Razoyo works principally with mid-tier merchants ($1M to $100M / year in online revenue). It’s the segment of the market we’re most familiar with and the target audience for this article.
About half of our work is done for B2B merchants some of whom are on B2B-specific platforms. We feel like we have a pretty good sense of both B2B and B2C merchant needs.
I’m not going to try to boil things down into a chart with checkboxes. There are plenty of platform comparison charts floating around the web, most of which are outdated by the time they are published. Their comparisons are often slanted to the favor of whichever platform is sponsoring it.
In this article we focus not on the feature sets of various platforms, but, the characters and direction of the companies behind them. Remember that you are just as dependent on where your platform is headed as where it is now.
Magento 1 Migration Options for Small, Medium and Enterprise size businesses
How does Razoyo classify the size of your business… glad you asked!
Small Business Definition
- Mom and pop or hobby business up to a full-time small business
- B2C or B2B with a B2C-type sales process
- Few integrations with 3rd party services
- Sales come from a web site and maybe a few online marketplaces
- Limited catalog size
If your investment range for building your web site is less than $25,000, this may define your company.
- Business with employees
- B2C and/or light B2B
- Moderate number of integrations and custom automations
- Catalog size up to tens of thousands of SKUs
- You sell via your website, some marketplaces and/or limited number of retail locations
Expect to invest somewhere between $50,000 and $150,000. Of course, we can help you narrow that number down with a more specific set of requirements. You can reduce the overall cost of the project if you have the ability to do some of the work.
- Multi-faceted business or business unit
- B2C and/or complex B2B
- Multiple integrations and custom automations
- Catalog size in hundreds of thousands of SKUs or more
- Part of a sophisticated delivery system including web, marketplaces and physical locations
Expect the migration to cost more than $100,000, potentially a multiple of that.
Small Business Options
Shopify… or not
If you’ve investigated opening a web store, you’ve probably heard of Shopify. They are everywhere. BuiltWith estimates that Shopify hosts more than 740,000 web stores in the United States alone.
Shopify boasts a large selection of apps and is connected to all of the marketplaces. They have particular strength in serving the fashion and apparel industry. Consequently, they have a lot of useful features built-in or available as inexpensive add-ons for that sector.
Customer support is easy to access and generally pretty helpful. The interface is designed with small businesses and entrepreneurs in mind, so, most find it relatively easy to use.
Rates are reasonable (starting at $29/mo), however, Shopify charges you a percentage of your sales which you can somewhat get around if you use their payment processing service. Theirs can be more expensive than one you already have a relationship with.
The big downside of Shopify is that their platform doesn’t play well with others. In digital commerce where competitiveness increasingly lies in the ability to connect services across the internet, this can be a serious liability. There is an API, but its scope is limited and it does not appear to be a focus of investment. When you need customizations or integrations that go beyond available apps or themes, the Shopify advantage begins to fade.
Additionally, Shopify has a long list of types of products that you cannot sell on their platform. Along with the usual limitations on illegal items like controlled substances and human trafficking, they have recently decided to exclude firearms and firearm accessories.
There are also some strangely excluded items like event tickets, human hair, and hookahs, among many, many more. Some of the exemptions come from Shopify, others come from their payment processors. Because Shopify limits the choice of payment processors, some product categories are excluded simply because you cannot take payment for them.
So, before you get too excited about moving to Shopify, check to make sure your product type can be sold there.
Finally, a lot of people complain about Shopify’s lack of support for adding non-commerce content like blog articles, guides and the like. It’s just not built for supporting both content and commerce.
If your store is small and does less than $1M in business each year and you just need something that is easy to use, moving your M1 store to Shopify may make sense.
BigCommerce also offers a SaaS platform with monthly fees starting around $29. BuiltWith estimates there are about 35,000 web stores running on BigCommerce in the US.
While far fewer BigCommerce stores exist, they are the second-largest SaaS platform for ecommerce in the world. While I don’t have specific data to back up the conclusion, BigCommerce does cater more the mid-tier merchant (vs Shopify’s small merchant focus), so, I expect their average merchant sales volume to be higher.
Playing Well With Others
The big difference philosophically is that BigCommerce thrives on playing well with others. They provide excellent tools for software developers to enhance their platform. They have invested an enormous amount of time and money in their Open SaaS approach. Developers can add sections to the admin panel and make unlimited API calls for BigCommerce Enterprise users.
BigCommerce’s commitment to integrating with other platforms may best be evidenced by their headless initiative. Razoyo has empowered several content-based WordPress sites with BigCommerce’s Commerce-as-a-Service. This approach allows teams to continue managing their content with all the flexibility, SEO-friendliness and general panache of WordPress while managing ecommerce with BigCommerce.
One of the main concerns we hear about BigCommerce is that you have to subscribe to their Enterprise service (starting around $1000/mo) to use custom filters. For small merchants with large catalogs this can be a hurdle, but, for mid-tier merchants, the other advantages (hosting included in price, upgrades and bug fixes taken care of for you) generally still result in a lower total cost of ownership than Magento 2.
WordPress / WooCommerce
I’m going to be brutally honest here… developers like us tend to hate WooCommerce, which seems counter-intuitive. WooCommerce is open source, so, we should love it, right?
WooCommerce boasts an impressive following, for sure. It is responsible for 33,822 of the top 1 Million sites in the US which is more than Shopify’s 26,905 (as of 8/7/2019) according to BuiltWith. Its success is mainly driven by its ease of implementation.
Brand marketers, big and small, love to spin up WordPress sites when they are putting together content and accounts for a whopping 53% of CMS-based web sites world wide. Yeah, many, many of the sites you visit are created on WordPress. While the next biggest platfrom, Wix, is a mere 7%.
There are millions upon millions of WordPress admins and content marketers out there, tons and tons of WordPress plug-ins (apps), great, dedicated hosting companies and other bases of support for WordPress. Any admin can install WooCommerce into their WordPress site with just a few mouse-clicks.
Why Not WooCommerce
- WooCommerce is notoriously unscalable. Yes, you could run a large ecommerce store on it, but, it would take a lot of effort to maintain and optimize it.
- Just installing WooCommerce will slow down your web site. It is an unabashed resource hog.
- WordPress is not designed to provide the level of security needed for an ecommerce web site.
- WooCommerce has limited extensions. If you require any slightly-fancy ecommerce functionality, you’ll have to pay a developer to make it happen.
When To Consider WooCommerce
So, if you already have a killer, content-based WordPress site and just want to sell a mug or t-shirt occasionally, WooCommerce might be an option. This article is not for those merchants, it’s for dedicated merchants trying to figure out what to do when Magento pulls the plug on support in June of 2020.
While WooCommerce may be good for proof-of-concept projects, if you love content and like the power of WordPress, we highly recommend a headless implementation of BigCommerce on WordPress.
Magento Open Source
Magento 2 Open Source is the new name for Magento 2 Community Edition.
Since you will be coming from Magento 1, Magento 2 will have a familiar, albeit updated, look and feel. Some of the admin sections have been moved around and there are some definite changes to the way some of the key pieces work, but, overall, it’s about 85% comparable.
If you are interested in what has changed, you should read our series on the State of Magento 2.
Why Magento 2 Total Cost of Ownership is High
- Requires more horsepower – it takes more server resources to effectively run Magento 2, 50% or more in our experience.
- You have to repurchase extensions and they may be more expensive.
- Some extension functionality has been replaced with subscription services (e.g., some of the old WebShopApps extensions have been rolled into ShipperHQ which has a monthly subscription fee).
- Bugs, bugs, bugs. While the Magento team has worked to squash bugs, it seems like each new release actually creates more of them. As of May 2019, despite the large number of bugs being ‘squashed’ each release, the total number of outstanding bugs was hovering around the same amount (1000s). While you expect this from a less mature platform, it’s frustrating, expensive and unpredictable.
In Magento’s defense, a notable ecommerce advocate at Google pointed out to me that “Bug count is usually proportional to market share.”
Magento 2 Open Source is definitely a viable option for Magento 2 clients, just don’t expect the same low cost of ownership.
Moving from Magento 1 Enterprise to Magento 2 Open Source
We have moved a couple of merchants from Magento 1 Enterprise Edition to Magento 2 Open Source. The merchants saw this as a way to save some money. However, Magento’s migration tools do not include any support for migrating from Magento EE to Magento OS.
There are some important differences in the databases between the two systems, so, it will take some developer time and effort to pull off your data migration. This can run in the tens of thousands of US dollars. It is possible that you will spend your entire first year savings on your license in additional cost moving your data over.
Magento 2 will be familiar to Magento users, have some important feature enhancements but more bugs and higher cost of ownership.
Magento Commerce (non-cloud) with Business to Business
If your business has a large B2B component to it, Magento Commerce (fka Magento Enterprise Edition or, Magento EE) with B2B functionality is definitely an option to consider. It’s important to note that you have to explicitly install the B2B functionality if you intend on using those features.
Handy Magento Commerce B2B Features
- Associating multiple users with a single company
- Allowing the company to have an admin role
- Shared catalogs – this gives you the capability to create catalogs to make pricing or product availability specific to a set of Companies
- B2B payment methods
- Requisition lists (actually just another set of wish lists, honestly)
- Quick order form
Key B2B Features Missing in Magento
- Hierarchal company accounts – for reporting and assigning sales representatives to accounts, you need to be able to break out company ABC to ABC – East and West regions, for example, which is not a feature of Magento B2B
- Multiple prices lists – each company can only be assigned to a single ‘shared’ catalog. In many B2B situations, this is not viable. For example let’s say you have customers that receive pricing from vendors by virtue of belonging to their specific pricing group. You should be able to assign pricing lists by brand and apply each to a customer.
- Calculated price lists – while you can calculate discounts using pricing rules, you don’t want price list prices to show up as discounts.
- Defineable roles within Companies – currently you can just assign an admin and all admins have the same powers. We have many B2B implementations where there are some buyers that can use certain shipping addresses, some that can edit requisition lists, and so forth.
While not a terrible first attempt at B2B functionality, it seems more aimed at checking off boxes in a comparison chart than a true attempt at designing a B2B system. We also feel that tying price lists and custom catalog definitions to the same entity was a big design miss.
If you have serious B2B needs, we recommend a platform specifically designed for B2B commerce like OroCommerce.
One of the main reasons often cited for getting a Magento license has been access to Magento support. I’ve dealt with many of the Magento engineers and system architects and would classify them as truly world-class.
However, our experience has been that while Magento support sometimes has solutions to issues that can be delivered as a patch, working with them can be difficult. In too many cases the answer is something like, “that is a known bug and will be addressed in a future release,” leaving the merchant with little choice but to have their developer fix the bug or develop a work around until Magento addresses it on their timetable.
When you pair that with the fact that the process for getting engineering support from Magento requires development work in and of itself, it’s difficult to swallow support as a key benefit of M2 Commerce.
Magento 2’s B2B feature set is still in relative infancy. If your audience is mainly B2C but you have some limited B2B needs, it may be a good way to get your toe in the water, but, serious B2B players will either need to customize Magento extensively or choose a more appropriate platform.
If you have dismissed BigCommerce because it is a SaaS platform, you may want to revisit that decision. BC has clearly focused on the mid-tier while many speculate that Magento has less and less appetite for that segment.
Our experience is that migrating from Magento 1 to BigCommerce is less expensive than migrating from Magento 1 to Magento 2. Given BigCommerce’s overall cost of ownership is lower than Magento 2, it’s certainly worth a good look.
BigCommerce still has some limitations you need to watch out for, but, some of these issues can be overcome. These include:
- Lack of support for multi-domain. While this is on their road map, as of August 2019, it was not available.
- Multi-location inventory. This can be solved by plugging into an ERP system, but, this is one area where their community of developers gives Magento an ‘out of the box edge.’
- Multi-currency. Also not currently available but on the same development path as multi-domain.
Magento Commerce Cloud
The accolades and criticisms of Magento 2 in the previous sections all apply here as well. While implementing Commerce Cloud has some advantages, it also comes with some limitations including deployment downtime. They host on AWS and the standard package includes multi-region support and built in back ups, all of which are powerful features.
However, when negotiating your license renewal you should ask for pricing with and without hosting. You may not need the level of backup they provide. At Razoyo, for example, we actually prefer to deploy Magento Commerce on Google’s cloud because it works well with our zero downtime deployments and our dev ops structure.
If you are coming from Magento Enterprise, migrating to Magento Commerce takes far less effort than downgrading to Magento Open Source. It is not, however, effortless. The more extensions and customizations you employ, the more difficult the move will be.
BigCommerce’s Enterprise service has the baked in advantages of a SaaS platform as discussed above like maintenance, upgrades, and support built in. The Enterprise offering’s expanded feature set and world-class support make it especially attractive.
If your mid-tier business is primarily B2B, you will have a hard time finding a platform that fits more of your needs than OroCommerce. (If your business is a large enterprise, you will also find the flexibility of customization and merchandising refreshing compared to the enterprise-specific platforms listed below.) The long and short of it is that OroCommerce is designed specifically to meet the needs of merchants selling to businesses.
While we even have a downloadable feature-to-feature comparison between OroCommerce and Magento’s B2B, it’s much more than a set of features that sets them apart. OroCommerce was built from the ground up (by the Magento OGs, by the way) to support B2B. Oro includes impressive B2B features like built-in CRM (Oro started as a CRM platform), quoting, sophisticated client account management, price list management, and customizable web catalogs.
However, as you use the product you realize that it flexes around B2B selling and, in our experience, wins the open-source support and hosting awards hands-down with proactive management of your site performance and a teamwork approach (working with developer, client and service providers) to ensuring reliability, availability and performance.
SalesForce Commerce Cloud (fka DemandWare)
If your business is big enough and you are a user of SalesForce you may want to take a look at their ecommerce offering. They purchased DemandWare a while back and it is well integrated with their system. As with all SalesForce options, though, expect to hire a team of experts to customize it. I only recommend using SalesForce Commerce Cloud for B2B applications or where support of sales agents and teams is required.
SAP purchased Hybris in 2013 and has integrated it into their SAP customer experience. Hybris is especially known for its prowess in managing enterprise-level implementations for large, corporate merchants. If you need the ability to support a large, diverse team of merchandisers and require workflows that allow for multiple levels of approval, Hybris is designed for you. It is not priced for mid-tier merchants.
I’ll oversimplify this by saying that WebSphere is IBM’s Hybris…. queue hate mail from IBM team. In short, it is not priced or designed for mid-tier merchants.
Making the platform decision
Razoyo is here to help you and there is no charge or obligation for an initial consultation. Reach out! We love to talk shop.