Ways of charging on e-commerce platforms
The e-commerce platform is the central supporting pillar of a virtual store. It represents both the storefront that the user will access to go shopping and the management tool for the store owner to run the daily business.
Drawing a parallel between the virtual and physical worlds, the platform will be your salesperson and your device for swiping the client’s card. That is why it’s important to choose the correct platform.
For a technical look at the types of e-commerce platforms available on the market, go to the post where we give details of the 3 leading types of technology:
- open source;
- and on-premises.
Prices vary greatly in terms of platforms – initial and monthly investment – and quite often the resources available for acquiring the ideal model are directly proportional to the quality of the developer and the level of customization permitted on the platform.
Specialists recommend, however, that investment in the platform should not exceed 15% or 25% of the total funds available for the project.
It is important to evaluate how your competitors are positioning themselves, which model best fits the product that will be sold and what the target audience is.
Moreover, irrespective of the model chosen, one must evaluate the developers and never forget to plan the operation right through, taking into account other pillars of the business, such as logistics, customer service, marketing and the product.
It is important to be familiar with and understand the differences between the platforms – there is a variety of prices and business models – as well as the precautions when offering your product on each of them.
Among the business models available, worthy of mention are pay-as-you-go, purchase of a software license, purchase of the source code and open source. Check this out:
This is the most common model. Here, the supplier develops a standard platform and commercializes the user license. There are several ways to charge:
- The most common are the Software-as-a-Service models, where there is no cost for setting up or licensing the system, only a variable amount according to store sales.
- In some cases, payment is an amount per visitor, page views or product limit.
In this model, the entire development and evolution of the platform is the responsibility of the supplier, leaving the client free to look after what is important for his business or, in other words, focusing on increasing store sales.
Another responsibility of the supplier also involves the entire server infrastructure. The store owner does not have to worry about these responsibilities.
Purchase of a Software License
There is an initial investment to purchase the software, payment for a user license and an annual maintenance fee in the region of 18 – 22% of the cost of the software.
There is no monthly fee, but it usually requires hiring an implementation company to handle the entire development of integrations, implementations of new functionalities, application of updates or upgrades.
All development undertaken is the property and responsibility of the client. In addition, the infrastructure and servers are also the storeowner’s responsibility.
Available on the internet at zero cost, this type of e-commerce platform entitles you to ownership of the source code, but you need to hire a specialized company to carry out the necessary customizations.
In these models, the developer will undertake a few basic customizations to the tool and install the platform in the chosen datacenter.
After launch, the features of this model are quite similar to those of purchasing a license, as a technology team will be required for maintaining the infrastructure, making corrections and evolution, among other services.
Therefore, the open source model cannot be confused with a free model. There will always be the initial development of the system, possible upgrades over time and the cost of infrastructure and servers.
The only difference between the open source and the on-premises models is that the source code of the former is acquired free of charge, while that of the latter is paid to a developer.
Thereafter, maintenance costs and evolution are quite similar.
Currently, several major companies like Whirlpool, MegaMamute, Sony, Lego and Disney, among others, have already adopted the Software-as-a-Service model, where the supplier’s remuneration is a variable of turnover. This adds predictability to costs, as well as adaptation as sales evolve.