5 tips for choosing an e-commerce platform

What is an e-commerce platform?

An e-commerce platform is a digital solution that allows businesses to sell products or services online.

These online commerce platforms typically offer features that let you create and manage the front- and back-end of your store, such as:

• Product catalog management
• Customer service touchpoints, such as live chat
• Payment gateway integrations that process payments securely and conveniently
• Inventory management tools
• Order fulfillment systems

Types of e-commerce platforms

Hosted e-commerce platforms

Hosted e-commerce platforms, or software as a service (SaaS) platforms, provide an end-to-end e-commerce solution. Not only can they host your online store on their servers, but they also offer drag-and-drop templates, built-in features, and robust integrations so you can set up and manage your business with ease.

You’ve probably heard of a few: Shopify, BigCommerce, and Wix are all popular hosted e-commerce platforms.

While these providers make it straightforward to get started with e-commerce without requiring extensive technical knowledge, they offer limited design and functionality customization.

Self-hosted e-commerce platforms

Self-hosted e-commerce (also known as open-source) platforms, such as Magento, WooCommerce, and OpenCart, offer customizable solutions with open-source frameworks.

Although this option provides more control and flexibility than hosted e-commerce alternatives, keep in mind that you’ll need to host your site on your own servers, as well as take care of tasks that may require hiring a developer, such as security, technical updates, bug fixes, and maintenance.

Marketplaces

Marketplaces like Amazon, eBay, and Etsy enable businesses to start selling online by listing products or services directly on the platform.

While marketplaces offer the convenience of a built-in customer base and infrastructure for getting started, they often charge fees or commissions for every transaction.

Social media platforms

In recent years, social media platforms such as Facebook, Instagram, Pinterest, and even TikTok have introduced e-commerce features that allow businesses to sell directly on their apps.

Social media platforms may provide a wide reach and deliver users with a seamless shopping experience but expect to face fierce competition, murky algorithm changes, and limited control over branding.

How to choose an e-commerce platform

There are dozens of e-commerce platforms available to businesses — and knowing how to choose the right one for yours will be key to landing sales.

Industry and product specializations

Look for an e-commerce platform that fits your type of business. Some specialize in helping companies sell specific types of products, from handmade items to software to electronics. Others are tailored to businesses selling products vs. services or digital goods vs. physical goods.

For example, if you're selling e-books, you'll need an e-commerce platform that allows online shoppers to download materials from your site after submitting payment. If you're selling personalized jewelry, you'll need intuitive product page templates that show off your work and allow shoppers to customize products.

Pro tip: looking at your competitors' websites to see if there's an e-commerce platform they commonly use can help you identify specific options.

Preferred payment methods

Giving online shoppers payment choices at checkout can be a deciding factor in whether they go through with a purchase, so it's a good idea to make sure that your e-commerce platform is compatible with various payment options.

For example, some e-commerce platforms allow you to promote consumer financing options like installment payments. This can be especially important for converting sales of higher-priced items like auto parts or luxury apparel.

Compatibility

Payment processing won't be your only compatibility checkpoint. If you're looking to streamline several areas of your business — social media, email, SEO, inventory management, marketing, accounting, analytics, shipping — into a single location, you'll need to make sure that each solution provider plays nice with your e-commerce platform via an application, plug-in or API.

Don't make assumptions — look at solution providers' websites and contact sales reps with your compatibility questions.

Customization and control

Another important choice in picking an e-commerce platform is knowing how much customization and control you need.

With a hosted platform, a third party hosts a series of applications and makes them available to you on a subscription basis. Meanwhile, with a self-hosted platform, you build from scratch exactly what you need or want in an online store.

To determine which is best for you, start by answering the easy question: Do you have extensive coding experience or technical staff? If you do, take a look at self-hosted platforms. They give you control over the underlying code so you can customize your site to your heart's content.

If not, hosted platforms, marketplaces, or social media platforms may be the way to go. They provide design, hosting, storefront setup, payment processing, promotions capabilities, security features, and more, all in one solution. Best of all: You don't need to have any coding experience.

Scalability

If you're selling casually and intend to treat your store as a hobby, you may not need to worry about scalability. But if you want to make your e-commerce business a full-time gig one day, consider choosing a solution provider that can support your business's growth. Specifically, look into inventory capabilities (and pricing), plug-ins, and global expansion.

If you're selling several hundred SKUs, remember that some platforms are priced according to the number of product listings. High volumes of product listings can also slow down some platforms and lead e-commerce websites to return poor search results.

In addition, think about all the places you'd like to list your products. Many hosted and self-hosted solution providers specialize in scaling businesses to specific platforms, including social media, marketplaces, and mobile messaging apps. If your goal is to sell globally, consider an e-commerce platform that can help you optimize for different languages, currencies, and tax rates.

E-commerce platforms comparison: Features to look out for

When making your e-commerce platforms comparison, here are some features to consider:

• Security: Nobody wants to fall victim to e-commerce scams, so prioritize robust security measures such as SSL encryption, PCI compliance, and secure payment gateways to protect customer data and transactions.
• SEO: Ensure the e-commerce platform offers features for optimizing your website's visibility in search engine results, such as customizable meta tags, URL structure, and sitemaps.
• Hosting environment: Your chosen platform’s hosting environment should be reliable enough to load quickly and handle heavy traffic without crashing.
• Fees: Does the e-commerce platform take a cut of each transaction? How much is the monthly fee? What are all the add-on costs of app subscriptions? These answers can help you evaluate your profit margins for each e-commerce platform.
• Inventory management: Look for features that allow you to track stock levels, set up alerts for low stock, and handle variations or options for different products.
• Order management: Consider what support you need for order processing, tracking, and fulfillment, including the ability to generate invoices, print shipping labels, and manage returns or exchanges.
• Analytics and reporting: Built-in analytics and reporting tools can provide insight into sales performance, customer behavior, and conversion rates.

A solution that's right for your business

E-commerce platforms help businesses like yours get products to market quickly and cost-effectively.

In addition to the items above, keep in mind that prices and access to customer service vary widely across platforms depending on the components you piece together to create a streamlined e-commerce experience.

Once you're up and running, you'll be ready to reap the rewards of your investment, like less stress, higher sales, and happier customers.

Discover how PayPal for Business may integrate with your preferred ecommerce platform.