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What is the difference between hosted and self-hosted ecommerce platforms?

What is the difference between hosted and self-hosted ecommerce platforms?

Choosing the right ecommerce platform is a crucial decision you need to make as a business. With so many options available, it can be challenging to know which platform to choose. One of the most fundamental questions you'll need to answer is whether to opt for a hosted or self-hosted platform. Each has its advantages and disadvantages, so it's crucial to understand which one is the best fit for your business needs.

In this blog, we'll explore the key differences between hosted and self-hosted ecommerce platforms and help you make an informed decision on which one is right for your business.

Hosted vs. self-hosted ecommerce platforms

There are two primary ways you can run an ecommerce storefront – on hosted or self-hosted platforms.

Both come with pros and cons, therefore it’s important to do your research and understand your needs and expectations before making a decision.

Hosted: Hosted platforms are provided by a third-party provider, and offer a range of features you can utilize. One of the top reasons people choose a hosted platform is because of how hands-off it is. Normally the third-party is handling most of the set-up and maintenance of the storefront.  Incorporating digital sales rooms into a hosted platform can further enhance customer interaction and sales efficiency.

Self-hosted: Self-hosted platforms require you to take a deep dive into your online storefront and give you total control over your store. A self-hosted platform requires you to purchase and maintain your own website server. It gives you total control over your storefront, but also requires more work and money on your end.

Before making a decision, it’s important to decide how much work you want to dedicate to your storefront, as well as the amount of control you want over it.

Hosted ecommerce platforms

If you want to start an online storefront, and not have to worry about the ins and outs of the technical side, a hosted platform might be the right decision for you.

Advantages of a hosted ecommerce platform

Hosted platforms give you the tools you need to quickly create a store, and start selling immediately. Hosted platforms are also going to provide support in maintaining your store, so you don’t have to deal with the back-end of the site. Furthermore, by integrating ecommerce automation into a hosted platform, businesses can further streamline their sales and operational processes. A hosted site lets you focus on your primary business activities while still delivering a top-notch storefront.

Disadvantages of a hosted ecommerce platform

One of the main downsides of a hosted platform is the lack of control over your storefront. With a hosted platform, you don’t get the customizability you would with a self-hosted site; this can limit creative ability and overall functionality of your storefront.

Other features that may be limited when using a hosted platform are:

  • Payment options

  • Shipping options

  • Data analytics

  • Customer service tools

Lastly, if you’re using a hosted platform; there will be fees associated with the hosting and transaction costs.

Self-hosted ecommerce platforms

Self-hosted platforms give you complete control over your online storefront, they also require more attention on the back-end of the site. If you’re willing to put in the work, and seeking that total control; a self-hosted platform could be what you’re looking for.

Advantages of a self-hosted platform

Self-hosted platforms provide a wide range of perks, as long as you’re willing to log the man hours to maintain the site, some of these perks are:

  • Customize to your exact specifications

  • Control over your data and content

  • Ability to scale up or down

  • Control over inventory management

  • Customer service control

With a self-hosted platform you can provide the customer with a shopping experience based on your customizable specifications.

Disadvantages of a self-hosted platform

With a self-hosted platform, you’ll get out what you put in. Depending on the amount of time put into a self-hosted site, you’ll run into drawbacks such as:

  • Security risks – If the time is not taken to properly secure your site, you could leave your storefront vulnerable.

  • Difficult to scale – What acts as an advantage, also can be a disadvantage. As you grow, you’d have to scale your site to handle large amounts of traffic and orders.

  • Problems in managing your site – Knowledge of coding languages and technical expertise will be needed to provide a sound, self-hosted site.

If you’d like to read more about the best hosted, and self-hosted ecommerce platforms to choose from; check out this article that runs through the Top 8 ecommerce platforms to look for in 2023.

What else to consider: costs of hosted vs. self-hosted ecommerce platforms 

Hosted ecommerce platforms

The main cost factors to consider if you decide on a hosted platform are:

  • Cost of hosting - How much does the platform charge for hosting?

  • Payment processing fees - What types of fees are taken for processing?

  • Platform specific miscellaneous costs - What additional fees does the platform charge outside of the hosting and processing fees?

Self-hosted ecommerce platforms

A self-hosted platform can make for some hefty payments, but is it worth it to have complete control over your storefront? Some costs to think about with a self-hosted platform are:

  • Payment for maintaining the site – You’ll either have to pay someone in-house, or hire a third party specialist to take care of the back-end site work. This includes all regular maintenance and updates.

  • Software licenses – Self-hosting will require software that must be paid for (unless you go open source with Shopware, Magento, and many others).

  • Domain fees – Registering your domain will cost money.

It’s important to know what you want, and how much money you’re willing to spend to get there; when making a decision pertaining to the cost of an ecommerce platform. Additionally, when considering a self-hosted platform for b2b ecommerce software, it's crucial to factor in the potential for higher customization and integration capabilities that can significantly benefit B2B operations.

Choosing the best hosting option for your ecommerce business

As you can see, there are pros and cons to both hosted and self-hosted platforms. Here’s a quick comparison table overview to give you an idea.

Hosted platforms

Self-hosted platforms

Advantages

Advantages

Better out-of-the-box security 

Good out of the box performance 

Less work

Start selling ASAP

Don’t need to worry about maintenance

More control

More customization

Extensive data analytics

Handle your own customer service

A lot of flexibility and possibilities in optimization

Disadvantages

Disadvantages

Limited possibilities for optimization

Less control

Less customization

Additional hosting and payment fees

More work

More time until you’re selling

You will need to take care of security and performance 

You will need to pay someone to setup and maintain your site, or do it yourself

Tips for choosing a hosted vs. self-hosted platform: 

  • Do your research – Figure out what your path is going to look like, and what kind of storefront you want.

  • Consider how much money you are willing to spend –  Each of the different platforms we’ve discussed come with different costs, make sure you make a decision that aligns with your budget.

  • Consider how much time you have to put in – Make sure you know how much time and resources you’re willing to allocate to your storefront before you choose a platform.

If you do your research and make a plan, choosing the right ecommerce platform doesn’t have to be a painful experience. Both hosted and self-hosted platforms are great for ecommerce. If you’d like to learn more about Shopware and how we can assist your ecommerce journey, reach out to us here. 

FAQ - Hosted vs. self-hosted platforms

What is a hosted ecommerce platform?

A hosted ecommerce platform is a platform where the ecommerce software is hosted and managed by a third-party company. This means that you don't have to worry about managing your own server or software updates, and can instead focus on building and managing your online store.

What is a self-hosted ecommerce platform?

A self-hosted ecommerce platform is a platform where you host the ecommerce software on your own server. This gives you more control over your website, but also requires you to manage your own server and software updates.

What are the advantages of a hosted ecommerce platform?

The advantages of a hosted ecommerce platform include easy setup, lower maintenance costs, automatic updates, and good technical support.

What are the disadvantages of a hosted ecommerce platform?

The disadvantages of a hosted ecommerce platform include less control over your website, limited customization options, and ongoing subscription fees.

What are the advantages of a self-hosted ecommerce platform?

The advantages of a self-hosted ecommerce platform include more control over your website, greater customization options, and no ongoing subscription fees.

What are the disadvantages of a self-hosted ecommerce platform?

The disadvantages of a self-hosted ecommerce platform include higher setup and maintenance costs, more technical knowledge required, and the need to manage your own server and software updates.

Which ecommerce platform is best for beginners?

Hosted ecommerce platforms like Shopify or Wix are often recommended for beginners due to their ease of use, user-friendly interface, and built-in features.

Which ecommerce platform is best for larger businesses?

Self-hosted ecommerce platforms like Shopware, WooCommerce or Magento are often recommended for larger businesses that require more advanced customization options, greater control over their website, and the ability to handle larger volumes of traffic and sales.

How much does an ecommerce platform cost?

The cost of an ecommerce platform varies depending on the platform, the features included, and whether it is a hosted or self-hosted platform. Hosted platforms typically charge a monthly subscription fee, while self-hosted platforms require a one-time purchase or ongoing maintenance fees.

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