Would you rather spend £5,000 or £10,000 on something you really wanted?
It’s a question that gets a quick response. But what is the bigger picture involved? In this article, we wanted to discuss Total Cost of Ownership – and how changing your view can change your perception of what something costs.
What is TCO?
Investopedia explains TCO (the total cost of ownership) as “the purchase price of an asset plus the costs of operation…. what the product is and what its value is over time.”
In layman’s terms – there are hidden costs behind the ‘ticket price’ that you must consider when you are looking at an eCommerce platform. Going for the cheapest option, even if the features may seem comparable can lead to further costs further down the line.
Under the microscope, money managers have discovered that supporting such costs as equipment and software can set you back 5-8 times the initial purchase price of your business venture.
Choosing the right platform for your business model and products/services should command your careful attention because it can be the difference between spending a small fortune while going in the wrong direction and being successful.
Consider the operational costs
Operational costs, if not calculated correctly, can decimate your bottom line and even cripple your business. For e-commerce, the most important part is choosing your platform and making this decision solely on a low monthly membership fee may prove to be a false economy.
Spend the time to investigate beyond Shopify and other leading platforms with entry-level, cheap buy-in, but also hidden costs, e.g. transaction fees and proprietary payment fee percentages, limited functionality, and services that do not grow with your business. And on top of all those worries, you must beware of membership tiers that charge for necessary and basic business functions, such as SEO (search engine optimisation for your online visibility) and security.
Consider the cost of persevering with legacy systems
Maybe changing platform seems too daunting, and you feel you wouldn’t know where to begin with all of the technological advances and choice of platforms on the market. This is a valid concern, but staying with your legacy system, thinking that you can make do, or make a few small tweaks, to save you more than just the initial headache of having to research and choose something new may be a false economy in the sense that the headache that finally comes your way becomes a full-blown migraine.
Why sugar-coat it? Staying with an antiquated system that cannot keep up with modern technology, such as AI (artificial intelligence) that with the right provider can be made simple and intuitive to operate, could cost you your current customers and new business. Tracking inability, lost functionality, and being left behind is the consequential, ultimate blow.
How to pick a winning e-commerce solution
Picking the winning ‘horse’, or, in this case, best e-commerce solution, will save you customers, money, time, a major headache, and perhaps even save you from financial ruin, whilst giving you peace of mind and a ledger in the black.
Is it not better to research your options and invest your money more wisely to win the prize at the end of the race? In a nutshell, you need simple, flexible, and powerful solutions which equate to better commerce that works for you, your team, and your customers, bringing you success over time.
Look at features and benefits, not just ticket price.
The solution is a platform that can easily be customised to fit your budget, providing you with commercial stability to scale your business. With the BetterCommerce solution, you have a headless architecture, omnichannel shopping, a robust and user-friendly order management system (OMS) to manage and track your orders, complete visibility of your inventory with easy shipment choices for whatever business model you adopt, e.g. B2B (business to business), B2C (business to customer), or dropshipping.
You will also be excited about the high-level, dynamic elements of the Product Information Management (PIM) capabilities within our platform, but take a look for yourself.
And Better Commerce offers so much more.
The bottom line
In e-commerce and business, your TCO is your asset price plus your operational costs. The value you get out of ownership is the effort you invest in it. Without looking closely at the fine print of e-platform solutions and considering the bigger picture of your best long-term options, you will fall into the trap of false economy equating to a false start and a late finish, instead of making a smart, economical decision that will yield better, more lucrative, bankable results at the finish line.