B2C Ecommerce Development: SaaS vs In-house Development

Global e-commerce still remains to be an ocean of opportunities. BY 2021, global e-retailers would go beyond $4 trillion. To put it in context – that is bigger than the German economy. So, if you are planning to set up a business online, make sure there is an e-commerce component in it.

It has become easier to set up an e-commerce website. You don't have to be a programmer or even a technologist. As far as you have products and an audience, you can get your e-commerce business started in no time. The real challenge comes in the form of deciding – how do you get the website developed?

Primarily, you have two options for e-commerce development – Software-as-a-Service and in-house Development model. The in-house development model has been around for a while. A lot of technological development on the enterprise-scale was earlier done with in-house models. SaaS ecommerce platforms, which give the plug & play model to businesses of all scales and sizes has made it simplified for any business to go online.

SaaS model allows you to get all the features you want from your e-commerce platform via a cloud delivery model. In short, your entire website is on the cloud and all you have to do us log in to make any changes. With In-house or on-premise development, you are bringing people to develop the website in the house. So, you will have to own the infrastructure to run and maintain the website.
You can easily find guides that tell you more about SaaS vs. In-house eCommerce Development. What you should really look for is a thorough analysis of what can be the right type of development for your business. And that is what you will find here.

Here is how you can think about SaaS vs. In-house or On-Premise Development, especially if you are in the B2C e-commerce space:

1. Cost Structure: Think About All the Costs; Not Just the Initial Price-tag:

Think about a typical e-commerce business – what would be the costs you will have to undertake to keep it running successfully? Once you have installed the infrastructure, your biggest overhead would be in customer acquisition. The reason is that you will have to keep the traffic growing on your website in order to retain and grow sales.

So, you have to think about cost-structures very carefully. Here is how SaaS and In-house development differ in this area:

● In-house Development has Incremental Cost Structures: Going in-house development will mean that you are hiring someone to develop the website at your premises. If you already have an established office and a sophisticated IT infrastructure, this might work for you. But even then, once the website has been developed, you will have to maintain it in-house. This means that you will have to hire people, upgrade the infrastructure when necessary, and keep the tech stack running.

All these costs generally go up with e-commerce businesses. Initially, this will not be a major overhead, but in just some time, you will have to spend more money on IT infrastructure than you spend on customer acquisition.

● SaaS Costs Don't Skyrocket, Even When You Are Growing: SaaS offerings are considered to be relatively expensive at the beginning. But, there are no development costs. There are upgrades and add-ons, or capacity increasing costs. These are costs and expenses that you can easily maintain. The biggest advantage of the SaaS model is – once your subscription cost is taken care of, there is no more additional IT expenditure necessary to maintain the website. Even in the future, as you add more products and customers, you can simply upgrade to a larger plan with more features.

If you put together the long term costs of owning the infrastructure, hiring IT staff, and maintaining contracts, the initial relatively higher costs of SaaS platforms are much lower than their in-house development counterparts.

2. What Do You Prefer: Specific Features or Speed?

This has less to do with the speed of your website, and more to do with the features you want in it. When you are starting out, you have a ton of ideas about your e-commerce platform. Hence, you would want to know what portfolio of features can you get from each of the development models.

● In-House Development Gives You the Sense of Customization: By design, this development model should offer you all the features you seek. In reality, most first-time e-commerce business operators and owners don't have a detailed idea of all the features they want. Sure – you need payment integration, product catalogs, and profile features. But how do you plan to design the recommendation engine of products? There are several such features that you will test, deploy, and modify.

In reality, In-house ecommerce development can give you 'customized' features. But the number of features e-commerce website needs of successful operations is limited. So, despite paying a premium for the 'custom' features, you are selecting them from a catalog. To add to that, you will have to take responsibility for their success with the consumers because you chose them.

● SaaS Gives You Market-Tested Features: SaaS ecommerce platforms offer baskets of features to entrepreneurs worldwide. Hence, they have to stay on top of the technology stack all around the year. This is the reason why they are always on the hunt for new features, but they always beta-test them thoroughly before adding them to their platform. So, someone else pays for the R&D, and you get to choose whether you want a tested-feature or not.

In-house ecommerce Development can give you a misguided sense that you are getting customized features, whereas you are just choosing them from a prefabricated list. Unlike a car, the number of e-commerce website features are limited. SaaS helps you get rid of this dilemma by offering you current industry-standard features. But what SaaS really offers you is agility. You can select, deploy, and upgrade features on the go, without having to worry whether they will function as expected.

3. Do You Have a Plan to Abide by Data Security and Privacy Norms?

One key area that e-commerce entrepreneurs, especially in the B2C space, often miss having a plan on is Data Security. When you are starting out and have less than 10,000 orders per month, this will not be an operational hiccup. You can still hire a Security Consultant and get it sorted. But once you cross that benchmark, you will need a continual strategy to secure user data.
Here is how In-house eCommerce development and SaaS perform on this metric:

● In-house development Will Shift the Security Risks on You: In-house or on-premise development gives all the controls in your hand. While that may sound good, you might not have the technical knowledge necessary to take care of everything. Hence, you will have to hire contractors or full-time employees to keep your website's data secure in the long run. As your business grows, this overhead will only go up.

● SaaS Businesses Have a Global Standards of Security: Most SaaS platforms have a global clientele. This is the reason why they have to keep their platform as secure as possible. While you are thinking about the security of your platform, they have to plan for millions of users across thousands of websites. Hence, their security standards tend to be much higher than those of in-house developers. At the same time, SaaS platforms can afford to hire full-time employees to develop security features and integrate them into the platform. So, your security setup goes from being a problem of development and maintenance to being a checkbox in your selection of features.

In Conclusion:

There is a misconception that SaaS ecommerce platforms are initially great, and in-house development is good in the long run. In reality, SaaS ecommerce platforms such as [Quick eSelling] (https://www.quickeselling.com/) helps you control your costs, mitigate your risks, and gives you the speed & agility to produce a superior platform. With SaaS, you can focus on what you are really good at and still have a great e-commerce platform.

What do you prefer to use for your ecommerce business: SaaS or In-house Development? Please share in comments.