Small businesses are a big deal in the US economy.
Fifteen percent of the US population was involved in business startups in 2020 and, according to the US Small Business Administration, small businesses (defined as a business with fewer than 500 employees) made up 99.9% of all U.S. firms in 2020.
Shockingly enough, even after the digital acceleration of the pandemic, one in four small businesses still don’t have their own website. But with online sales growing by the year, the days of getting by without an online presence are slowly fading.
Not to mention many ecommerce startups don’t survive long enough to see success. In a survey by MarketingSignals, 90% of ecommerce startups failed within the first 120 days, largely due to poor marketing performance and weak search engine optimization.
Plus, there’s the challenge of finding a market for your product or service; managing cash flow; competing with retail giants; and maintaining quality customer service.
But this article isn’t meant to scare you away from starting your own business. Rather, we want to equip you with the tools to stay in that 10% of successful startups. And if you’re an aspiring entrepreneur looking to launch a startup, building an ecommerce website is a crucial first step. Of course, with so many ecommerce platforms on the market, the options can get overwhelming, especially for a startup that’s just getting off the ground. Every platform offers its own basic features and hosting options, so it’s important to understand the key differences and choose the one that works best with your online business strategy.
Choosing the Right Tech Stack
To choose the right ecommerce software, you’ll first need to know what a tech stack is.
A tech stack is the set of all technology services used to build a single application, whether it be a mobile app or a desktop website. These technologies include programming languages, libraries and frameworks such as Python, React, JS, PHP, Node.js and more.
The tech stack consists of two layers: the frontend (aka the client-side) and the backend (server-side).
Think about the frontend as the storefront of your online shop. Just as customers window shop, evaluating each store based on what they see from the outside, digital shoppers can evaluate your online store based on front-facing aspects such as web design and user experience.
But beyond the online storefront, ecommerce platforms also act as software applications on the backend, allowing retailers to manage their marketing, sales and operations. Ecommerce software can also integrate with third-party applications and tools, so that you can link your site to your social media platform or content management system.
What Startups Should Consider When Choosing an Ecommerce Platform
Depending on the specifics of your business — the number of products you offer, the CSM you use, the channels you want to sell products on — you’ll need to decide what essential features your ecommerce solution should have. No platform is the same, and no platform fits every business model, so it’s important to assess your priorities.
Here are just a few characteristics to consider when shopping for your online ecommerce platform.
Cost of ownership.
The cost of your online platform can vary greatly depending on the size of your business and the features you require. Pricing can range anywhere from free to thousands of dollars — however, paying more does not always guarantee a better user experience. And on the flip side, the cheapest option may not include all the necessary features and add-ons, which means you’ll only end up paying for them elsewhere.
Here are just a few of the features you may need to budget for when choosing a platform:
Programming and functionality.
One of the major goals of building an ecommerce site is to grow and scale your business, so you need a platform that can grow with you, too.
If your business is just getting off the ground, you may not need a host with high-traffic capabilities or unlimited bandwidth just yet. But if the goal is to expand quickly, then the platform you choose needs to be able to handle those demands both now and in the future.
If you have a large catalog and require multiple product pages, you’ll want a site that allows you to feature unlimited products. Or, if one of your marketing campaigns goes viral, your site needs to be flexible enough to handle a large influx of traffic.
Future-proofing your tech stack.
Following the accelerated digital transformation during the pandemic, the need for ecommerce technology and adaptation is greater than ever. As retailers race to be digital-first through new digital channels and experiences, store owners need to be prepared to modernize their tech stacks to stay ahead of the competition. However, traditional, monolithic ecommerce platforms — which link the frontend and backend together in a tightly coupled system — don’t always have the flexibility to customize a website and incorporate necessary features. But with composable architecture, you can adapt your tech stack to achieve agility and resilience in the face of digital disruption as well as meet your personal business goals.
Ease of use.
The last thing you want is to waste time trying to learn all the ins and outs of your ecommerce platform. Whether it’s unexpected software updates or hosting challenges, you don’t want to take away from the time you could be spending on building out your site and making it perfect.
Of course, if you already have extensive IT knowledge, this may not be an issue for you. But if you’re just getting your feet wet with ecommerce technology, it’s probably best to choose an ecommerce platform with an easy-to-use interface and website builder to help you build your website.
On top of that, try to find a platform that offers excellent customer support, such as a 24/7 chat feature or ticket option to help you maintain your website and troubleshoot any issues you may have.
For some purchases, customers could have more than 375 digital touchpoints before making a purchase — which would mean you have over 375 opportunities to win them over.
With shoppers buying on more devices than ever, it’s vital that your business invests in an omnichannel strategy. Compared to a simple multichannel approach, omnichannel means creating a seamless brand experience across all channels, whether they be Instagram, Facebook, your own online store or even your brick and mortar store.
So, before you land on an ecommerce platform, make sure it can easily integrate with each of your channels, and check to see if the website is optimized for desktop, smartphones and tablets.
Ecommerce Platform Options
Here we’ll discuss four main types of ecommerce platforms to choose from, each of which can benefit different kinds of businesses and have their own unique functionalities.
Below we’ve outlined each type, along with examples of the most popular ecommerce platforms to help give you a better picture.
With this kind of ecommerce platform, anyone is free to access and modify all aspects of the source code — hence the name open source.
Because of this customization aspect, open-source platforms are typically more popular among businesses that want complete control over their website. Plus, with a widespread community of developers building and monitoring open-source platforms, there is plenty of knowledge and ideas to take advantage of.
However, modifying source code does require some previous technical knowledge or a dedicated developer team to maintain and build out the site. And the more code that you modify, the more complex the system becomes, making it more difficult and expensive to maintain.
Security breaches are also a concern, since the source code is open for anyone to download and customize, not to mention ecommerce sites often contain loads of financial data and personal information.
Because of these downsides, it’s no surprise that open-source platforms are only 46% of the consideration set for large ecommerce brands.
Nonetheless, there are still several platforms on the market that utilize open-source infrastructure:
Magento: Owned by Adobe, Magento offers three versions: Magento Open Source, Magento Commerce and Magento Commerce Cloud.
WooCommerce: WooCommerce is a free, open-source shopping cart plugin that can be added to an existing WordPress website or blog.
PrestaShop: Written in PHP programming language, PrestaShop is a free, open-source ecommerce platform that allows users to pay for website add-ons and plug-ins to customize it for their business.
So what kind of businesses should be using open-source?
Long story short, if your business has the budget to cover the expenses of building and maintaining the source code and your business needs are complex, open source may be your best bet.
Contrary to open-source, Software as a Service, or SaaS, removes the complexity from building an ecommerce store. With this type of platform, users can pay a monthly subscription fee to use the software, hosting and updates, as well as new features and security maintenance. So, instead of having to customize the platform all on your own, using a SaaS solution essentially means you’re “renting” the platform.
While this does mean that the user loses some control over the customization of the site, SaaS platforms are generally easier to use, since the code, security and hosting are taken care of by the SaaS provider.
Another huge advantage of SaaS is its scalability. As your business grows, your website grows right along with it. New features and functionality can be added with new apps and updates; SaaS platforms often include unlimited bandwidth; and you can integrate new sales channels (like selling on eBay or Amazon).
On the downside, some SaaS solutions can lock you into using certain apps or features, making it difficult to choose the solutions that best suit your business. For example, Shopify has a proprietary payment provider, so if you want to utilize a different payment gateway, they charge additional transaction fees up to 2% of each sale. Plus, not using their payment prodiver means that you lose access to special features like multi-currency.
So, if your business is more focused on growth and less on infrastructure, SaaS may be the best option for you. However, if you want the freedom to choose specific ecommerce features for your website, you might want to consider a SaaS platform that is open to and easily integrates easily with the solutions you need.
If SaaS sounds like the right fit for your business, check out these major SaaS players for some inspiration:
Shopify: Popular with small businesses and ecommerce beginners, Shopify offers three different business plans: Shopify Lite, Basic Shopify, Shopify and Advanced Shopify. Through its extensive app store, Shopify users can access hundreds of free and premium apps, however those costs depend on the app itself and can quickly add up to a hefty price tag.
Volusion: Founded in 1999 as a web design agency, Volusion eventually became one of the first SaaS ecommerce platforms in the early 2000s.
SquareSpace: Commonly used by small businesses and creatives, SquareSpace is a popular content management system where users can sell physical or digital products.
Wix: Similar to SquareSpace, Wix is a site builder that offers free themes, templates and an easy-to-use drag-and-drop user interface.
Shift4Shop: Formerly known as 3dcart, Shift4Shop is an all-in-one ecommerce software with a focus on SEO, offering a wide variety of tools such as Google AMP for products and 301 redirects.
Now, what if we told you that you could have a platform with all the benefits of both a SaaS platform — such as a hosting provider and a lower total cost of ownership — and the flexibility of an open-source platform?
This is exactly what BigCommerce aims to do.
As one of the leading open SaaS ecommerce platforms for mid-market and enterprise brands — as well as a growing headless commerce provider — BigCommerce helps merchants to grow and scale their ecommerce stores.
Adaptable for both small businesses and large enterprises as well as B2B and B2C merchants, BigCommerce offers extensive SEO capabilities, a low total cost of ownership, flexible APIs — and the list goes on:
Transparent subscription pricing and no additional transaction fees.
Level 1 PCI compliance and a free SSL certificate to make your site safe and secure.
An abundant app store, 600 App Partners and thousands of agency partners.
Supports 65+ payment gateways, such as PayPal and Amazon Pay, as well as 140 currencies.
Extensive SEO tools, such as fully customizable URLs and domain names.
If you have background coding experience, you can tweak the HTML and CSS for further customization.
Especially in today’s ever-changing ecommerce landscape, online retailers must be agile enough to respond to digital disruption and stay up to date with current trends.
Unfortunately, many ecommerce infrastructures can hinder users from making customer-facing changes quickly. Many traditional, monolithic platforms connect their frontend and backend technologies in a tightly coupled system — meaning they don’t have the flexibility for users to customize their website and incorporate necessary features.
This is where headless commerce saves the day.
Think back to the two layers of a tech stack: the frontend (client-side or presentation layer) and the backend (server-side). With a headless infrastructure, an ecommerce platform can decouple the frontend and backend layers, giving users the freedom to customize the frontend without jeopardizing the functionality of the backend. This kind of platform gives merchants more creative control, a lower cost of ownership, a faster time to market and all the benefits of a hosting provider.
As a growing headless provider, BigCommerce has a decoupled infrastructure that allows merchants to run multiple stores across various frontend solutions — all from one BigCommerce account. Whether it’s a design experience platform (DXP) such as Adobe Experience Manager, a CMS like WordPress or an Email Service Provider (ESP), merchants have the flexibility to customize their presentation layer how they want without having to worry about the commerce engine running behind the scenes.
Other Challenges Ecommerce Startups Face
In 2019, the average startup had four employees, and Statista projects there will be 3,750,248 firms with less than five employees in 2022 — which means there’s no shortage of competition in the startup world.
And especially as a newcomer to the ecommerce industry, you’re bound to face some challenges along the way, but if you can tackle them early, you’ll be well on your way.
Getting good data and doing market research.
One of the biggest decisions you'll make as an entrepreneur is figuring out what you will sell and who you will sell it to. But finding the right product and market means you first have to do your research.
The startup world is massive — and growing — with thousands of businesses fighting to make their mark in the ecommerce space.
So before diving headlong into building your website and integrating lots of new features, take time to do extensive research about the landscape, potential competitors and demand for your product or service. And as a startup, it might be a good idea to choose a niche market with fewer competitors and more opportunities for growth.
Competing against big brands.
As a smaller business, likely with a smaller budget, it’s possible that you’ll be up against big-name brands that have more money, more employees and more resources than you. And unfortunately, retail giants like Amazon, Wal-Mart and eBay have the power to brush small startups right out of the market.
So how can you avoid getting lost in the shadows? Avoid direct competition with large enterprises by choosing a less competitive niche. This goes along with doing your research and nailing down the right market and audience. If you can find a niche with fewer competitors, you’ll have more freedom to focus on growing and scaling your business.
Marketing efficiently with ROI.
With so many choices for marketing channels, such as Instagram, Facebook or Amazon Marketplace, it can be tempting to try to promote your brand on all of them. But more channels does not always equate to more sales.
On the contrary, trying to utilize every marketing tool is probably only going to cost a lot of time, energy and money. So instead of going over the top, it’s better to use these channels judiciously, testing each to find out which will give you the best ROI and then focusing your efforts on two or three.
The Final Word
In the end, there is no one one-size-fits-all platform — there’s only the solution that best suits your ecommerce business. Every startup has different priorities for ecommerce features, whether it’s more payment options, dropshipping capabilities, real-time inventory management or a user-friendly interface.
With that being said, our money is on BigCommerce.
But if you’re not ready to fully commit to any one platform, feel free to take advantage of free trials and test out each solution before coming to a decision. Luckily, BigCommerce offers a 15-day free trial (no credit card required), so you can explore all of our features and decide which plan is right for you.
We know how difficult it can be to navigate the ecommerce world on your own, especially as a startup in a saturated market. But as a platform that works with small business owners every day, we’ve seen firsthand the ways that leveraging your online store can grow and scale your business exponentially.