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A Marketplace Software Guide: Why Choose SaaS Over Open Source

Editorial Team

The marketplace industry is currently going from strength to strength. 60% of digital sales are carried out through online marketplaces already and the number of new marketplaces is growing rapidly. With the sector becoming increasingly competitive and customers placing high demands on UX, the importance of technology to the success of a marketplace has never been bigger. As a result, choosing the right software to power an online marketplace has become a space all of its own. With so many different options available, it can be challenging to select the right marketplace technology for a particular business. To help marketplace owners decide on the type of platform for them, in this article we have focused particularly on why Software-as-a-Service (SaaS) solutions are the way to go for new marketplaces.

Benefits of Marketplace SaaS

1. Cost of ownership is lower

When it comes to budget, marketplace SaaS solutions lead to significant cost savings. In fact, according to our data, a marketplace SaaS solution saves 20 to 70% of Total Cost of Ownership (TCO). TCO is the single value regarding the total expenses incurred on the complete lifecycle of a capital purchase. Using a TCO approach to marketplace technology, it becomes apparent that SaaS represents a much lower cost of ownership than open source platforms.

The reasons for this is that there is no need to hire and retain staff with advanced coding skills. Furthermore, there is also very little overhead and management involved, and hosting, maintenance and updates are handled by the provider. Actually, many SaaS solutions also provide a guarantee on uptime. For instance, Shopery guarantees permanent (>99.98%) uptime with its software. So free-to-download open source platforms may be a tempting entry point for those with a lower budget, but it is the more pricey option when you account for the wider picture of marketplace ownership.

2. Quicker time-to-market

Close-up of a Wall Clock

Not only is the overall price of the marketplace reduced with SaaS solutions, but they are also timesavers for marketplace businesses. This is so because SaaS deployment is much simpler than that of open source. In fact, if broken down, SaaS comes down to the marketplace owner finding the right platform, setting up a payment method with the chosen provider, and providing account user details to staff. Infrastructure and upkeep are then dealt with by the provider.

Indeed, a good marketplace SaaS provider gives high-level technical support and guidance around the clock from experts who have worked on countless projects and know numerous solutions to problems that may arise during the set-up period. As a result, SaaS marketplaces do not require a long design period or set-up time. This is crucial for new businesses looking to be first in a niche space as time-to-market can be drastically cut, rather than the months it typically takes to build a platform from scratch through open source.

3. Apply industry best practices, off-the-shelf

SaaS marketplace platforms give marketplace owners access to a ready-made solution that is constantly updated by a team of experts to reflect the state of the art in the industry. While an advanced technical open source team may give managers full ownership of design, marketplace SaaS providers have a responsibility, and the capacity, to stay on top of the latest industry trends, features and designs (see Shopery’s store-front demo for example). This means the SaaS marketplace technology is always up-to-date and up-to-scratch.

Moreover, SaaS being full-service, a software provider can be held to the highest standards, as per their Service Level Agreement, and customers can seek compensation if these are not met. Benefits like these mean that SaaS services are increasingly becoming the norm, and are growing at an unprecedented scale. On the other hand, open source platforms, which rely on ‘pro-bono’ work, typically have security issues (i.e. when patches are not installed, bugs pile up, and necessary third-party integrations are not added). As an example, two open source platforms, Beyourmarket and Mayocat, have recently been discontinued and provide no updates to users.

4. Focus on managing the business (not the technology)

Group oO People Having A Meeting

As the time and cost of infrastructure are taken up by the SaaS provider, marketplace businesses can pool their resources and focus on other aspects of the business. Hence, the marketplace team can focus fully on defining and refining the revenue model, creative decisions and brand growth. More time can also be spent reinforcing marketing and communications efforts, establishing supply operations with sellers and kick-starting marketing initiatives to acquire clients. Marketplace SaaS solutions, contained within a set, clear and affordable price plan, help marketplace owners focus on the business and maximise resources in the process without having to stress about infrastructure.

As marketplaces continue to dominate digital sales in 2019, marketplace businesses face increased competition. This makes it even more important to select a technological infrastructure that works for them. Shopery’s project-oriented SaaS approach allows for a high level of customisation without the expenditure of a self-hosted solution. SaaS-powered marketplaces give their owners the edge over competitors with a decreased time-to-market and the benefits of integrated software, data and tools.

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About Insights

This guide will enable new marketplace businesses to minimise the risks involved with launching their projects and will boost the chances of success for your new marketplace. It’s crafted by the Customer Success team at Shopery, made up of e-commerce experts that have supported dozens of clients on the journey to the success of their marketplaces.

  • Define a winning marketplace strategy
  • Prepare a successful launch
  • Execute solid growth initiatives

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