers as possible. They are not nearly as customizable as self-hosted applications.
What’s more, the platform owner decides which features to build and how they work. A tension between your needs and the platform’s is almost a certainty, which is why many retailers move away from hosted platforms once their business is established.
Vendor lock-in is the least desirable feature of eCommerce platforms. A self-hosted application is built on choices you make. You choose the hosting provider, the type of hosting, and the application. The application can be migrated to a new hosting platform without fuss. Platforms are a package; it’s all or nothing and moving to a new platform is expensive and complex.
Before choosing between a self-hosted eCommerce application and a hosted eCommerce application, consider what is best for your business: short-term convenience or long-term flexibility and control.