Why Is Magento So Popular?
At Sellr we produce a hosted ecommerce solution. We have created a system that has everything in it to make an online store successful, literally everything, and you can use it for free including hosting. However we have a drop in the ocean compared to the number of users who use Magento. Why is this?
Marketing Model and Distribution
Magento has a great way of distribution mainly because it is open source and free. What this means is that Web Designers can get the code for free and then get merchants to pay them to set up a website based on that code. As a result, Magento has an army of web designers acting effectively as sales people who are able to make a living by selling Magento based websites to their clients for thousands.
Being Open Source means that web designers and coders can get the Magento code for free, and then change it to their own requirements. This is particularly advantageous to large companies who have their own development team that want to heavily customize their ecommerce website. This is the key reason why Magento is used on a lot of high street ecommerce websites.
Magento, being so prevelent on the internet will be under constant attack from hackers. However it also has a big user base so developers find and patch any security holes as soon as they are found. This is clearly good news, but only if every merchant using Magento is able to apply security patches as soon as they become available. Sites which install Magento and then leave it without constant attention to updates will be putting themselves at risk. This provides another revenue stream for hosting providers who can constantly update Magento installations and charge for the service.
With Magento, you have to arrange your own hosting. Big corporates often have their own complex (and costly) multi data center solutions, whilst small merchants would typically have to rely on a hosting provider to provide webspace where they can upload their store. Hosting is one of the most important aspect of any website.
The biggest problem with an open source system like Magento for many merchants is support. For a large company who has their own development team running the system, that's not a problem. However for a small merchant, it can cause a number of issues. If the merchant wakes up in the morning and their store is not working, who do they contact? It could be an issue with their hosting provider, a configuration issue with the software, an issue with their isp or local routing or something else, the merchant would need to be able to work this out and contact the appropriate person to resolve it. With a hosted system like Sellr, they simply call us - although with a hosted system like Sellr, it is likely that another merchant would have already reported any problems and it would have likely been resolved before this merchant noticed it.
If the merchant has technical questions, or wants additional functionality, then whilst there are a lot of Magento forums and communities, most are developer based and with wildly varying abilities for the participants. With a system like Sellr, they can simply call us to get the absolute authorititive answer to any questions.
Many web designers who install Magento also offer ongoing support contracts to their clients. Amazingly the cost of this usually exceeds the total cost of a hosted solution where this is included. Alternatively many web designers (perhaps most) charge tens of thousands to set up Magento and then provide no support whatsoever after the customer has signed off the work.
Whilst Magento is free, open source software, it typically costs thousands to pay a web designer to customize and install the software for a merchant to use. The money goes to the web designer, not the company which makes Magento. (Interestingly Magento - which is owned by eBay - seems to make its money by providing support to large companies using the system).
A system like Sellr is much less expensive, typically costing $30/£20 per month. This is usually less than the merchant would pay for just hosting their Magento site excluding all the design, installation and (possible) support costs.
On paper it seems very strange why any small company would use a system like Magento, however many companies choose to contact a local web designer who will likely supply them with Magento because it's where the highest profits are for them (as it is free). The merchant is happy because they have heard of Magento and seen it used on large stores, and so the cycle continues.
If a Magento merchant has to recommend an ecommerce system to another merchant, they are always going to recommend Magento because they spent so much money on it themselves. If they recommend a much less expensive hosted solution then they are effectively saying that they have wasted money. People rarely do this, instead psychology requires that you encourage others to make the same choices you made.
Why A Hosted System Like Sellr Is Better for Many Merchants
A key advantage of a system like Sellr, is that the system is run by one company who are dedicated to maintain, improve and support the service. If there are any questions at all then they can easily be contacted and be able to give an immediate authoratitive reply to any questions. If there are any problems then they will be fixed without the merchant having to do anything at all. Normally any issues would be resolved without the merchant even noticing. There are big advantages of dealing with one company - notably people in business need to spend their time on their own sales and marketing, and the mechanics of actually running a business. They shouldn't be chasing web designers or worrying about how reliable the hosting company is or having to ensure that updates and patches are installed.
Hosted systems are usally a lot cheaper, and a system like Sellr will have equivilent or more functionality that the most expensive online Magento Store. This is because we have full control over every aspect of the system and so it is easy to add new features and roll them out immediatly. Systems such as Magento get lots of new features, but you have to buy or obtain them, then install them into the code base. All processes which merchants shouldn't have to deal with.
Sellr is what is known as a SaaS (software as a service) system meaning that the merchant is simply subscribing to the service at very low cost and only for as long as they want to use the service. There is no huge upfront cost to web designers or developers and merchants can open a store in minutes. The future of all web services is SaaS. It is only a matter of time. (See Salesforce.com, Xero, and many other which dominate their sectors).
If you are using, or thinking of using Magento - take a look at www.sellr.com we think you'll be amazed!
(Although typically after amazement we suffer from the 'too good to be true'/'what's the catch' problem :) hint - there is none!)
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