The success of an online store starts with choosing an e-commerce platform that meets your specific business needs and website building ability. Many new online stores are considered small businesses with fixed budgets and resources, thus it’s essential to consider the benefits and drawbacks of each service. Magento and Shopify are two of the leading e-commerce platforms, and while they are both very popular, they have some fundamental differences in the way they perform.
Magento is a very powerful, feature-rich platform used by 14% of the top million sites in the world,easily making it the most popular service amongst e-commerce websites. Industry bigwigs such as Nike, Coca-Cola, BevMo and Ghiradelli all use Magento. These companies have a lot of resources, including expert web designers and dedicated website managers — both of which can be necessary for maintaining a successful site with Magento.
Unlike Shopify, it uses open source software, meaning you can use code to customize almost anything to meet your specific store needs. There are two main versions: Magento Community (Free) and Magento Enterprise (More than $22,000 per year). We’ll be focusing on Community which is marketed towards small to medium sized businesses.
- Product features – Better discounting and more promotional features within the cart —coupons, surveys, newsletters, etc.
- Business Intelligence – Out-of-the-box it provides you with in-depth analytics and reports about the performance of your business. You can customize reports, improve customer retention, and view well organized data from Magento and Google Analytics.
- Design customization – Open source allows you to customize pretty much anything on your website including fonts, styles, element organization and multimedia arrangements.
- Third party hosting – This can be a pro or a con depending on your needs. Hosting with a third party means you have more control over the behavior of your website — you have access to an array of add-ons from the Magento app store. For some, third party hosting is a con because it creates an additional annual cost.
- Built in add-ons— You have immediate access to several plugins for marketing, SEO, shipping, and finances right out-of-the-box, so you don’t have to spend more on add-ons and extensions.
- One-page checkouts – Quickly becoming a standard for online stores. Studies show that offering one-page checkouts leads to more sales and less abandoned carts. Fortunately, they come standard with Magento.
- Expensive templates – Some free templates are available, but they’re very basic and lack a modern luster, which is essential for online businesses these days.
- Requires coding knowledge – It’s certainly possible to dive into developer forums and self-learn some coding techniques, but it’s very time consuming. There’s a big learning curve for novice coders, and the time you spend teaching yourself could be time you spend growing your business.
- No SSL certificate – A secure server license is necessary for e-commerce websites to operate. Unlike Shopify who provides an SSL with their service, Magento does not, taking another dent out of your budget.
- No tech support – Because it’s free and open source, they don’t offer tech support. If you need to update or alter something you may have to research web-development techniques or hire a third party developer to assist you.
Shopify’s biggest draw is their user friendly interface that can have your store up in running in a jiffy. Even merchants with no tech experience can easily create a beautiful and intuitive web store. Their basic themes and pricing plans come well equipped and usually meet the needs of most small businesses.
However, if you’re looking for more premium features, you’re going to have to spring for a higher price plan and additional monthly plugins — before signing up for Shopify it’s recommended you determine which features you can’t live without.
- SEO – Plenty of built in SEO tools to help put your website on the map — meta tags, meta descriptions, title tags, and automatically generated sitemap.xml. They’re hosted on a huge infrastructure which helps with very fast page load times.
- Social Media integration – Connect information across all social media channels, including the ability to sell your products on Facebook.
- Templates – Beautiful yet simple designs. They offer some great free templates, but the nicer more complex ones will cost you a one time fee. They recently introduced a drag-and-drop feature called, “Sections,” which makes editing your website very user friendly.
- Ease of use – Without question Shopify is the easier solution for novice users and even folks with zero website building knowledge. From a consumer stand point it all feels very familiar and intuitive to use, making shopping a very enjoyable experience.
- Payments – Shopify is compatible with over 70 different payment processors such as PayPal, Quickbooks and Amazon Pay. If you use Shopify’s own payment gateway called Shopify Payments, they will actually waive all transaction fees for you. The downside of Shopify Payments is that it’s only available in the U.S.
- Tech Support – If you need help with building or updating your site, helpful and friendly tech support is available 24/7 via phone, live chat, or email. However, it’s so easy to use, you may never have to contact them.
- Checkouts – Checkouts come standard with a nice amount of features — multiple languages, automatic shipping calculations, abandoned cart recovery and tax calculations.
- Extra feature costs – Certain features come standard with Magento such as one-click checkout, marketing tools, and promos. But with Shopify they’re offered as plugins which can really add up at the end of the month.
- Less customization – You are limited to Shopify themes and styles. Open source coding is not an option. They do have their own template language called “Liquid” which can assist you with some customization.
- Weak blog dynamics – It doesn’t provide the best options for creating a dynamic blog with useful tags and intuitive display.
- Less analytics – Shopify analytics are not as extensive because of less back-end control. They do offer some decent analytics, but if your company is high volume and growing rapidly, you’ll want a platform that offers the most comprehensive data reports.
Pricing Comparison: Shopify Vs. Magento
100% completely free. It may sound too good to be true. That’s because while Magento’s software may be free, it doesn’t provide everything an e-commerce site needs to get rolling. Merchants still need to pay for domain names, web hosting, an SSL certificate, payment processing and any premium plugins they want to add.
Keep in mind, if you don’t know how to code, you’ll also need to budget for a web developer. It’s tough to break down an exact pricing structure because of how drastically different the needs of each company are and what your annual costs will be. But if you factor in all of the previously mentioned requirements, you’re looking at between $3000 – $20,000 for a basic site, and $20,000 – $50,000 and up for a premium website.
Pricing is month-to-month, and there’s no lengthy contracts. Although, you can save money by purchasing months in advance. Merchants have complained about high fees. Here’s a breakdown of the most basic plan:
- Credit card rate: 2.9% + 30 cents
- Transaction Fee: 2.0% (Fee is waived if using Shopify payments)
The higher priced plans include a $79/month and a $299/month version which offer gradually less transaction fees and more features (gift cards, reports, abandoned cart recovery, multiple staff accounts, etc.). They also give you a 14-day trial to test it out before you sign up.
Using open source software poses some an initial obstacles. Magento even recommends that their software is not user friendly for smaller businesses and novice developers. If you have the ability to jump this hurdle, Magento is a really sophisticated and powerful platform that will provide your customers with a top notch experience.
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Boasting one of the most impressive feature lists on the market, it’s easy to see why it’s favored by high volume web retailers who want the most premium site possible. Open source software also means a high level of back-end control. This allows companies to gather extensive analytics, helping merchants grow their business with a data-first mentality. All of this comes with a heavy price tag, but if you have the budget and resources Magento is definitely a smart choice.
Built with the average online merchant in mind, Shopify provides small to medium businesses with an incredibly easy to use e-commerce website builder. You don’t have to worry about hiring an expensive web developer and coder to maintain your site. Drag-and-drop options make creating and editing layouts a breeze. Their themes are elegant, modern, and user friendly — ensuring a pleasant shopping experience for your customers.
No open source means more security. They offer the gold standard in security — you never have to worry about having your information/data stolen because you haven’t updated one of your plugins. Plus, if you have any questions about your online store, Shopify has got your back with 24/7 support. Unfortunately, if you want premium features, they’re going to come in the form of expensive add-ons. However, Shopify eliminates the need for any 3rd party services, so when it comes to start-up costs, you’ll be saving a lot of green. The bottom line here is: You can do everything yourself!