Diving Deep Into the Key Components that Affect the Cost of Ownership in eCommerce
Now that you have a broad view of the total cost of ownership, let’s dive into the key components. Understanding your options when it comes to components is key to controlling your ownership costs for eCommerce. A SaaS solution like BigCommerce or Shopify may not cost much in development, but you also won’t get much flexibility, and you’ll likely pay higher transaction and license fees. That’s why it is important to consider all components and look out over 3 to 5 years. Here are the key components to include in your TCO calculation at a very minimum.
Cost to acquire the software
Depending on the approach you take to eCommerce, your acquisition costs may be minimal or substantial. For example, many proprietary software packages will charge a substantial initial license fee while others charge a minimal amount for the first few months and then increase the license fee. The size of your company also impacts software acquisition costs. The larger and more complex the company, the higher the first year’s costs.
Open-source software may be available for free, but the free version may offer limited functionality. You may need to pay a license fee to gain access to full functionality.
Other acquisition costs
If you are entering the world of eCommerce for the first time, there will be costs associated with locking down your domain. If the domain you want isn’t available, you may pay a premium to acquire it.
What about hardware? If you host your website in-house, do you have the necessary hardware, backup, security, and disaster recovery ready, or will you need to make additional investments? What about the people to support the technology? Are they already in place?
Development costs
Development costs are all the costs associated with getting the software out of the box (so to speak) and getting it out on the internet in a usable format for customers and employees. You may have developers on staff that can do this work, or you may need to work with outsourced developers. Development includes how the eCommerce store will operate as well as how it looks.
Not all websites use the same architecture. The architecture approach you take (monolith, modular, composable, headless, etc) will have an impact on your development costs. To control development costs, pick a platform that supports multiple approaches to architecture.
