Hosted Vs Self Hosted Ecommerce Solutions – Which Is Right For You?

There has been a long-standing debate in the e-commerce entrepreneur community on whether to choose a self-hosted solution or a hosted solution. Although few developers and marketers favour all in for self-hosted platforms many online retailers find it too daunting and time-consuming.

Truth be told there isn’t a single answer. Not all businesses are made equal. The e-commerce solution you choose should depend on what exactly your business needs. Various factors come from money, vision, product type, ownership, the complexity of features, effort and time have to be weighed in in order to make a right choice. This article looks at the benefits and pitfalls of both hosted and self-hosted e-commerce solutions and lists the right approach for each business type.

Hosted E-commerce Solutions

Hosted e-commerce solutions are where the entire suite needed to run an online store is hosted on a third-party server. This is typically a software which sits on the provider’s server while an e-commerce entrepreneur can run their online business without a need for any technical intervention from her side. Examples of hosted e-commerce solutions are Bigcommerce, Shopify, and Volusion.

Advantages of Hosted solutions

  1. Support – You get support with marketing, technology and every aspect of running an online store when you choose a hosted platform. Good hosted solution providers like Shopify and Bigcommerce have a dedicated team of experts who are available on phone and chat to help you out with various nuances of running an e-commerce business.
  2. Security – Hosted e-commerce solutions take security seriously and are usually PCI compliant. With hosted solutions, you don’t have to add any extra plugins or tweaks to make your online store more secure. It is taken care by the solution provider itself.
  3. Run your own ship – Hosted online store solutions give you the option to design, manage inventory, run promotions, automate emails and many more. You can run your own ship even if you don’t have any technical knowledge.
  4. Get started fast – Within a few seconds, you can create a store on any hosted e-commerce solution provider. This means you can launch fast and start making money soon.
  5. Automatic Upgrades – Hosted solutions upgrade your site automatically and keep all your extensions in sync. So no need for maintenance work from your side.
  6. They come with a set of best practices – Hosted solution providers have refined their software for years. They come with a pre-installed set of best practices like PCI compliance, safety certificates, checkout pages, SEO, filters, navigation, search bar, speed, and performance. This makes it more convenient for e-commerce entrepreneurs who don’t want to sweat the small stuff.

Disadvantages of Hosted Solutions

  1. Can’t scale features at wish – If you want to add a particular feature to your online store you have to wait for the solution provider to launch the feature if at all it is in their feature launch pipeline. Customizing your online store based on your will is not going to happen with hosted solutions.
  2. You can’t control pricing – The solution provider might decide to increase the price and you will have no other option than to pay for it.
  3. Contracts and lock-ins could be frustrating – Few hosted solutions have locked in a period with their customers. Paying money in advance might help you get a deep discount but might make you feel stuck if you are not happy with the solution or support.

Hosted solutions are right for you if

  1. You are starting an online store which has no out of the box features then a hosted solution is right for you. Your e-commerce business model is straight and your vision does not have complex features like a fancy online fashion magazine.
  2. If you are an e-commerce entrepreneur who wants to be hands-off technology then hosted solutions is the best bet. Using hosted solutions will give you more mental bandwidth to execute in other important areas of e-commerce business like merchandising, customer service, and marketing.

Self Hosted Solutions

Self-hosted e-commerce solutions are where the entire software sits and runs on web servers as chosen by the merchant. Here the merchant or the developer has to install, run and maintain the website all by himself.

Examples of self-hosted e-commerce solutions: Magento, Open Cart, and WooCommerce

Advantages Of Self-Hosted Solutions

  1. Radical ownership – You can implement the craziest e-commerce idea with a self-hosted software. The possibilities are endless. You can play with design and functionality as per your wish and will.
  2. Can scale features not just products – You can add any number of features, launch multiple sub-domains and even run multiple online stores from a single dashboard. There are no external dependencies stopping you from adding a feature.
  3. Large developer community access – With Magento and WooCommerce as 2 popular e-commerce platform you can reach out to competent certified developers across the world to build a thriving online store. Check Magento Developer Directory and WooCommerce Experts
  4. Competitive advantage – Deeply personalized experience and customer centricity which a self-hosted solution like Magento and WooCommerce provides can’t be replicated by any hosted solution. This can give you a competitive advantage over other online retailers in your niche who uses a hosted solution. You can check the technology used by tour competition using

Disadvantages of Self Hosted Solutions

  1. You are on your own – When things break you and your team are the only ones who will have to stand up and rescue. Although support is provided in the form of documentation dedicated support which a hosted solution provider gives is absent.
  2. You need a team – With self-hosted solutions you will need a team of designer and developer. Without this, you can’t build a good looking e-commerce website. You will need a team even to update your extensions and software.
  3. Security – All though self-hosted solutions come with its own security code it is for you to protect your online store from DDOS or SQL injection attacks. You should make your online store PCI compliant and might need to hire a professional to fix security issues and loopholes in your online store.
  4. Optimization – Your team will have to optimize the website for best practices. Self-hosted solutions don’t optimize themselves, you need to optimize for speed, server uptime and other performance factors and best practices to give a good experience to your users. This demands a lot of knowledge and time from your end.

Self-hosted is right for you if…

  1. You have a team, money and the vision of building a million dollar e-commerce empire from day one.
  2. You are looking to have a clear competitive advantage by providing an extraordinary online store experience to your customers.

Do not Fret – You can always switch

There are e-commerce entrepreneurs who are still undecided about the right approach. Especially when they have a large vision but they don’t want to go all out from day one. Such business owners can choose a hosted solution to start with and then switch to a self-hosted solution. There are enough services and plugins on the web to help you with the same safely without zero or minimal downtime.

After working 7+ years as a digital marketer for startups and large enterprises I quit my job to start EcommerceYogi. Here I share the exact same tactics which I have used to drive millions of users per month to e-commerce stores. Follow me on Linkedin and Twitter to stay connected.