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Hosted vs. Licensed Shopping Carts

Shopping cart software is the backbone of an internet ecommerce business.  It allows a business to easily handle orders with a great deal of detail and ease along with a quality content management system.  The two big issues that make it hard to choose which shopping cart to use is if it is Licensed or Hosted and which company you get the shopping cart from.  We want to provide a little more insight and tips between Licensed and Hosting Shopping carts for your ecommerce business.

Hosted Shopping Carts – This solution is usually provided by companies that have created a shopping cart software package for their customers and host is on their own servers.  This means that you do not need a hosting package, usually just a domain name.  Your business signs up with the company and then they give you access to their hosted shopping cart.  Some of them will actually provide you the ability to register for a domain when signing up for their service.

The hosted solution is a great way for a new company to start their ecommerce website online.  There is really nothing that you have to do in order to get it setup besides adding your products and your policy pages.  It is a real simple solution.  Most hosted solutions are pay-per-month or once a year payment for the solution.  Many companies have different packages which allow you to choose depending on how many products you have and what features you would like to use.  This enables you to choose the best package for your budget and for your goals.

The main downfall of a hosted shopping cart platform is that you do not have control over what features are offered.  The software has already been created by the company and they just allow you to use it on their servers.  This can make it hard to add other services that you may find useful in the future, such as a different analytics package or other third-party services.  Hosted solutions usually do not allow their customers to edit the source code, so whatever features are present when you purchase are the ones that you get.  If you would like a feature added, you usually have to contact the company and ask and then they see if it will be used by their other customers and maybe add it in.  This can take a while and it is not always guaranteed.

Another issue can be that there are some solutions that not only provide you with the shopping cart software, but also the merchant account/credit card processing as part of the package.  This can be great for some companies because they do not have to get a merchant account.  The main drawback of this is that they usually charge you a processing fee, plus a transaction fee.   This typically is larger than the amount that most companies can get from their own merchant account.

Licensed Shopping Carts – A licensed solution is similar to a hosted solution, but you have the ability to host it on your own servers.  This gives you the control over server configurations, uptime, and many other factors.  Many solution providers give you the ability to download the software and then upload it to your server.  They also give you the access to edit the source code.  Some give you 100% and some give you 99% with some restrictions to copyrights.  This still gives you the ability to add really anything that you may need to improve your performance and features that will fit your goals.  Providers usually charge a large fee for the license, but it is a one time fee, so you do not need to pay again.  Some other providers ask for a smaller fee, but require a yearly subscription fee.  A licensed solution is the best for someone that has the ability to edit source code without messing up the shopping cart and how it works.

Purchasing a licensed shopping cart solution usually is a great way to keep your website updated with the best third-party applications and proper code updates.  When you purchase a licensed shopping cart, you are responsible with keeping it updated and secure.  If web standards change, then you or your webmaster are responsible for updated the source code.  If you have someone that is able to easily update code, then the licensed solution might be great for your company.

A few drawbacks  to the licensed solution is that you need to know how to edit code with sacrificing performance or have someone that can do it.  You will also need to provide your own merchant account or other payment gateway service.  You will also be responsible for any security flaws that the provider might not have taken care of and any other code issues that were put in.  Also, there are some providers out there that do not really understand clean code and reducing server loads, so in order to increase performance, you will need to responsible for editing the code and updating it.  This can be very time consuming, but it can pay off in the end.

Whether you are thinking about a hosted or licensed solution, you need to think about the larger picture.  Where do you see your company going in a few years?  How many times do you want to upgrade your shopping cart as your business increases.  How many features do you want to add to your shopping cart?  These are just a few questions that you need to ask in order to get the right solution for your company and your ecommerce website.  The hosted solution may be good for some and bad for others, but every company needs to start somewhere.  Take the time to ask the provider if you can upgrade from a hosted to a licensed solution if they have the option, or make sure you know what it will take to change from a hosted to a licensed solution.  Growing pains can hurt, but if you choose the right solution upfront, then you could be better off in the end.

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