[{"@context":"https:\/\/schema.org\/","@type":"BlogPosting","@id":"https:\/\/www.the-future-of-commerce.com\/2017\/05\/15\/when-choosing-a-cloud-commerce-platform-be-wary-of-the-free-lunch\/#BlogPosting","mainEntityOfPage":"https:\/\/www.the-future-of-commerce.com\/2017\/05\/15\/when-choosing-a-cloud-commerce-platform-be-wary-of-the-free-lunch\/","headline":"When choosing a cloud commerce platform, be wary of the \u2018free lunch’","name":"When choosing a cloud commerce platform, be wary of the \u2018free lunch’","description":"As commerce continues to get more and more digital and more and more social, companies of all shapes and sizes are trying to bring their businesses online quickly, easily, and at low cost. And therefore, many of them are opting for more streamlined, agile, cloud-based platforms. But even then, there are so many options to […]","datePublished":"2017-05-15","dateModified":"2021-09-07","author":{"@type":"Person","@id":"https:\/\/www.the-future-of-commerce.com\/contributor\/hansen-lieu\/#Person","name":"Hansen Lieu","url":"https:\/\/www.the-future-of-commerce.com\/contributor\/hansen-lieu\/","identifier":165,"image":{"@type":"ImageObject","@id":"https:\/\/secure.gravatar.com\/avatar\/ff37a636986c4928657e3405a7e9f7fc2faa6f01ecf1bcd81d957e8f27d41a27?s=96&d=mm&r=g","url":"https:\/\/secure.gravatar.com\/avatar\/ff37a636986c4928657e3405a7e9f7fc2faa6f01ecf1bcd81d957e8f27d41a27?s=96&d=mm&r=g","height":96,"width":96}},"publisher":{"@type":"Organization","name":"The Future of Commerce","logo":{"@type":"ImageObject","@id":"https:\/\/www.the-future-of-commerce.com\/wp-content\/uploads\/2023\/01\/logo-foc-schema-app-1.png","url":"https:\/\/www.the-future-of-commerce.com\/wp-content\/uploads\/2023\/01\/logo-foc-schema-app-1.png","width":172,"height":60}},"image":{"@type":"ImageObject","@id":"https:\/\/www.the-future-of-commerce.com\/wp-content\/uploads\/2017\/05\/thumbnail-6819bb56cfc58563fd702f9888c94038.jpeg","url":"https:\/\/www.the-future-of-commerce.com\/wp-content\/uploads\/2017\/05\/thumbnail-6819bb56cfc58563fd702f9888c94038.jpeg","height":370,"width":1200},"url":"https:\/\/www.the-future-of-commerce.com\/2017\/05\/15\/when-choosing-a-cloud-commerce-platform-be-wary-of-the-free-lunch\/","about":[{"@type":"Thing","@id":"https:\/\/www.the-future-of-commerce.com\/commerce\/b2b\/","name":"B2B Commerce","sameAs":["https:\/\/en.wikipedia.org\/wiki\/B2B_e-commerce"]},{"@type":"Thing","@id":"https:\/\/www.the-future-of-commerce.com\/commerce\/","name":"Commerce","sameAs":["https:\/\/en.wikipedia.org\/wiki\/Commerce","http:\/\/www.wikidata.org\/entity\/Q26643"]},"Commerce Cloud","Commerce Platforms + Software"],"wordCount":770,"keywords":["E-commerce"],"articleBody":"As commerce continues to get more and more digital and more and more social, companies of all shapes and sizes are trying to bring their businesses online quickly, easily, and at low cost. And therefore, many of them are opting for more streamlined, agile, cloud-based platforms.But even then, there are so many options to choose from. One seemingly attractive offer some platform providers are pitching is revenue-sharing pricing models, which promise sellers low cost-of-entry, as you don\u2019t pay a cent until your company starts earning revenue.Seems like a risk-free offer, but take a closer look and you\u2019ll see you may not be getting the \u2018free lunch\u2019 you were promised.      Dirty secrets of headless commerce: What some vendors intentionally don’t say                Interest in headless commerce solutions is surging, but some vendors are creating confusion about the technology. Learn what headless commerce really is \u2013 and what it's not.      Questions to ask when choosing a cloud commerce platformWhen evaluating these platforms that offer revenue-sharing pricing models, it\u2019s important to ask yourself the following questions to make sure you\u2019re really getting the most bang for your buck.1.) Does the solution meet your company\u2019s needs?It\u2019s so tempting sometimes to go with the more economical e-commerce solution, we forget to ask the most basic question when choosing a commerce platform: does the software meet the needs of your business? This is going to be the base of your entire commerce operation, your company\u2019s future, so it\u2019s important to stay focused on the things that are most important to your company. Ask, is the platform capable of meeting your business\u2019s objectives? Does it support the nuances of your industry? If no, consider the opportunity cost of choosing this over a platform that may have upfront capabilities that will work for you more long-term.2.) How flexible is the platform?One way platform providers are able to cut costs is by delivering a more standardized, templated solution to all their clients. This saves implementation time and money, but limits your ability to customize your experience to differentiate in the market. Think about how you want your site to look and function, and ask yourself if the platform is able deliver, or if you will be sacrificing differentiation to save money.And along those lines\u20263.) How do you implement features that aren\u2019t provided by the standard platform?For those features that you\u2019re not willing to sacrifice, but that aren\u2019t available in the standard version of the cloud platform, how will you bring those to life? Most often, you\u2019ll need to rely on third-party partners to build and implement those features and functionality, and those providers will likely not be included under the revenue-sharing pricing model. They\u2019re additional costs that may not have been accounted for until you\u2019ve already started down that path.4.) What happens when your revenue grows?Revenue-sharing solutions are the most enticing for smaller organizations with tighter budgets, because they\u2019re not on the hook to pay anything until they\u2019re make money. But most businesses don\u2019t aim to stay small for long. Be clear about what revenue growth will mean for the TCO of your platform. When revenue-sharing models charge a percentage of your revenue, you pay more the more revenue you generate. At a certain point, it stops being cost-effective. Be realistic about your targets and projections for both the short- and long-term, and factor those into the total cost of ownership of the solution.It\u2019s also important to remember that revenue \u2260 profit. You can drive a lot of revenue, but if your margins are low that\u2019s a higher percentage of your profits that will be going to pay for your platform.There are certainly scenarios in which revenue-sharing pricing models make sense. But whenever someone offers you a deal that seems too good to be true, it\u2019s important to dig deeper to make sure you fully understand what the offer entails, and risks involved. Remember that as you design and manage your business strategy, it\u2019s less about cost and more about driving value. Choosing a cheaper solution may save you money upfront, but at what cost? Find a solution that adds value to your business and you\u2019ll end up saving and winning in the long-term. And isn\u2019t that why you got in the business to start with?  Every digital moment matters.Are you making the most of them?1,000 business leaders dish on how to stand out from the crowd with a great CX. 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