# Ecommerce Platform & Payment Gateway

The biggest decision in respect to 3rd party vendors is ecommerce platform. The way the site is being architected means that this decision isn't locking you in long term, however this is an integral part of the system and changing it is costly so it's important to ensure this is an informed decision.

The Ecommerce Platform manages a few essential functions.

These may include...

1. Inventory
2. Order management
3. Customer management
4. Price Lists
5. SKU management
6. Tax rules
7. Delivery rules & methods
8. Payment integrations

Most ecommerce platforms are starting to support headless sites.&#x20;

## Candidates

We reviewed&#x20;

* ~~Magento / Adobe Commerce Cloud Pro~~

  ~~*( cloud offering immature, PWA offering unstable )*~~
* ~~Saleforce commerce Cloud *( cost prohibitive )*~~
* ~~Elastic Path / Moltin *( weak offering, cost prohibitive )*~~
* **CommerceTools**
* **CommerceLayer**
* **Shopify Plus**
* ~~BigCommerce *( poor support & user experience )*~~
* ~~Snipcart *( lacks enterprise features )*~~
* ~~SAP commerce cloud *( cost prohibitive )*~~
* ~~Oracle commerce *( cost prohibitive )*~~

Many of these were ruled out early leaving 3 competitors in very different classes.&#x20;

**It's worth noting that Shopify ties you in fairly heavily to Shopify Payments ( powered by stripe ). This is an excellent integration and makes the experience from a developer and ecommerce manager excellent. However this comes at a price, 1.6% + 20p. This is less than what you are currently paying, however with your recently sales history we've managed to negotiate  IC ++ 0.5% + 7p with Braintree. This equates to  \~ 0.83% + 9p. This is an excellent deal. In addition if the store goes live prior to the end of Q1, Braintree will pay £10k towards the development.**&#x20;

We'd strongly recommend Braintree if you don't choose Shopify as your ecommerce platform.

## Requirements&#x20;

* [ ] Fast
* [ ] Payment gateway integration
* [ ] Developer experience
* [ ] User Experience
* [ ] Is highly extendable
* [ ] Good support
* [ ] High availability ( good historic uptime )
* [ ] Pricing

## :white\_check\_mark: Shopify

{% embed url="<https://www.shopify.com>" %}

Shopify is the fastest growing ecommerce platform in the world and powers over a million stores globally. To put that in to context that's more than 5X the stores that Magento powers. This ubiquity means they have an unrivalled ecosystem. Anyone can set up a store and quickly integrate it in to numerous third-party services. In the past 4 years they've been making their headless solution more powerful through their storefront api and sdk ( something Rotate° has actually contributed code to ).&#x20;

The platform is incredibly mature and the functionality around it is continually growing. The primary concerns around the platform are related to who they are serving. As their primary audience are small companies their enterprise offering is sorely lacking. Their support is poor, their uptime has been patchy in the last few years, and their api and site performance is below par.

Despite this Shopify is still an excellent and affordable solution. Given that they host and manage the checkout development costs are lower, furthermore with their ecosystem even in a headless setup there are still a vast number of 1 click integrations to take advantage of.

| Type                                     | Fee                                     |
| ---------------------------------------- | --------------------------------------- |
| Fixed Fee                                | £1,500 or 0.25% ( whichever is higher ) |
| Est Gateway Fees                         | 1.6% + 20p                              |
| Annual cost @ £6.5m, 17.5k  transactions | £125,510                                |
| Annual cost @ £8m, 21.5k                 | £169,510                                |
| Annual cost @ £10m, 26.9k                | £190,350                                |
| Approximate build cost                   | £120 - £200k                            |

* [ ] Fast
* [x] Payment gateway integration
* [ ] Developer experience
* [x] User Experience
* [ ] Is highly extendable
* [ ] Good support
* [ ] High availability ( good historic uptime )
* [ ] Pricing

## &#x20;:white\_check\_mark: CommerceLayer

{% embed url="<https://commercelayer.io>" %}

CommerceLayer is an enterprise headless solution. As they are purely headless they are able to rapidly develop the features that make a difference. When monoliths are developing their content management system, transactional emails, search functionality. Platforms like CommerceLayer and CommerceTools are able to focus on a far smaller feature set and rapidly develop them.&#x20;

CommerceLayer is younger than Shopify and CommerceTools, this has mixed implications. Their customer support is phenomenal compared to CommerceTools or Shopify. If a feature is missing and it makes sense, it will be put on their roadmap and launched within a few months. In some places their feature set is less mature than CommerceTools or Shopify, however in other areas the feature set far exceeds the likes of Shopify.&#x20;

CommerceLayer sits between Shopify and commerceTools. They are api first and enterprise focused,  the platform is designed to be used in a headless context. It's extremely powerful and extendable, however unlike CommerceTools they still carry some of the heavy lifting.

It's important to note that platforms such as CommerceLayer are very different to holistic monoliths such as Magento or Shopify. As mentioned they essentially provide a convenient set of APIs to leverage within your custom architecture.

In short with a traditional ecommerce platform you build upon it, with a headless first platform you build bespoke and leverage the platform.

Every part of the user experience is custom which results in higher development costs. It also allows you to curate the experience exactly to the needs of the brand.&#x20;

| Type                                     | Fee                              |
| ---------------------------------------- | -------------------------------- |
| Fixed Fee                                | £720 ( up to 3k sales a month  ) |
| Est Gateway Fees ( Braintree )           | \~ 0.83% + 9p                    |
| Annual cost @ £6.5m, 17.5k  transactions | £64,165                          |
| Annual cost @ £8m, 21.5k                 | £76,975                          |
| Annual cost @ £10m, 26.9k                | £94,061                          |
| Approximate build cost                   | £170 - £250k                     |

* [x] Fast
* [x] Payment gateway integration
* [x] Developer experience
* [x] User Experience
* [x] Is highly extendable
* [x] Good support
* [x] High availability ( good historic uptime )
* [x] Pricing

## &#x20;:x: CommerceTools

{% embed url="<https://commercetools.com>" %}

CommerceTools has an impressive client roster and is arguably the most enterprise focused solution on the market. They power Boots, Lego, Burberry, Audi, Rewe ( one of Germany's biggest supermarkets ), Moon Pig, Holland and Barret and many more. Rotate° are approved partners have have undergone their training in Berlin.&#x20;

CommerceTools provides a selection of api's to fit between your custom architecture. They are api first to the point where although they have an "admin" the expectation is that most clients will build something bespoke on their api's. All payment gateway integration is completely handled by your solutions partner (us). This results in high initial build costs, also high maintenance costs due to the amount of custom architecture. &#x20;

| Type                                     | Fee           |
| ---------------------------------------- | ------------- |
| Fixed Fee                                | £2250         |
| Est Gateway Fees ( Braintree )           | \~ 0.83% + 9p |
| Annual cost @ £6.5m, 17.5k  transactions | £85,525       |
| Annual cost @ £8m, 21.5k                 | £98,335       |
| Annual cost @ £10m, 26.9k                | £115,421      |
| Approximate build cost                   | £250 - £400k  |

* [x] Fast
* [ ] Payment gateway integration
* [ ] Developer experience
* [ ] User Experience
* [x] Is highly extendable
* [ ] Good support
* [x] High availability ( good historic uptime )
* [x] Pricing

## Head to Head. Shopify vs CommerceLayer

Shopify & CommerceLayer are very different platforms. Shopify is focused towards SMEs, they are a hosted monolith meaning they do everything. Many aspects of what they do is excellent. CommerceLayer on the other hand is an api first headless ecommerce platform. It is focused on a far smaller part of the puzzle. They are also enterprise focused and provide unparalleled support. However, development is more expensive and all the integrations required will need to be bespoke. &#x20;

**Key Differences:**

|                            | Shopify                         | CommerceLayer       |
| -------------------------- | ------------------------------- | ------------------- |
| **Market**                 | SME -> Enterprise               | Enterprise          |
| **Architecture**           | Monolith, with headless support | Headless Api driven |
| **Support**                | ok                              | Excellent           |
| **Development Cost**       | \~ £150k                        | \~ £200k            |
| **Speed**                  | Slow                            | Fast                |
| **Customisation**          | Some limitations ( checkout )   | No limitations      |
| **3rd party integrations** | Lots                            | None, all custom    |
| **Uptime**                 | Good                            | Excellent           |

1. Shopify is a cheaper initial build and ongoing maintenance&#x20;
2. Shopify has limitations on the customisation in the checkout
3. Shopify's checkout will be iterated and improved on by shopify at no additional cost
4. Shopify has a higher lifetime cost, and has limitations in respect to payment gateways
5. Shopify integrates with many third-parties, reducing development costs
6. &#x20;Shopify has low usage limits on their api, which sometimes results in custom integrations requiring additional engineering
7. CommerceLayer has far superior support
8. CommerceLayer has superior uptime.
9. CommerceLayer is Api first and as such is built from the ground up for modern ecommerce, rather than retrofitted.
10. CommerceLayer is faster than Shopify

## Cost Comparison

The table below compares shopify with shopify payments, CommerceLayer with Braintree and your existing solution. The annual costs are the platform costs plus the transactional fees. We've not added platform costs for your existing solution is this isn't completely known.&#x20;

| Turnover (M) | Transactions (K) | Shopify | CommerceLayer | Existing Solution |          |
| ------------ | ---------------- | ------- | ------------- | ----------------- | -------- |
| Design       |                  |         | £22,500       | £26,250           | £0       |
| Build        |                  |         | £147,500      | £192,500          | £0       |
| Year 1       | 4.5              | 12      | £92,400       | £37,430           | £77,550  |
| Year 2       | 5.85             | 15.6    | £114,720      | £58,959           | £100,635 |
| Year 3       | 7.605            | 20.28   | £143,736      | £73,947           | £130,646 |
|              |                  |         |               |                   |          |
| Total        |                  |         | £520,856      | £389,086          | £308,831 |

Given that CommerceLayer is a more enterprise solution, and that for financial reasons you'd possibly look to move to it after a few years, we'd recommend, if feasible that you go with CommerceLayer. This is a larger initial outlay, and higher development fees. But it is a true enterprise solution that should cover the additional costs within the first year. The above also negates platform performance. We'd expect to see the highest conversion with CommerceLayer as their api is faster which will have a slight impact on the speed of the site. Recently when we moved another client across to CommerceLayer we saw an increased conversion rate of 8%. The entire migration will be paid for within the first month.

## Recommendation...

CommerceLayer
