Practical Ecommerce

B2B Ecommerce: Pros and Cons of SaaS Platforms

Software-as-a-service ecommerce platforms are gaining market share. They have clear benefits, but they also have limitations, especially for B2B companies. SaaS platforms — hosted carts — charge a monthly fee to use the software, which is in the cloud. There are dozens, if not hundreds, of choices, such as Shopify, BigCommerce, and Volusion.

Here are my pros and cons of SaaS platforms for B2B companies.

Pros of SaaS Platforms

Fast implementation time. Merchants can get a site up and running on these platforms with minimal effort. The platforms often offer pre-built layouts and themes that are mobile responsive. Depending on your needs, and your comfort with ecommerce, you may not need a developer at all.

Less expensive. Many SaaS platforms charge as little as $100 per month, or less. Add-ons can increase this monthly fee. While those costs can increase over time, overall there is a low cost of entry. Many other ecommerce services, such as email service providers and live chat vendors, can integrate with SaaS platforms, which lowers development costs.

Hosting is included. In the standard licensed ecommerce model, you buy the software license and find servers to host the site on. But with SaaS carts, the hosting is provided as a part of your monthly fee. You don’t need to manage that relationship or mess with getting it set up.

Security is managed by the provider. Every company that takes credit card orders must be PCI compliant. A SaaS platform will take care of the software and hosting aspects of PCI compliance. That doesn’t mean that merchants on SaaS platforms have no work to do when it comes to PCI compliance. They still need to ensure that their business processes and organizational security meet PCI compliance standards. But SaaS platforms simplify and minimize PCI compliance.

New features included automatically. As new features are released on the SaaS platform, merchants can easily use them. You don’t need to hire a developer to upgrade your code and test it before pushing it live. The features are simply available to you, saving time and money.

Easily accessible developer community. Because SaaS carts often have many merchant customers, it is easy to find developers who work with the software. Many SaaS carts provide web portals to quickly find a developer. These portals sometimes include ratings of the developers from other merchants.

Cons of SaaS Platforms

Lack of support for custom business rules. Most companies that sell to other businesses have specialized procedures that don’t fit the simple shopping cart model.

Examples of custom business rules that typically lack support in SaaS carts are:

  • Products that don’t ship to certain states;
  • Complex pricing;
  • Customers can bill shipping to their UPS or FedEx account.

Missing common B2B features. An ecommerce platform for B2B companies usually addresses the entire customer experience, not just online orders. Most SaaS platforms lack specialized B2B tools, like:

  • Find a sales representative or a dealer;
  • Quick-order functionality;
  • Ability for customers to log in, review, and pay for orders that were placed offline;
  • Multiple users logging in from customer’s company and, sometimes, seeing each other’s orders;
  • Ability for sales reps to log in and place orders for their customers.

Data design. B2B merchants often underestimate data design, which can cause problems down the road. When working with SaaS carts, merchants are limited in the custom data tables and fields they can create. This can limit their ability to implement key features, such as:

  • Product attributes and reductive navigation;
  • Configurable products;
  • Pricing based on custom business rules.

Add-ons impact performance and usability. Third-party add-ons to SaaS stores can hurt usability. The layout may not be consistent in the user interface. Using multiple add-ons can slow a SaaS site.

Cannot customize checkout. Merchants on SaaS platforms typically cannot customize the checkout process, among other aspects of the shopping experience. In business, strategic growth often involves focusing on your uniqueness. SaaS carts can limit your ability to be unique.

Content management. SaaS carts are generally built for shopping and not much else. Some of the carts offer a blog functionality. Beyond that, SaaS carts don’t typically offer content management features that are important for B2B businesses, such as managing a library of PDFs and resources, managing a video library, and allowing customers to log in and see different content depending on their past purchases.

You don’t own it. SaaS merchants must pay a monthly fee, or their site is gone. They cannot download the code it and use it elsewhere. A SaaS platform can go out of business and otherwise change its licensing requirements or features in a way a merchant doesn’t like. Companies with a need to own their code and mitigate risk may choose to look elsewhere.

Another Class of SaaS Carts

There is a higher tier of SaaS platforms —such as Shopify Plus, Mozu, and Demandware — that have a different value proposition. They are not inexpensive — the costs range from $24,000 to $750,000 per year — and are typically paired with time and cost intensive implementation projects. These platforms solve some of the challenges that exist for their lower-priced SaaS counterparts. But the total cost of ownership is on par with or higher than licensed solutions, in my experience.

For the same price (or less), merchants can use licensed software that has deeper content management features. Pairing a licensed cart with a managed cloud hosting solution provides similar benefits of a higher-tier SaaS cart.

Which to Choose?

SaaS platforms can work for B2B merchants with relatively simple sales models. But, if merchants have many SKUs and extensive product documentation, or a more complex sales process or pricing structure, SaaS platforms are not usually appropriate.

Lori McDonald

Lori McDonald

Bio   •   RSS Feed


email-news-env

Sign up for our email newsletter

Comment ( 1 )

  1. Marek December 20, 2016 Reply

    I work for IdoSell, a SaaS platform for B2B and B2C merchants. I disagree with some of your points.

    Lack of support for custom business rules.
    Products that don’t ship to certain states; (this depends on shop owner and shipping companies used for shipping) please take a look at http://www.idosell.com/uk/shop/developers/formats/isf/ or integrated couriers companies http://www.idosell.com/uk/shop/integrations/shipping/

    Complex pricing.
    What do you mean by that? Idosell Shop let you set different price for B2C, B2B, marketplaces (eBay, Allegro), Amazon, price comparison services. All discounts shall apply automatically as soon as customer fits to profile.

    Within a few clicks, you can share an individual offer with respect to all discounts etc. set within a shop.

    Customers can bill shipping to their UPS or FedEx account- additional shipping information can be added to the order. This can be managed by a shop owner.

    Product attributes and reductive navigation- with Idosell Shop there is no limitation on that
    Configurable products;- with Idosell Shop you can deliver such functionality- please take a look at http://www.idosell.com/uk/shop/design/functions/versions/configure-furniture/
    Pricing based on custom business rules- no problem with it, just need to know pricing algorithms.

    Add-ons impact performance and usability. Third-party add-ons to SaaS stores can hurt usability. The layout may not be consistent in the user interface. Using multiple add-ons can slow a SaaS site.
    This is common for any solution, Saas or bespoke. Idosell Shop let shop owners install any add-ons on their own risk.
    Cannot customize checkout.- we do offer two COPs- regular and OnePageShop:http://www.idosell.com/uk/shop/design/standard/onepageshop/

    Content management- we do offer much of freedom within this area.
    There is a higher tier of SaaS platforms- $24,000 to $750,000 – Idosell Shop starts from GBP49.99/month including- all admin panel features, unlimited technical support, Idosell Shop platform.
    Missing B2B features- please point out scenario which is not covered
    B2B features http://www.idosell.com/uk/shop/b2b/- drop-shipping, cross-docking…

    I agree, you will never own a solution but do you really need one?

    with Kind Regards
    Marek