According to industry statistics from the Magento Imagine trade show, there are about 225,000+ ecommerce sites running Magento software. Magento is the leading platform for open commerce innovation. Reading these stats, and looking at their website, it seems impressive. However, there are several things about Magento that you should be aware.
Magento: The Two Faces Of The Platform
Magento offers two main versions: The ‘Community Edition’ which is free and the ‘Enterprise Edition’ which comes with a hefty licensing fee.
The Community Edition is meant for small to medium size businesses and the Enterprise Edition is meant for large size businesses or companies who make most of their revenue through ecommerce. There are vast differences between the two versions which can and will have a major impact on your business (performance, cost, etc.).
Problem 1: Open Source = Vulnerability
Magento Community Edition is popular since it is free to download, install, and configure on your own. It is an open source ecommerce platform with a large marketplace, offering extensions and themes with a lot of capabilities. The problem with open source is that all of these extensions create a high-risk environment for security issues. By allowing anyone to freely download the source code, the Magento Community Edition exposes its weaknesses, facilitating code manipulation by hackers.
If this doesn’t concern you, ask one of the 7,000+ retailers who were victim to the Guruincsite malware in 2015, forcing Google to blacklist almost all of them within the first 90 days of the breach. Since then, they have released numerous security patches, however, hackers will not have to work hard to get back in as the open source nature makes their jobs easy.
Problem 2: Support Team
With open source ecommerce software, it is almost impossible to get help from the original developers.
In the case of Magento, help is provided through community forums, which consist of other users knowledge-sharing and doing triage themselves. This can lead you to not being able to find an actual solution that will help. A secondary issue that comes from seeking help through Magento’s support forum is the risk of ending up with spam because their forums are not regularly monitored.
Problem 3: Magento Is Expensive
Since the Enterprise Edition is not free to download, it has a licensing fee of at least $18,000+ per year. However, even the “free” version also has website development costs.
Estimated Website Development Costs:
- Basic Magento Sites: Meant for companies who are moving from a hosted platform or starting from scratch — $20,000-$50,000
- Custom Magento Sites: Meant for larger retailers who are either moving from a different ecommerce platform or are upgrading their existing Magento website(s) — $50,000-$150,000+
- Magento Enterprise: Meant for established retailers who do most of their business online — $150,000-$300,000+
Of course you can always choose to offshore your development to cut your costs down, but our experience is that you'll likely end up with a site that has more functionality, security and performance troubles in the end. In the end, you'll end up paying more in time and costs to have an experienced ecommerce Magento company rescue your site.
Development and Maintenance Costs
Building a site is only the beginning. If you want to keep your site up and running properly, you will be spending money on maintenance fees. These maintenance fees are to help with security patches, design work and more. If your company does not want to deal with figuring out how to implement a new site update, for example, then you will likely invest in the Maintenance and Optimization Plan. Costs for this can run from a few hundred dollars and up, depending on your complexity, hosting and integrations.
Although Magento has a thriving community, it can be hard to find authentic Magento developers. If you do find a reputable developer, their fees depend on their level of experience. A low-cost resource might be too good to be true.
The Hidden Cost of Lost Revenue
The Magento Community Edition installed on an average server is SLOW. Many online retailers are wooed by the open source software, but fail to invest in their store to ensure it runs at optimum performance. In order to help your site run in a fashion that your website visitors will actually tolerate, you will need to invest in a dedicated server to host Magento. Quality hosting for dedicated servers start in the $500 range. If you’re thinking you can do this right for less, your deal will end up costing you much more in lost revenue.
According to WPengine, a 1-second delay results in a 7% conversion loss and an 11% drop in page views. Translating to real dollars, a site with a $100 AOV and a 3% conversion rate with 2,000 sessions per day would be losing $1,033 a day. A 5-second delay equates to $2,884 in lost revenue per day. Can you really afford more than $1 million in lost revenue per year? This is when time truly is money.
At Acumium, we’ve often seen Magento sites with 5-9 second page load times. We've also had to rescue a site that took more than 40 seconds to load.
PCI compliance issues for the Magento Community Edition are a big concern, but if you’re going to accept credit cards on your site, you are required to be PCI-DSS compliant. On the Enterprise Edition, there is a separate platform, “Payment Bridge”, that handles all credit card processing, which is PA-DSS certified and helps merchants meet PCI compliance. Payment Bridge is not available for the Community Edition.
Although Magento is widely popular, it does not mean it is the right fit for you. Educate yourself before jumping onto any platform. If you're on Magento (community, 1.0 or even Magento 2.0), find a partner who not only knows Magento, but brings deep ecommerce experience (cloud hosting, integrations, PCI and marketing). With retailers and brands rapidly working towards a successful online presence, it’s important to find the best possible option for your needs so you don’t fall short of the competition.