1. When you’re not on a SaaS platform yet
At Code we’re certain of one thing: life’s too short to run an e-commerce business on self-hosted open source software. The number of horror stories we have heard from merchants that were hosting – and thus maintaining – their own e-commerce platform ... Just don’t.
We've migrated many ex-Magento, Shopware and ex-WooCommerce users among our clients. Fine platforms, all of them, but anyone who worked with them will know they have some quirks you do not necessarily want, as an ambitious e-commerce business.
If you're interested in the common frustrations that drive brands to replatform, make sure to check out our blog: 15 signs it's time to move to SaaS.
2. When your current platform is too expensive
When aspiring replatformers hear of Shopify Plus fees for the first time (USD $2.000 a month or 0,25% of your online revenue, whichever is greater), they often frown a bit. Especially when they hear about its revenue-sharing principle.
At Code we get that the concept takes some getting used to, particularly when you’ve been using an open source platform so far - but we’re also convinced that this is a flexible, modern way of charging merchants for the use of an outstanding, hassle-free e-commerce
platform. By asking you to share revenue instead of charging a fixed sum, Shopify allows for your sales figures to fluctuate throughout the year.
But the most convincing argument for their pricing policy is the fact that, even with revenue sharing, Shopify is cheaper than most platforms - open source or not. Nothing will illustrate this better than calculating the Total Cost of Ownership (TCO) for your current platform - and then comparing it with the expected TCO of Shopify.
Total Cost of Ownership
What does your current platform cost, if you add it all up? To get a good estimate, you need to look a bit further than the price tag of your platform. Think Total Cost of Ownership instead, which includes all costs and expenses to do with buying, implementing, and managing a platform:
Total Cost of Ownership (TCO) = purchase price + operating costs + maintenance costs
To get the most insightful result, make sure you add up the cost for a period of three years - and then compare it with the expected TCO of any new platform you’re considering.
- Purchase price: includes the cost of setting up your platform, building your storefront, the design of your website, any connectors and integrations and custom features you need, licence fees (including those of third party plug-ins, apps and extensions), any revenue sharing, cost of hosting and servers and other hardware (POS hardware for instance).
- Operating costs: include the fees of developers for new features, cost of troubleshooting (you might even want to include missed revenue due to downtime, if you have estimates on that) and things like extended server capacity for peak traffic. Should ideally also include the cost of all the precious hours spent by you and everyone else in your company on platform-problem- solving, and the effect of technical delays in terms of missed revenue and wasted hours.
- Maintenance costs: include the cost of running updates, platform upgrades, server upgrades and maintenance, critical security patches.
If you’re using open source and/or self-hosted software, there will be a lot more items in your calculation than there would be if you were on Shopify. With Shopify you can eliminate any costs to do with servers, hosting, platform upgrades, security upgrades and crash management, for instance. What's more, you won't need to fly in specialized developers anymore - at least not for the day-to-day running of things. With Shopify, your team can do that by itself.
Want to know more about Total Cost of Ownership and how you calculate it? Code developed a model to help you do that: read all about it in this blog.
3. When you’re looking to scale your business - fast
The third main reason why brands come to us for a platform migration is because they are hungry for more. They have major growth ambitions and want to become market leaders. Yet their current platform can’t keep up, is not future-proof and too inflexible and expensive to expand to international markets quickly..
4. When you want to stay future-proof
The fourth and final reason we hear from clients is their suspicion that their current platform is not keeping up anymore. They need features on their site that aren’t available in their platform yet, and that are essential to further expand and future-proof their business. They worry that their platform will cease to be compatible with the updates of major third party solutions, in the near future. They have the impression that their platform isn’t innovating enough, and isn’t on top of the latest developments in the fast-changing world of e-commerce.
In short, they fear their platform is failing them in a subtle (but ultimately costly) way. Hence, they would rather make that investment now and move to a SaaS-based platform like Shopify, where they can be sure that an army of 4.000 (!) developers is continuously improving and releasing industry-leading technology for their platform, for years to come. With Shopify, they know their store will keep up with the latest in tech, as a matter of principle. At Code we believe that in the fast-paced e-commerce landscape, it's a competitive advantage to be on Shopify.
Are you considering migrating to Shopify?
You’re always welcome at Code to have a sparring session about your replatforming plans. Tell us what you have in mind, what your business is like, and what platform pains you currently have, and we’re happy to show you what we can do.
Fill out our contact form and we'll be in touch within 1 work day to get to know you and your business!
Want to learn more about migrating to Shopify? Download our migration e-book.