(This post was last published on June 14th, 2018. We’ve updated it for accuracy and completeness.)
Magento and Shopify are two of the leading eCommerce platforms available for sellers. While Magento has led the market for many years, Shopify is the fastest growing platform with no signs of slowing down. Both offer compelling solutions for medium-sized to Enterprise online sellers. The question is then, which platform should you use for your eCommerce store?
Whether you’re implementing a new site for the first time or upgrading from Magento 1, there are many factors that play into your decision. This article compares and contrasts Magento versus Shopify Plus to help you decide which platform is the right fit for you.
Why Choosing the Right eCommerce Platform Matters
Not only is it competitive to sell online, but brands must constantly evolve to meet new customer expectations. Technology decisions for critical systems like your eCommerce platform can be a deciding factor in whether your brand is able to deliver for customers. You don’t want your technology holding the growth of your business back. Daily time spent maintaining and operating your eCommerce software is time taken away from product development and your customers. Do you spend more time wrestling with your tech stack or on customer experience?
Are you still on Magento 1?
Magento released a cloud-based 2.0 edition of their platform in 2016. Fast forward a few years, and Magento 1.x versions are quickly approaching end of life dates in June 2020. Now is the time for current Magento users to consider whether they’re upgrading to Magento 2 or a platform like Shopify Plus.
Even if you’re considering to move from Magento 1 to Magento 2, this upgrade requires you to migrate all your customer, order, and item data. Most migrations will take 3 to 6 months. Knowing that a move off Magneto 1 requires a full migration anyway, it makes sense to re-evaluate whether Magento is still the best platform for your business.
[Merchant Story: See how theBalm cosmetics upgraded from Magento 1 to Shopify Plus to effectively run their flash sales.]
How to Compare Open Source Magento and SaaS-based Shopify Plus
To start, an important difference between Magento and Shopify Plus is the type of software they are. Magento is a PaaS (platform as a service), open source solution while Shopify Plus is a hosted, SaaS (software as a service) platform. This affects how each platform stacks up against each other and how you can expect to interact with your platform.
Unlike Magento 1, Magento 2 has a cloud-based infrastructure, instead of on-premise (must be installed locally on own hardware). However, you still must license the software and secure hosting, which then gives you a framework to build and create a customized eCommerce store.
Shopify Plus, on the other hand, is SaaS-based. This means that Shopify provides turnkey functionality and takes care of the hosting for you. You can access your eCommerce store from any web browser and an internet connection.
(Read more in-depth about how SaaS and open source platforms differ from each other).
This difference though plays a part in how each platform can meet your needs in these main areas:
Open Source vs Out-of-the-Box Functionality
Each platform covers more than your basic eCommerce functionality. They’re top software in the industry for a reason. Instead, you should consider your unique business needs and how well each platform can meet them.
As an open source platform, Magento allows users complete access to modify its code, giving you endless creative freedom when designing and configuring your website. This attracts merchants with robust functionality or IT-control needs. An in-house or third-party certified Magento IT team can start with a blank slate for your store and have complete control over how its built. Because you start from scratch, launch times for Magento stores can take a few months or longer, depending on how sophisticated your webstore is.
For those who don’t want to worry about IT and set up, Shopify Plus is the better option. It’s an out-of-the-box solution, which means they provide upfront the foundation and core functionality of your store. While you can continue to build upon this, you can launch a Shopify Plus store much faster and have confidence that they’re following eCommerce best practices.
To be clear, this doesn’t mean that Shopify Plus isn’t still customizable. Shopify Plus has released a developer’s kit that allows you direct access to edit the platform’s code. You can choose to have more control or not.
When it comes to functionality, you should also consider:
Similar to Magento’s developer community, Shopify Plus has its own marketplace of approved apps and service providers that merchants can leverage to build out their store further. Since Shopify Plus provides more core functionality upfront, their merchants shouldn’t need to use (and pay for) extensions or custom developed apps as often as Magento users
2. Social Commerce
Shopify is a market leader when it comes to social commerce integration with your eCommerce store. Shopify recognizes that social platforms such as Instagram, Pinterest, Twitter, and Facebook are great avenues to reach new customers. Shopify has gone great lengths to include “buy” buttons for your eCommerce products right into social platforms. If you know social selling will be important to your customer acquisition strategy, Shopify has the better offering.
3. Customer Types
Who do you sell to?
B2C and Direct-to-Consumer – Shopify is a highly adopted platform among B2C and direct-to-consumer (DTC ) brands that are disrupting the retail landscape both online and in-store. As digitally-native merchants hyper focused on the online customer experience, Shopify allows these companies to quickly scale and evolve as needed. They provide leading eCommerce functionality like headless commerce, social media integration, and more. Because of their ease-of-use, DTC brands can quickly adopt new selling strategies as needed.
B2B – Both platforms started as B2C platforms that have continued to add wholesale and distributor eCommerce functionality over the years. Saying that though, B2B eCommerce is a different beast than B2C. B2B buyers have more complex needs which require more Enterprise-level functionality like managing customer-specific product catalogs, account terms, and buyer approval processes. Because of its customizability, Magento can edge out Shopify Plus for merchants who have complex B2B needs.
Check out the latest B2B functionality added to Magento 2.
Total Cost of Ownership
Shopify is subscription-based, meaning you pay Shopify a flat monthly subscription to provide you a service. That service includes web hosting, security, maintenance, support, and bandwidth on their API.
As an open source platform, Magento requires a few extra costs such as sever hosting, licensing fees, security and maintenance fees. These added costs can quickly add up to $15,000+ a year.
For an Enterprise solution, Shopify Plus can easily come out as a total lower cost for sellers. Typically, sellers pay around $2,000 a month for hosting, security, maintenance, and support. These costs are bundled in, instead of added on like Magento.
For both platforms, you’ll most likely work with a web design or development agency. Shopify Plus stores though can be more cost-effective. With its out-of-the-box functionality, Shopify doesn’t require developers to take as many hours to build a site that meets your vision. Magento developers on the other hand are building most of the site from scratch every single time. Depending on the site and functionality asks, Shopify Plus can save you at least tens of thousands of dollars in web design and development work.
From a financial perspective, Shopify Plus sites will be more affordable over the long run.
If you’re a mid-market or Enterprise business, you’ll most likely need to integrate your eCommerce store into other systems like your CRM, POS, ERP/Accounting, or fulfillment/3PL. Integration allows you to automate data movement between these systems to ensure efficient processes for order fulfillment, inventory management, product data management, and more.
Integration requires connecting or wiring up the interfaces between your systems so they can “talk to each other” or pass data between them. This is often done through APIs, or Application Program Interfaces. A system’s API affects what data you can sync and how fast you can do it. The good news is that both Shopify Plus and Magento have a robust API that integrates well with other systems like mentioned above. These two platforms instead differ in how predictable (and costly) integration projects can be.
As mentioned, Shopify Plus provides every merchant with the same, well-built foundation for an eCommerce store. They also, in some instances, limit what a merchant can fundamentally change about how Shopify’s software code operates. Because of this, it means that Shopify Plus integration projects are more straightforward, especially when connecting it to other cloud-based systems. When each Shopify Plus store has the same foundation, it’s easier for an integration provider to predict what the solution needs to look like. There will be less variability between stores.
Magento, on the other hand, provides only a loose framework for every merchant to start with. Then, they allow merchants to customize the code, even if it’s for the worst. This leads to more variability between merchants’ stores. Every integration project has to account for those unique requirements of your store, including overcoming bad development decisions sometimes. Magento integrations can be more time-consuming and complex, which can also lead to higher costs.
If you plan to integrate to other critical systems like an ERP, it’s important to understand what the scope of that integration project could look like based on your requirements.
You’re in charge of maintaining your Magneto store. After licensing the software, sellers choose their Magento hosting providers and any IT problems are your responsibility.
For some, this might be a positive. You want complete ownership and decision making when it comes to dedicating resources and maintaining traffic bandwidth to coordinate performance. You plan on having that expertise available or paying someone else for it.
For others, you won’t want this responsibility. You don’t see a need to hire and train an IT team to make those types of decisions. You don’t want to think about the backend maintenance to ensure your store’s performance.
Unlike Magento, Shopify Plus is a fully-hosted solution. Shopify Plus oversees maintaining your web store when it comes to security, site performance, upgrades, and more. They’re constantly monitoring for any issues. If anything goes wrong, it’s their job to fix it. One drawback is that you can share resources with other merchants, which is how Shopify is able to keep costs low. If you need more bandwidth, you’ll have to work Shopify Plus for it and expect additional costs.
You can’t sell online without a transparent plan in place to safeguard your users’ personal data. Not only do merchants have to think about cyber-attacks, but they also must meet evolving data privacy laws like CCPA and GDPR.
Each platform is concerned about its merchants meeting security standards like PCI compliance and data privacy laws. The difference is that Magento will give more of that responsibility to the merchant. Magento users will need support this in-house or work with their hosting provider to ensure their store is up to date on security patches. It’s up to you to make sure your store is prepared. Shopify takes care of standard security like PCI compliance of their platform and all users benefit from it.
Data privacy laws are a little bit trickier for each software vendor. Each law can differ based on who is controlling and processing what data. While both should equip you to make the necessary adjustments, data privacy laws can depend more on the merchant to take the right action, no matter what platform you choose.
Still on Magento 1? When June 2020 hits, Magento will no longer install new security patches for their users. If you plan on being on Magento 1 past this point, you need a plan in place to ensure your site stays protected and healthy until you’re ready to migrate.
How to Choose Between Magento and Shopify Plus
Deciding which platform is best for your business won’t always be an easy decision. Shopify Plus and Magento are two leading eCommerce platforms for a reason, so there’s a lot to consider.
At the end of the day, it all comes down to your unique business needs, budget, and long-term eCommerce strategy. Either platform will get you there, if it’s the right fit!
Think You’re Ready to Try Shopify Plus? Learn more about their eCommerce platform.
Here are other helpful articles to aid your research on choosing the best eCommerce platform for your business:
- How to Choose the Best B2B eCommerce Platform for Your Business
- Advantages and Disadvantages of SaaS eCommerce Platforms
- Comparing Saas vs Open Source eCommerce Platforms
- Best Practices for Remaining on Magento 1 after June 2020
- How to Choose an eCommerce Integration Solution
- eCommerce Replatforming Questions: An Honest Conversation
- Everything You Need to Know about eCommerce Replatforming