Aabbish Khan

Aabbish Khan

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Large Investments, for Small Businesses

When it comes to deciding on what eCommerce platform to use, the popular stance is as follows:

Small and Medium Businesses equals: Pick Shopify or WooCommerce etc.

Big Businesses equals: Pick Magento

But as popular as these ideas might be, they can, at times, become quite misleading.

We’ll soon see why that is so.

But first, let us establish what we mean by small and medium businesses.

According Investopedia , small and mid-size enterprises (SMEs) are defined as those businesses that maintain revenues, assets or a number of employees below a certain threshold.

When we talk about small eCommerce businesses, however, the major understanding is usually in the amount of investment that goes into building the business- with most assuming that a small enterprise is likely to invest less as compared to big ticket companies.

Initial Investment

Which brings us onto the next point.

How much investment goes into each of the eCommerce platforms out there?

For our purposes, we will look at the top three platforms, namely: Magento, Shopify and WooCommerce.

A look at pricing models for basic sites leads to the following data:

WooCommerce= Approx. $110 per annum

Shopify= Approx. $312 per annum

Magento= Approx. $5000 per annum

Keep in mind that these ballpark figures are a result of a raw web search, and do not go into the detail of things. Either way, however, just by looking at these values, one might be expected to agree with the mainstream view- that Magento has to be reserved for big business only.

But like I said, this leads to a simplistic view of things, and not necessarily the most accurate outcome.

Return on Investment 

The full picture is usually seen when we do a thorough cost-benefit analysis of things. To give you a short preview of what we mean by this, try remembering the age-old idea:

Small investments lead to small returns.

To put it simply, that is exactly what the case happens to be in this situation as well.

While Shopify allows you to set up shop easily and with minimal upfront costs, it does only that. The initial set up once achieved, is not very likely to scale or grow with time. The small business might create value and generate revenue. But in the end, there will always be an upper bound limit to how much profit it can generate using a platform such as Shopify.

Next up is WooCommerce.

This platform allows you to set up shop easily with yet again, a bare minimum of upfront costs. But even so, the features it allows you to access with the basic site package are limited to say the least. To build a storefront that actually has a chance of taking off properly, many people eventually end up opting for either the mid-range site or the advanced site, leading to costs anywhere between $300 to $1500+.

The key thing to note at this point, however, is that even with all of the features that come up with the advanced feature, the set up is limited in its effectiveness. The templates offered are standard and there is little room for advanced, personalized extensions or plugins etc.

When it comes to Magento, however, the upfront costs are high.

Yes, a free basic package does exist. But if we are being honest, that does not allow one to do much. And in this regard, the basic packages seem similar. Except, Magento, even with its basic package, still has room for development and growth.

With the right set of developers in place, even a basic store front set up using this platform has the potential to attract more customers than the other two do.

Why?

Firstly, because the platform is designed to be limitless.

What does that mean?

Well, for starters, it is endlessly customizable. A small store could therefore start off with a simple design in the beginning. And then, as it gains traction over time, it could invest time and money into customizing further. Things such as Advanced Account Configuration for instance, allows one to operate via multiple sub accounts- that is, by branching into different stores using the same package!

And as if that weren’t a significant difference all on its own, the platform works on community interactions. So international transactions and customer outreach is inherently greater with this platform than it is with any other out there.

Secondly, the model is designed for cost reduction in the long term. Especially, with things such as cloud hosting, the cost of ownership can be reduced significantly as the cost of maintenance and monitoring is greatly cut down upon.

And finally, the overall return on investment that a platform such as Magento offers to its clients is monumentally higher than what other platforms currently allow.

There is a reason why the platform is preferentially picked by big businesses- and it isn’t just affordability. Rather, it is because these big businesses realize the efficacy and scalability which they can achieve by using this platform.

Wrapping It Up

In conclusion, therefore, while we do believe that every platform offers its own unique features, it is worth understanding that small businesses are far more likely to grow in the future if they make the right investments, rather than making small investments- which are only likely to restrict growth rather than allow or nurture it.

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