Hosted vs. License-Based Online Shopping Carts

If you have ever been in a position to research software for your company you know that it can be a daunting task. There are so many options available especially if you research on the web. If you are not familiar with the industry that develops the type of software that you are interested in you may not know what options can benefit your company, what options are a waste of money and who to trust to build and/or implement your software. The same can be said for online shopping carts.

If you have ever researched online shopping cart solutions you know that there are many options to consider. To start you want a solution that offers an attractive feature set, is easy to use, easy to setup, reliable, well documented and has available support. From a technical side there are other options that must be considered. This includes, but is not limited to, credit card processing, customization options, database type & potential size, hosting and connectivity to accounting packages, fulfillment houses & shipping vendors. For the purpose of this article we will be focusing on the hosting aspect of the online shopping cart. Generally there are two types of shopping carts: Hosted and Non-Hosted.

There are advantages and disadvantages to both. The number of products you are selling, the amount of customization you require and how you would like to structure the support of the online shopping cart will drive which type of cart you ultimately choose.

Hosted carts are attractive to many people. Their startup costs are typically low, the ability to activate the cart and start selling is relatively fast, payment processing, security and hosting is typically integrated for you and they include templates that allow you to design a simple front-end to sell your products or you can add your own design with some limitation. Technical support is also typically included in the monthly support fee.

But, hosted carts have their disadvantages. Much like leasing a car, you are always going to pay a monthly fee. There is also typically less flexibility for customization as well as fewer options for connecting to accounting and fulfillment systems. You are also locked into the hosting vendor that you maintain your online shopping cart with. If you ever want to change hosting vendors to improve uptime, support, etc. you most likely will need to start over with another hosted shopping cart solution because those packages are typically all-inclusive. Reliability of the hosted cart vendor is also an important consideration. If the company were ever to go out of business you may lose that shopping cart solution.

Non-hosted or License-based online shopping cart solutions have one major advantage over hosted solutions: Flexibility. You own the shopping cart license therefore you can choose from any number of hosting vendors with the freedom to leave them anytime if you are unhappy with their service and easily find a replacement hosting vendor. Because you own the license, the company that originally built the shopping cart may also offer the code for free or at a one time cost. Having the shopping cart’s code allows you or a developer to alter the shopping cart to whatever you would like which makes the available feature list endless. Because of the customization option in this type of cart you can import virtually any design for your front-end without limitation. The flexibility of this type of cart also extends to the processing of credit cards. Many licensed-based carts have the ability to connect to any number of payment gateways allowing you to shop around for the one that best suit you and your customer’s payment needs. Another attractive advantage is that once you purchase the license there are no required payments due to the shopping cart vendor. There are, however, other recurring costs to consider.

Like hosted carts, non-hosted carts have their disadvantages. The upfront costs are typically more expensive and require more coordination on the part of the business owner then do hosted carts. Like the hosted solutions you will typically have a separate vendor designing your website but other vendors to contact include the hosting company, the payment gateway vendor and possibly contracting with a 3rd party developer if you need ongoing updates and customizations if you don’t have the skill or time to handle the changes in-house. Upgrades are also a future cost to consider especially if you have a highly customized shopping cart. In most cases if you require an upgrade you will need to purchase the upgrade license and then pay a developer to complete the upgrade. In some cases you do have the option to invest in a maintenance plan that may include the upgrade license. Once again, a maintenance plan is not a requirement of this type of shopping cart.

In short, there is a myriad of options to choose from. Your company’s individual and unique requirements will drive what cart best suits your needs. Keep in mind the other software applications your business uses on an everyday basis when selecting a cart. If you can somehow connect your cart to a pre-existing accounting or order management system you have the opportunity to improve your internal business processes that much more. When researching options, try your best not to speak directly with the shopping cart providers because, as you may know, they are not going to be objective about which options are the best for you. You can typically get the information you’re looking for off of their website. Your best bet is to do your homework by taking the time to research the available options or contact a web developer who may be able to point you in the right direction. Also, a good resource can be a site that tests and rates shopping carts. These ratings may include a list of options that never crossed your mind but that you deem as important.

Sources:

http://shopping-cart-review.toptenreviews.com/
http://www.hostway.com/web-resources/tag/shopping-cart/
http://www.tamingthebeast.net/articles2/shopping-carts.htm
http://www.practicalecommerce.com/articles/552-Debate-Hosted-Shopping-Carts-Perfect-For-Most-Entrepreneurs-