How Modern eCommerce Strategies Keep Total Cost of Ownership Low

July 30, 2018

Category: Best Practices

When considering a new platform for eCommerce, it’s important to understand the Total Cost of Ownership (TCO). The TCO includes much more than just the cost to build your eCommerce application. It includes everything from hosting, to implementation and support, to integrations, as well as future developments and upgrades.

In the past, a full stack platform was your only option, and sometimes it was necessary to change your internal business processes to fit the platform. Luckily, a modern approach to eCommerce with APIs and microservices at the core allows you to keep your TCO much lower than you used to with a traditional full stack eCommerce platform.

Here are 4 ways a modern approach to eCommerce helps keep your total cost of ownership low:

  • Infrastructure: With traditional eCommerce options, you needed to buy a service and pay for a hosting provider which became some of the major ongoing costs of maintaining a digital experience. Often times it requires a team of internal personnel to monitor and upkeep those servers, adding to the costs. But with a modern approach to eCommerce, these costs are eliminated as everything is hosted in the cloud.
  • Licensing and Subscriptions: You used to need to buy the entire database and pay for a license to traditional eCommerce software. With a modern approach to eCommerce, you generally subscribe to the platform based on your own usage, which allows you to ramp up or ramp down your costs based on the direction business is going.
  • Implementation & Customizations: With traditional software, implementation time for a unique application to match your business’ needs is usually high which, in turn, makes your costs high as well. That’s because the software is not set-up for speed and customizations. Many aspects of a modern approach to eCommerce keeps your implementation and customization costs lower. An API-first platform is designed to make it easy to configure your experience based on pre-built components. It also makes integrations with existing business technologies much quicker and less cumbersome. Headless eCommerce gives you free-reign to design an entirely unique front-end experience because the back-end is completely decoupled, eliminating any risk of disrupting core functionality. These characteristics make your implementation and customization costs much lower.
  • Future Developments and Upgrades: With traditional, full-stack eCommerce software, anytime an upgrade is added to the software, the customer needs to pay to take advantage of the new functionalities. And depending on how custom and built out your application is, often times you aren’t able to take advantage of the upgrades because it would be too disruptive, which can add to your maintenance costs as you deal with an outdated system. With a modern approach to eCommerce, you’re able to take advantage of any upgrades automatically and without the added cost. As you grow, and want to add new features or scale the experience, you’re able to do so without disrupting the core functionality.

When taking a modern approach to eCommerce and considering replatforming, be sure to understand the total cost of ownership in detail.