- Running an e-commerce site is much easier if you use an e-commerce platform or shopping cart software.
- E-commerce software is commonly hosted in the cloud, giving business owners anywhere, anytime access to a full suite of the tools they need to set up and run an online store.
- Shopping cart software makes the most sense for business owners with an existing website.
- This article is for people who want to start an e-commerce business or take their existing retail business online.
Operating an e-commerce shop is a great way to reach a broad customer base and generate sales, whether you're just starting out or have an existing retail business, and e-commerce software makes it easier to do that. These cloud-based software application can help you open your online shop, manage inventory, process payments and handle logistics. Deciding which e-commerce platforms is right for you comes down to the size of your business and your budget.
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What is ecommerce software?
E-commerce software is the backend of a business's online store. It empowers business owners to easily create a website to sell products, manage inventory, accept and process payments, and handle fulfillment. This software is often cloud-based and supports third-party apps, making it possible to integrate accounting, customer management and inventory software into the solution. The idea behind an e-commerce solution is to make it easy for anyone to start selling online, whether you have ten products or a hundred.
Key takeaway: E-commerce software is the engine of an online store, working behind the scenes to manage orders, inventory, payments and shipping logistics.
What does ecommerce software do?
E-commerce software is designed to handle all aspects of running an online shop from one dashboard. These e-commerce platforms have evolved over the years, offering business owners a lot of worthwhile features. Here's a look at five of them.
- Manage products: A big benefit of using e-commerce software is the ease in which you can add and remove products from your online store. The e-commerce software is designed to manage SKUs – including sizes, colors and quantities – updating available quantities automatically as orders come in and products are shipped out. There's also the ability to get a deep view of how products are selling and what inventory looks like for the year or a moment in time.
- Built-in order management: The quickest way to lose a customer is to take too long to get the product into their hands, which is why efficient order processing and shipping is essential. E-commerce software tracks and manages orders from when they're placed to when they land on the customer's front door.
- Handles the details for you: Whether you need to calculate taxes, print a shipping label, or track an order, e-commerce software is up to the task. The software is built to handle all aspects of running an online store, including notifying customers of the order's status.
- It speeds up checkout: Speed is of the essence when selling products online. If a customer has to go through a slow and clunky check-out process, they're more likely to abandon the sale. Most cloud-based e-commerce software have streamlined checkout forms that makes it as easy as possible for customers to complete their purchases.
- Build-in marketing and SEO tools: Many e-commerce software applications were developed with search engine optimization and social media in mind. Developers know the higher a business shows up in search, the better its sales will be. To help small business owners many e-commerce software have built-in SEO optimization and marketing tools, increasing the chances your product will show up higher in search.
Key takeaway: E-commerce software includes an online storefront, inventory and order management, speedier checkout, and access to marketing and SEO optimization.
Types of e-commerce software
When it comes to e-commerce software, there are many vendors but only two types of software: on-premises and software as a service or SaaS.
- On-premises: This is e-commerce software that is installed on your servers and managed on-site. Typically, you'll purchase a license for the software upfront and pay for annual updates, though some vendors offer updates and maintenance packages for an additional fee.
- SaaS: This is software that's hosted in the cloud instead of at the retailer's location. All updates, fixes and new releases are done automatically. Instead of buying a license for the software, you pay a subscription fee to use it. Most have month-to-month plans, but many offer a discount if you subscribe annually. SaaS is attractive to businesses because it tends to be cheaper upfront and less time consuming to set up and maintain.
Key takeaway: The two main types of e-commerce software are on-premise and SaaS. With on-premise software, you buy a license and install it at your place of business. SaaS is purchased as a subscription and it hosted in the cloud.
What's the difference between e-commerce software and shopping cart software?
First, to choose the best software for your business, you'll need to know what to look for. Among the e-commerce system options, vendors and users often refer to them as either e-commerce software or shopping cart software. Some also use the two terms interchangeably, adding to the confusion.
What's the difference? E-commerce software and shopping cart software are very similar. They both help you launch, run and manage an online store, as well as process payments and work together with the rest of your operations. But the key differences are in their specific functions.
If you need a full-featured, all-in-one e-commerce solution, choose e-commerce software. E-commerce software includes website hosting and design, storefront setup, payment processing, merchant tools, marketing, security, and everything else you need to build and grow your e-commerce store. You can either build your website using the e-commerce software or integrate it with an existing website or blog.
An attractive interface and delightful user experience are key to converting visitors to customers, according to MK Getler of HubSpot, so whatever option you pick, it should be flexible enough to not get in the way of the aesthetics of your online shop.
Shopping cart software, on the other hand, is best if you already have a website and simply need to set up a way to list products and services and process payments. Unlike e-commerce software, shopping cart software often comes in the form of website plugins or extensions and is often limited to helping you set up a virtual storefront, processing payments, and providing some merchant tools. Some customizations may also be possible, depending on the website and software.
As mentioned above, the terms e-commerce software and shopping cart software may be used synonymously. Make sure to do your research and ask your vendor for specifics.
Key takeaway: E-commerce software is for business owners who want a full suite of online shopping tools and services. Shopping cart software is best for those who already have an existing website.
Do you need e-commerce software?
Small businesses have many options when it comes to electronic commerce. One way is to sign up with marketplaces that allow you to list your products in a hosted storefront, such as eBay, Amazon, and Etsy. But if you want more control over your e-commerce business, setting up your own website with e-commerce or shopping cart software is the way to go.
If any of the following apply to you, investing in e-commerce or shopping cart software is the best choice for your online business.
- You want your own website. When you use an e-commerce marketplace to sell your products and services, your storefront resides on that company's website with its branding. With e-commerce software, you get your own website and domain name to give your online store its own home and make your e-commerce business completely yours.
- You want control over your online store. Offering a wide variety of features and customization options, e-commerce software gives you plenty of control over your online store. You can design your website however you want, designate your own workflows, choose your own pricing models, and more, so you can set up your store in any way that fits your business's changing needs.
- You want a simple, easy-to-use solution. Not a programmer? Not a problem. Most e-commerce software can get you up and running in no time, without the need to code or manually install anything. Although some customizations and additional functions may require some tech skills, if you're just getting started, most solutions can be set up in just a few steps and take almost no work to maintain. Many also offer website templates and DIY website-building tools, so you can drag and drop your way to launching an online store.
- You want help with marketing. Besides merchant tools to help you sell online and process payments, e-commerce software typically includes marketing tools to help you get the word out about your store. These include social media marketing and social sharing capabilities that let customers share product pages and their purchases with their followers, promotions and special discounts, and loyalty programs.
- You want to keep all your profits. Online marketplaces make their money by taking a cut of every sale on top of credit card processing fees, with some also charging monthly fees. With e-commerce or shopping cart software, you keep all your profits and only pay the provider's subscription and payment processing fees.
- You want to simplify your operations. One of the biggest benefits of using e-commerce software as a small business is that it can integrate with other business solutions you already use. This makes it easy to streamline your operations, and you'll always have access to the latest data in real-time. Read more about third-party integrations below.
- You are a developer. Plenty of e-commerce solutions are open source, meaning their codes are available for anyone to alter. This gives you full control over the platform so you or your developer can modify the platform for just about any need or function.
Key takeaway: E-Commerce and shopping cart software makes more sense than online marketplaces if you want your own e-commerce website, prefer to have control over sales and don't want to pay a cut of each sale to a marketplace.
E-commerce software features
E-commerce software products offer a wide range of features to help you sell online and manage your online store. When we spoke with small business owners, the two most important features they said they look for in e-commerce or shopping cart software are ease of use and customization capabilities.
It also helps that the software automates processes and maintains itself.
"A perfect shopping cart platform is one that is customizable, and once it is set up you can forget about it," added James Fayal, founder of Zest Tea, an online specialty tea store.
Here's what else e-commerce software offers and how it can help you launch and run your online business:
- Everything you need to build a website. With web hosting, domain names, storage, and bandwidth, e-commerce software is an all-in-one solution to start your online business - without any tech skills. Many also offer additional functions, such as built-in blogs, content management systems, web design, and even DIY website-building capabilities.
- Online storefront. Showcase your products and services with your virtual storefront. E-commerce software products make it easy to set up your storefront, as well as add and edit inventory, product descriptions, pricing, and more.
- Payment processing. No need to implement third-party credit card processors on your own. E-commerce and shopping cart software automatically include payment gateways, such as Stripe and PayPal, and link them to your bank account, so you can get paid fast.
- Merchant tools. Find and retain customers with marketing tools, abandoned-cart reminders, social sharing capabilities, and the ability to offer daily deals, gift certificates, loyalty programs, and special discounts.
- Drop-shipping options. Don't have your own inventory? Some e-commerce software enables you to sell wholesale and retail products from different brands and manufacturers.
- Third-party integration. Make your life easier by connecting your e-commerce software with apps you already use – point-of-sale systems, customer relationship management, accounting software, and email marketing – to streamline your data.
- Mobile commerce. Provide customers with mobile-friendly versions of your online store so they can shop anytime, anywhere using their smartphone or tablet. This also enables you to accept mobile payments, such as in-app purchases and mobile credit card processing.
- Customer support. Be there for your customers with phone, email, live chat, community forums, and other customer service solutions.
- Security. Protect your business's and your customers' information with SSL encryption, compliance, and fraud protection tools.
Key takeaway: E-commerce software gives you everything you need to get your online business up and running. The leading e-commerce software comes with a ton of features including an online storefront, payment processing, third-party integration, mobile commerce support, and security.
How much does e-commerce software cost?
Because there are so many types of e-commerce and shopping cart software, costs vary greatly. For full-featured e-commerce software, expect to pay anywhere from $10 to $200 per month. Multiple factors determine the costs, such as the features your business needs, storage capacities, domain names, customization capabilities and credit card processing fees.
Shopping cart plugins and extensions, on the other hand, are typically free and offer many add-ons at no charge. However, some plugins and extensions charge for additional functions and services, which also vary depending on the software provider and platform.
Key takeaway: E-commerce software costs vary, depending on what features you need. Expect to pay anywhere from $10 to $200 a month.
Benefits of using a shopping cart software
In addition to letting you set up and maintain an online store, e-commerce and shopping cart software offer many benefits that make running an online business easier, so you can focus on other aspects of your business, such as sales, marketing and customer service.
Here's what the e-commerce business owners we talked to said they love most about their e-commerce and shopping cart software.
- Save money. Nima Noori, CEO and founder of online vapor store Toronto Vaporizer, said the software his company uses is very cost-effective, as it offers all the extensions and plugins you can imagine, and you can easily implement them without hiring developers to build and set them up for you.
- Support. Brandon Ackroyd, head of customer insight at mobile deals website TigerMobiles.com, appreciates that the company's shopping cart software lets users solve problems quickly. It is well supported by the vendor's team and comes with a community of users who are eager to help, he said.
- Boost sales. Lisa Cash Hanson, CEO of interactive baby pillow company Snugwugg, said her company's online store has made thousands in potentially lost sales, thanks to its e-commerce software's abandoned-cart emails, which automatically remind customers to go through with the checkout process. This takes zero effort on the company's part and creates a big return, she said.
- Accept multiple currencies. Heidi Hecht, owner of the Nothing in Particular Blog, where she also sells writing services, loves that the company's shopping cart software lowers its payment processing fees while giving customers more payment options by accepting multiple currencies, including such cryptocurrencies as Bitcoin and Litecoin.
Key takeaway: Shopping cart and e-commerce software have a lot of benefits. The big ones, according to the business owners, include saving money, boosting sales and the ability to accept multiple currencies.
Choosing the right shopping cart software
Ready to invest in e-commerce software? To find the best option for your business, here's what the small business owners we spoke with said you need to ask potential vendors:
- How easy is it to set up and use?
- Is it designed for small businesses?
- Is it customizable to fit my business needs?
- Does it automate workflows to make my life easier while delivering a good customer experience?
- Can it help me boost profits with marketing tools, abandoned-cart reminders, and other features?
- Does it require a lot of maintenance, or can I forget about it once it's set up?
- Are there any service limits? For instance, is there a limit to the number of products I can sell or the transactions I can handle every month?
- Does the software work with third-party business solutions I plan to or already use?
- If I have a physical store, can I integrate the software with my store's data, operations, and resources?
- How is my data backed up? Can I access and restore my data immediately when there is an outage?
- What security measures do you have in place to protect my customers' information?
- What is the total cost of using this solution? Are there any setup, maintenance, or additional fees?
- What types of tech support and customer service do you provide: phone, email, live chat, knowledge base, FAQ section, support forums? Can I reach you anytime?
Key takeaway: When shopping for e-commerce and shopping cart software key considerations include how easy it is to set up, the third-party integrations it offers, how much can be automated, the total cost and how it will support your growth.
Additional reporting by Donna Fuscaldo.