(10 min reading)

So, you are thinking about building your own business, or maybe you and your partner are having a great idea and would like to find how to build a business from it?

How to launch your online business?

Data shows that, by 2023, e-commerce revenue is expected to reach $800 billion in the U.S. alone. Now is the best time to start your e-commerce business and build your own tribe.

There are many things to consider like the business plan, what is the product or service you like to sell, how would you deliver it, what technologies are there, what is the brand differentiator, when would you like to start selling? 

Read all 10 bullets to find many answers.

1. Choose your Tribe

To start a successful online business, you have to find the right tribe. What’s your area of expertise? What marketable knowledge or skill do you have? Where do those skills or products fit in the market? What type of products or services do you want to sell?

You must have an idea of what kind of business you want to build, start by researching the market. Look at other businesses in your area and see them as joint opportunities. When looking at an example of a successful e-commerce business in an industry, ask yourself:

• How are they reaching customers?
• What appeals to you about their website?
• What’s their business model?

Some logistical questions you’ll need to answer when finding your tribe includes:

• Is your product or service? 
• Is physical or digital? 
• Do you deliver local or international?

Will you base your business around one-time orders, bundles, or a subscription model?

Get as many business ideas as you can, the online business is super competitive. You’ll want to do some serious thinking about what sets you and your business apart before starting your own e-commerce business.

If you have expertise that’s in high demand, capitalize on that. If you have years of experience in music or baking, for example, start a blog to write about that skill and establish yourself as a knowledgeable person in the market. You can use your e-commerce store to offer your products or services, on-demand online courses, or local deliveries of experiences in your area.

2. Do your research

Find the top competitors in your space and do some research on their history and business model, and get products ideas by researching trending products. Ask yourself what they’re doing that you can follow. Find out what people are looking for in your business and figure out how you can provide it in your unique way.

You’ll also need to identify the barriers to entry in your field and how you can overcome them. Will you need to invest in paid ads?  What is the cost of an e-commerce platform? Need for expensive equipment? Where do you manufacture your products? What other challenges will you face when going to market? How much do you need to invest? Can you start small and then scale your e-commerce business?

Identify any opportunities in the market your product or service can fill. Even if it is something not new, try to deliver it in a way that is unique so you can add value.

Once you’ve identified your opportunity in the market and know what value you’ll bring to the customer, consider doing a SWOT analysis — which stands for Strengths, Weaknesses, 

Opportunities, and Threats. This modeling technique can help to identify potential challenges so you can plan ahead your strategy for your e-commerce business.

Strengths and weaknesses are typically things you can control, like:

• Company culture
• Your reputation
• Your customer base
• Geography
• Partnerships
• Intellectual property
• Assets

Opportunities and threats, are things not in your control, but you can plan ahead, like:

• Regulation
• What suppliers are in your market
• Your competitors
• The economy
• Market size
• Market trends
• Gaps in financing

3. Choose your product and target market

There are several ways you can use to choose your e-commerce product or service. You can provide a solution for a problem in any marketplace, local or worldwide. Lean on your passion. Try these options for finding a product or service you can sell online.

Think about your personal experience. Have you worked in a certain industry that gives you insight others don’t have?

Is there an opening in the market for something that people will need soon based on trends in your industry? Recognizing a relevant trend can make you a leader in the market. Something that fulfills an existing need in a new way. 

You can spot trends in many ways:

• Social listening. Hang out on social media where others in your industry post or where your target customers spend time and see what they say. Browsing trending hashtags or using social listening tools to gather data over time can also provide valuable insights.
• Following search trends. Google Trends is a great place to see what trending products people are searching for. It can also tell you the keywords used most commonly in search, and what problems people are commonly trying to solve.
• Browsing e-commerce websites and aggregator sites. Pages like Trend Hunter or assorted subreddits for your niche can help you sight into developing trends before they get big.

Customer reviews also provide a wealth of data on what your prospective buyers expect from a product. Browse reviews of products similar to the one you have in mind and see what people say. They are a great resource to get new products ideas. Addressing an unsolved need is one way to differentiate your product in a market.

When researching keywords, make sure you look outside of Google. While Google is the search engine most people use, online marketplaces like Amazon, Wish, eBay, or Alibaba have their search functions.

If you’re thinking about selling a product, type in the product name on these sites and see what keywords come up. Say you’re selling guitars. Typing that into Amazon’s search bar turns up suggested search terms like “guitar lessons” and “guitar experiences”. Those results can give you more ideas of what you can do to differentiate.

Finding a market

As you’re gathering product information, study your target market. Who is your ideal customer? What characteristics do they have? This is where creating customer personas is useful.

Personas are fictionalized versions of your ideal customers that allow you to try and predict how they’ll behave. You can create a picture of the person you consider would be best served by your product or service, and figure out how to attract that person.

Answer questions like:

• How old is this person?
• Where do they live?
• What is his/her job? 
• What do they care for?
• What problems do they face?
• What is most important for them?

With all of this, you can find ways to reach them online and what messages they’re more likely to respond to. The information will help you market your product or services more effectively.

4. Validate your product

Now you have an idea for your product or service, and you know who you might sell it to, now you need to validate whether you are right and how to execute the business idea. You need to see whether your business idea is viable in real life. 

You can use several criteria to evaluate your product’s viability. Evaluation criteria can be split into two main categories: market-based and product-based criteria.

Market-based criteria

These are market factors that will influence your product and business model. You’ll want to look at:

• Market size and demand for your product/service
• Who your competitors are and where are they
• Is this a trend, fad, growing market, or flat market
• Whether customers will be able to get this product/service from other sources
• Who your target customers are

Product-based criteria

Once you have an idea of where the market is going and who you’re marketing to, you can move on to the next set of criteria:

• Your selling price
• The potential markup for your product or service
• How many products you’ll stock
• Will you offer a subscription
• The size, weight, and durability of your product, if you’re selling something physical
• Whether you’re likely to experience seasonal buying variations
• Whether your product or service solves a pain point or is more of a passion
• Whether your product is consumable, disposable, or perishable
• Whether your services are re-purchasable or 1 time only
• Regulations or restrictions around your business

Looking at the market and product-based criteria can give you an idea of how much it’ll cost you, how you can sell it, to whom and how many times. 

These criteria can give you a good idea of your product or service’s potential, and help you avoid common mistakes. If you’ve determined that there’s enough market for your product and services, you can move on to other aspects of your business model.

5. How you will source your product or service

If you’re selling a physical product, you’ll need to figure out a model for obtaining it and shipping orders to your customers. There are a few models you can explore here:

Make it

You make the product yourself, by hand, and get it to the customer. This is a highly favorable option if your product is something you can get the ingredients for and make cheaply, like home-baked foods or hand-crafted gifts. You’d need to purchase ingredients in smaller batches to start, you can control the cost and the risk, then scale up when you have more sales.

Manufacture it

If your product is something you cannot make yourself, you could partner with a manufacturer. This alternative makes sense if you have a product you plan to sell in large numbers, as manufacturers normally require you to order in large batches. You’ll need to be able to cover the cost of those initial purchase orders.

Wholesale and resell

Buying your desired product and selling them through your store with a markup. You don’t have complete control over pricing, as the manufacturer sets the price of purchase. Margins for selling wholesale products are around 35%.

Dropship it

A good option if you don’t want to deal with inventory, dropshipping involves partnering with another company that would ship the product for you after purchase. There are no startup costs to make the product on your end, your margin is only about 15%. 

Digital

Guides, eBooks, Blog posts, templates, online video classes, selling your expertise. Anything people can download has the potential to be a product. Digital products can also be a service like consulting, coding, writing, therapy, social media management, or graphic design.

Digital downloads or services are suitable for customers and, depending on what you’re selling, they usually have a low overhead cost too. Experiment with different things until you hit on the product or service that’s right for your business and passion.

6. Do your business plan

You’ll need a road map to follow to keep your business on the right track. Once you’ve defined all the basics, writing a business plan will help you establish goals and get into the details of what you’ll need to run your business and sell to your customers.

If you’re going to get a business loan, lenders and investors will require you to have a business plan. Make sure you make your plan as detailed and professional as possible.

Your business plan should include:

• What your business is
• What you’re selling
• What is the market
• How your business model works
• SWOT analysis
• Company structure and roles
• Financing and capital
• Other resources

Keep your target market and buyer persona in mind as you develop your plan. 

The outline for your business plan will look something like this, from beginning to end:

1. Executive summary
2. Company overview
3. Market analysis
4. Products and services
5. Marketing plan
6. Logistics and operations plan
7. Financial plan

If you’d like something more detailed to start with, it’s easy to find free business plan templates online.

The most important thing is to know what your goal is when you write your business plan. It’ll look different if you’re writing one to obtain startup funds than if you’re outlining the business plan for yourself.

Make sure you keep your tone consistent throughout the document. The best way to ensure this is to have one person write and edit the whole document, completely edit the document before presenting it to anyone.

Finally, keep your business plan short and to the point. It should be 15 to 20 pages max. Make sure it’s long enough to communicate the relevant information.

7. Business name and legal structure

Naming your store is one of the creative aspects of starting an e-commerce business. You’ll need to come up with something that catches the eye, describes your brand, and hasn’t already been taken by somebody else.

You can typically search for domain name availability on Godaddy or CheapDomains. It’s also good to run a search with the U.S. Patent and Trademark Office to avoid future problems. 

A good business name will set the tone for your online store. The name plays into the company’s branding, and the product itself.

When it comes to making your business name, remember to:

• Keep it simple
• Differentiate yourself
• Get creative
• Be original

You’ll also use your business name when you register your business. How you choose to register will affect you legally and financially down the road, so it’s worth doing a little homework to determine which type of legal structure is right for you.

You’ll register your business as one of the following:

• Sole proprietorship
• General partnership
• Limited Liability Corp
• Corporation

Each one will have benefits and drawbacks. You should consult an attorney or other legal expert to determine which one you should choose.

8. Permits and licenses

Some business types need an employee identification number (EIN), it can help keep personal and business finances separate. It’s free to apply through the IRS, and the number is usually assigned right away. You can also apply for an EIN by mail or fax.

You’ll also want to apply for any permits or licenses your business will need to operate in your state. If you’re operating your e-commerce business entirely from home, you won’t need the same kind of permits as a traditional store.

You’ll want to make sure you’ve got it covered. Check your local government’s website or get professional advice for permits or licenses you might need to operate in your state.

Types of permits or licenses you might need for your business include:

• Sales tax permits 
• Professional and trade licenses for certain industries
• Health, safety, and environmental permits
• Signage permits

If you need permits or licenses, be aware you’ll have to pay a fee for them. Add those expenses into your business budget upfront so you don’t have to deal with any financial surprises.

9. Create your eCommerce

Now that you’re finally ready to launch, it’s time to choose technologies and build your online store. There are many e-commerce platforms out there to choose from like Arcadier, BigCommerce, VTex, Shopify, Wix, and many more, so you’ll want to research which fits your needs better.

Depending on your need for a custom unique experience, a headless API eCommerce SAAS is best suited for entrepreneurs and large companies who want to have full control over their online business and but also have everything to effectively market and sell products online.

Remember once your customer makes a purchase, keep them engaged with post-purchase follow-up. You can configure a campaign to users who visit your site, send them offers, specials, best deals, or recommend other products your customers might be interested in.

10. Marketing your new business

Now that your shop is planned out and set up, it’s time to tell your potential customers about the new business and start selling. The research of your target audience will suggest where you’ll run your ads and what content you’ll create to bring in customers.

Don’t be afraid to use multiple channels to market to your customers. If you’ve got a blog, promote it on multiple social media outlets. Put out content relevant to your niche on Facebook, Twitter, Instagram, and YouTube. Try out different tactics in your marketing strategy, like Facebook ads or partner up with affiliate marketers. Use landing pages that make it easy for customers to buy your products.

Be careful about your page copy, product description, and make sure it adheres to current SEO best practices. Make sure your site is simplistic and easy to navigate.

You should consider investing in CRM (Customer Relationship Management) tools for following up with customers, building email campaigns, and keeping them up-to-date with your business offerings, keep your tribe alive is a continuous delivery process.

Get started with Towa e-Business Services

Many things will happen when starting an online business. With the right team, proven process, agile practices, best technology you can make it a success! 

Towa integrates as part of your team to build awesome eCommerce Experiences.

We can build great ecommerce plataforms together

Towa Software has over 20 years of experience to guarantee the quality of every line of code, we are proud of our products and services delivered.

We have expert Project Managers and Innovation Consultants along with top talented teams who have delivered awesome products to customers in U.S.A, Canada, Mexico, London, and Australia.

As a leading software development outsourcing company in the USA and Mexico, we have extensive experience in many fields including fintech, banking, payments gateways, e-commerce, retail, marketplaces, health care, omnichannel, and many more.

You can contact us at support@towasoftware.com or give us a call via (+1) 210-787-4525 for more information.

You can Book a 15-min call call with one of our Customer Success Managers for a conversation.

How to Build an Online Marketplace: Custom Development with Marketplace Software

Got an idea for a marketplace you want to implement?

Here you will learn how to build it, the options you have and important considerations for creating an online marketplace.

Two main options to build your own marketplace: 

• Custom development
• Off-the-shelf solutions

Custom development of your online marketplaces

Custom development means building software for a client from scratch, all new or with API services. In this case a custom marketplace software. You can hire an in-house team of developers or outsource your marketplace development.

Custom development is a good choice to:

• Commit to build a long-term project
• Raise investment and solve a specific pain
• Have greater flexibility
• Add more features and specific customization 
• Have control of your project
• Integrate with any external APIs and services
• Have a scalable solution
• Build a custom UI/UX

Pros of custom marketplace development

• Compatibility: your marketplace can be made compatible with different devices, technologies, external API services and other tools.
• Personalization: you can build the marketplace to your specific business needs and requirements.
• Scalability: a custom marketplace can handle any number of listings and users, no limit in growth.
• Security: custom development allows more tools for securing your marketplace against fraud and malicious activity.

Cons of custom marketplace development

• Time: to build something great requires time and commitment from a team, finding the right partner and dedicated team is essential. 
• Cost: custom development requires bigger investment. The bets practice is to build an MVP to gain traction, find investors to raise money for further product development.

With consumers consuming content and making purchases through many touchpoints traditional eCommerce platforms are in need to accelerate innovation.

Marketplace solutions

Off-the-shelf software is a ready-made solution. They can be a good quick start for validation of the business. 

Off-the-shelf solutions are best suitable for

• Validation of business idea
• Easy to implement solution
• Use out of the box features 
• Less investment

Types of marketplace software builder:

1. SaaS – Software as a Service
2. CMS – Content Management System
3. Vendor-hosted
4. Self-hosted (open-source or closed-source)
5. Headless API – Application Programming Interface
6. Marketplace Builder with SDK
7. Marketplace with a basic front-end template
8. PaaS – Platform as a Service

1. SaaS – Software as a Service

SaaS is a software model where software is as subscription, rather than bought and owned, and is centrally hosted.  

The Saas marketplace platform could be the most suitable for marketplaces with a relatively simple business idea, or a niche & non-technical team. 

One of the most common pricing models for such services is a monthly and yearly subscription fee. The exact price may depend on the number of transactions made through your marketplace, the number of listings (published goods or services), or the total number of users that have been registered on your platform.

Pros of SaaS for marketplaces

• Little or no technical effort to start from the founder’s perspective
• Experienced technical support from SaaS provider

Cons of SaaS for  marketplaces

• Low flexibility in terms of both functionality and UI
• High price after reaching some number of users, listings etc.

Hosted version:  

• The provider takes care of servers and tech support.
• You get regular updates of version and latest features
• Some payment gateways are available
• Little technical knowledge is need
• Little or no customization the backend
• Limited customization frontend (CSS, HTML, and JavaScript)

Self-hosted version:

• You are responsible for installation
• You are responsible for the technical skills
• The level of support depends on many factors
• Some code can be re-written
• Requires bigger investment

Best choice Vendor: Arcadier Marketplace Builder – Scale version 

2. Content Management System (CMS)

СMS is a software used to create and manage digital content. Marketplace CMS gives more flexibility than custom SaaS in terms of logic and UI customization. The developers for the marketplace team have more control over the code base and can create pages and transaction flows with more complexity. To build the marketplace you must hire a team of developers who have experience with this specific CMS or tech stack on which it is built.

Pros of CMS

• Flexibility for UI and business logic customization
• Can access a pool of vendors 

Cons of CMS

• Need to find the right developers with a particular CMS tech to customize it (if a vendor doesn’t offer any customization support)
• Additional development cost, if it doesn’t feature public API or integration with external APIs.

Vendor-hosted: 

• Vendor offers hosting and deployment services. 
• Vendor provides backups and updates for your marketplace
• Access a team of dedicated developers through the vendor to customize it according to your needs.

Self-hosted: 

• open-source marketplace CMS or it can be a commercial lifetime license
• You control deployment, scale and customizations to meet your needs
• You are also responsible for technical support.

3. Headless API

Marketplace Headless API (or so-called API as a service) is the evolution of SaaS marketplace technology. An API is a set of requests and methods between a server and a client.

All the vendors of Headless Marketplace APIs provide great flexibility for customization to build your marketplace idea. A great solution can be built with APIs. They are also great to customize the UI and logic.

Some vendors offer an SDK marketplace library (or set of libraries for different programming languages) that wraps low-level calls to your API from marketplace front-end over HTTP or GraphQL, this can accelerate your development. 

Some marketplace API providers offer a frontend template that uses their marketplace API (+ SDK). A particular marketplace developer may use it as a starting point and customize or even rewrite it from scratch later if needed.

Pros of Headless API

• Totally customizable UI and maximum business logic flexibility (with the API endpoints)
• Easy to integrate Headless API into existing website or e-commerce sites (Some API vendors offer connector scripts for some target e-commerce platforms)
• Full flexibility for marketplace builders in terms of API support, QA and DevOps

Cons of Headless API

• The UI and UX for the marketplace need to be created from scratch or based on a frontend bespoke template. 
• Some vendors manage hosting, deployment, and backups of the front-end. 
• Need for a dedicated team of engineers to build your marketplace

Top Vendor: Arcadier Marketplace – Enterprise version 

4. Platform as a Service (PaaS)

“Platform as a Service” or “Marketplace Platform” is the new enterprise type of a marketplace tech approach. PaaS is a digital platform that allows people to build marketplaces and services by using the API services.

Paas is a great toolkit for a marketplace builder, means more flexibility for the UI/UX and logic are APIs, the deployment and administration are done through the platform portal interface. It is a mix of open-source, API as a Service and Infrastructure. 

Here you gain much more flexibility for customization. Here you have access to the frontend and backend. The downside is that you’re tied to the platform’s grid of deployment and scaling servers. For some, you need your vendor to provide DevOps and support. Other vendors will help to provide Tier 1 services for scaling at a cost. 

Pros of PaaS Marketplace Builder

• All pros of the Headless API
• Plus some Vendors provide support and consulting for both front-end and back-end parts of a marketplace

Cons of PaaS Marketplace Builder

• There is some Vendor dependency in terms of long-term commitment 

Best Vendor: Arcadier Marketplace Builder

What to consider when deciding to develop a marketplace?

Budget

Is your capital under USD $25,000? An off-the-shelf solution could be an option of low-budget to start with limited functionality. Another option available to you is starting with a discovery phase and building PoC, if you plan to pitch your idea to investors to raise money.

Do you have USD $25,000+? We suggest building something with a Saas, Paas, with Headless API to customize your Marketplace. 

Deadlines

Want to launch a marketplace MVP in less than three months? Your options are SaaS Of-the-shelf. 

Have more than three months? Go custom, build something with a Headless API option, create our unique ecommerce experience. 

Investments

Have limited funds? Go with a pre-build Saas or Paas, with litte customization.

Are you willing to fundraise further? Custom development is better to innovate, using a Headless API vendor will be the best way to go. Hire a dedicated team of experts. 

Size of your marketplace

Less than 100,000 users in your marketplace? SaaS or PaaS are a perfect fit. Find if the vendor is able to scale when needed.

Planning to have more than 100,000 users? A Headless API with scalability or custom development with a Team of experts are the best approach for scalability. 

Technical Skills

Not Tech founders? You can hire a Team of eCommerce experts to build a custom marketplace with SaaS or PaaS. The top value of custom development is personalization. By building a marketplace with the right tools, you will be able to design it exactly the way you want it to be. 

Want to hire a dedicated team of eCommerce experts? We might be able to help you, depending on the stage of your eBusiness we can jump in, build a team of experts, to provide the right mix of tech skills, innovation and business sense.

Summary

When planning to build an online marketplace you have two options: custom development or an off-the-shelf solution. 

Off-the-shelf software for marketplaces comes in four different shapes: SaaS, CMS, Headless API and PaaS.

While deciding what is most convenient for you business, remember these questions:

• What is your budget?
• When are your deadlines?
• Do you plan to fundraise?
• What is the desired size of your marketplace?
• Do you have the technical skills?

If what you need is a fast and less expensive option? 

Then an off-the-shelf solution is the way, we are the right partner to help you build your MVP with best time-to-market and with little investment. (SaaS, PaaS, Headless API) 

But if you want to build a marketplace to your specific needs, scalable, more secure, hyper-personalized?

Then custom development is what you need. Here at Towa Software, we build custom marketplaces with highest-standards of quality, best rates in North America and with an expert team of developers, ecommerce consultants, innovation manager, UI/UX designer, QAs testers and Scrum Masters.

Book a 15-min video call with us. 

The world is changing and eCommerce is developing faster than ever.

With consumers consuming content and making purchases through many touchpoints traditional eCommerce platforms are in need to accelerate innovation.

There are new purchase buttons on many devices, from tablets to IoT in the kitchen and laundry rooms. You can even by with voice commands with Alexa and Google Home, read reviews, and place orders. The new consumer is adapting to the new IoT era, even if most retailers are not yet.

eCommerce companies who are moving with this trend are gaining market share, while others are facing challenges to move ahead. One of the major challenges is how to create these new channels, how to build these solutions?

The answer is API Headless eCommerce.

What is headless API ecommerce?

Is an eCommerce Solution that stores, manages, monitor, delivers any product or service without a default front-end delivery channel. Meaning you can build your own customer experiences with it.

With a headless eCommerce platform, the front-end (or the “head”), which can be a template, theme, or any desire storefront, is decoupled and can be changed, removed, or added to innovate your unique customer experience and consume the same backend.

Developers can use APIs to deliver things like products, quantity in stock, customer reviews, or top-selling items to any screen or device, while the front-end developers can build in any framework, channel, or device.

Basically, all functional elements (such as forms, blogs, banners, products, etc.) of the system can be programmatically managed. This includes the creation and management of the content components.

In other words, headless eCommerce architecture is built for the new age (mobility, IoT, hyper-personalization)

In contrast, traditional eCommerce platforms have their heads define and locked. They have a predefined front-end that is tightly coupled with the back-end, so even if there are plenty of customization features and unrestricted access to code, the platform is only designed to deliver content in the form of websites and maybe native mobile apps.

A headless API eCommerce architecture delivers a platform via a RESTful API that has a back-end data model and a cloud-based infrastructure. Since the platform is not coupled with the back-end, new eCommerce brands can build and deliver anything to satisfy customer needs.

Now new eCommerce players can build products, services, and payment gateways on top of smartwatches, kiosk screens, Alexa devices, and everything you can imagine.

How headless API eCommerce works

An eCommerce platform or software as a service works by communicating between the presentation or front-end channel and application layers through web services or application programming interface (API) calls.

So for example, when a user clicks a “Buy Now” button on their smartphone, the presentation layer of the headless eCommerce platform sends an API call to the application layer to process the order. The application layer responds with another API call to the front-end layer to show the customer the status of their order.

Headless API ecommerce vs traditional ecommerce

Here are three main differences between traditional ecommerce platforms and API headless ecommerce services:

1. You build your own front-end

Traditional eCommerce

Front-end developers working on a traditional commerce system encounter several constraints when it comes to design and the overall process. Any changes made would require a great deal of time to edit the database, the code, and the front-end platform as well. Developers are also limited to what can be updated and/or edited without the risk of voiding a warranty or preventing any future upgrades.

API Headless eCommerce

With the removal of the default front-end layer, headless eCommerce enables front-end developers to create a user experience from zero which fits perfectly with their target market needs. Front-end developers don’t need to worry about modifying databases in the backend as all they have to do is make a simple API call. In other words, front-end developers are given all possible tools to craft personalized customer experiences.

Here you can work with product managers, innovation managers, and marketers, to define what is the best experience for your company.

An API headless solution is far better than a based template

2. Full customization & personalization

Traditional eCommerce

Traditional platforms offer a predefined experience for both your customer and for the administrative user. But these platforms do provide not much flexibility for customization or personalization. If you are satisfied with the experience provided by these traditional platforms, that experience is the default for all customers.

API Headless eCommerce

Traditional eCommerce platforms constrain developers and users to what they define as the correct user experience. With API headless platforms, since there is no front-end, developers can create their own user experience from zero. You have more control over the look and feel of your eCommerce platform and you also have control over the user experience for both your customer/merchants and your admin users.

3. More flexibility and adaptability

Traditional eCommerce

In traditional solutions, the front-end is tightly coupled with the back-end coding and infrastructure. This leaves little or no room for flexibility to make any desired customizations. To make single customization, developers need to edit multiple layers of coding between the front-end right through to the database layer that is defaulted in the back-end.

API Headless eCommerce

Since headless eCommerce has already decoupled the front-end and the back-end, this creates endless possibilities for customization when required. To make any changes, you simply need to have a front-end user experience developer. You can make changes either big or small, from implementing a custom checkout flow to adding a new field to a customer account — both are very straightforward to execute with an API headless eCommerce architecture.

API Headless ecommerce: Advantages

The biggest retailers are switching to API headless ecommerce; there are many reasons why your Brand needs to do it too.

1. Omnichannel

A headless content management system will help publish your content anywhere. For an eCommerce site, that means showing and selling your products, discounts, or customer reviews to any channel you want to.
You can sell through Alexa, your mobile app, progressive web apps, and even through refrigerators with screens.

With a natively headless API eCommerce platform — like Arcadier — you don’t have to re-architect your platform to publish across channels. It’s made from architecture to be decoupled from the original user template, it is made to facilitate building your own customer experiences.

2. Keep your competitiveness

A headless API eCommerce platform enables you to deploy constant updates without impacting your back-end system or other services like Purchase History, Checkout process, onboarding process, you can completely customize your marketplace experience. So you can easily make any changes to your front-end to match consumer needs and market trends.

Major eCommerce brands using traditional platforms usually roll out an update every few weeks. In comparison to market leaders whom they deploy updates every day or every week, with less service interruption.
With a decoupled system, you don’t have to roll out an update to the entire system, only part of the system. You can update and deliver what your consumers want faster, with less impact on the overall system and keep your competitiveness.

3. Agile Marketing

A headless API eCommerce system can encourage new technology adoption with ease. This is perfect when designing new customer experiences. The system architecture helps marketing and business teams deploy multiple sites across different brands, divisions, and portfolios.

Finally, thanks to the flexibility provided by a headless API eCommerce platform, marketing teams deploy a new site in days instead of months, your brand can reduce the time-to-market when launching a campaign from a few weeks to a few days.

4. More personal and consistent customer experience

The customer experience must be consistent within your brand and stores, even though customer needs may change over time, they should receive a consistent customer experience across all devices and channels.

Customers want to buy from eCommerce brands that understand their needs across all channels. The eCommerce company already knows what a consumer has bought some items. It uses this data to power the personalization of eCommerce, mobile apps, and social channels.

5. Seamless Integrations

As you may already know, a headless eCommerce solution must have an API, which makes it easier to integrate and communicate with other front-end devices. You can add new devices, expand to new opportunities, and outreach to more customers using the same API. Also, it will take your team weeks to integrate your eCommerce platform with a new device, not months.

Towa customers experienced this first hand, using Arcadier headless API eCommerce platform to integrate with Legacy systems and ERP, an integration that helped streamline their customer journey workflows.

6. Better conversion

With a headless API eCommerce platform as a service, you can try and test different templates and approaches. For example, you could experiment with a different back-end search solution while running the same front-end search.

A headless API eCommerce allows you to run continuous tests and optimization cycles which will help you get a better understanding of your customer, while improving your rate of learning faster than others retailers.

7. Faster time-to-market

If you plan to build a multi-channel or Omni-channel eCommerce experience with a traditional eCommerce platform, your time-to-market will be slower, moreover scaling will be difficult to achieve.

A headless API eCommerce platform empowers brands to focus on building front-end experiences on different devices and touchpoints, the content and listings are stored centrally and delivered via API to everywhere you want to. Decouple architecture facilitates a faster time-to-market better suited when planning to open new channels, entering new countries, and innovating the market.

The shortcomings of headless eCommerce

Headless API eCommerce platforms have a few issues that need addressing.

1. Manage costs

A headless eCommerce platform does not provide you with a front-end, developers will be required to build their own. This is great, as it allows developers to build front-ends that are bespoke for each device and touchpoint. On the other hand, building templates and user interfaces from scratch can become time-consuming and costly. Additionally, developers will need to troubleshoot and work their front-end creations, leading to ongoing costs beyond the initial build.

The costs increase even further when you factor in the fact that the marketing team now depends heavily on the IT team to launch landing pages and content on different devices.

2. Marketing efforts

A pure headless API eCommerce platform offers no front-end presentation layer, so marketers will not be able to:

• Create content in a WYSIWYG editor.
• Preview pages to see how it will look like on the end user’s device or screen.
• Immediately prototype, review, create and publish content without relying on the IT department.

Marketers are dependant on the IT team not just to build the front-end presentation layer, but also to update it and populate it with content.

Not a marketer-friendly environment.

Headless API eCommerce supports omnichannel experiences

The concept of “omnichannel” means that a customer can use the same online platforms to shop both online and offline, on any device, at any time. The main objective of headless API eCommerce platforms is to offer a seamless customer experience across channels, these eCommerce platforms are a fundamental component of the omnichannel retail experience.

Customers who used multiple channels to purchase online buy more than those who only used a single channel. Plus, those customers who used multiple online channels purchased more at the brick-and-mortar stores than those who used only an individual channel.

Other headless eCommerce platforms to evaluate

Headless eCommerce is an emerging space, however, there is a variety of eCommerce platforms offering APIs that facilitate a headless or decoupled approach to eCommerce. Here are three software providers to consider in the space:

1. Shopify Plus

Shopify Plus users have access to APIs which can expose products and selling options information to third-party systems. Still, a CMS will be needed to handle additional content at scale. Company based in the USA.

2. Magento 2

Magento 2 users can leverage Magento APIs to showcase and sell products but will need to rely on a third-party web CMS to handle large quantities of content at scale. Company acquired by Adobe based in the USA.

3. Arcadier

A full headless API eCommerce platform as a service is an all-in-one headless commerce solution that can power omnichannel eCommerce experiences. Customers such as B2B medical suppliers, B2C homemade foods, and C2C service experiences delivered to your home, and many other different business models have used Arcadier Marketplace builder to power their eCommerce digital experiences. Company HQ in Singapur, with offices worldwide, in all major cities London, Australia, Mexico, Las Vegas.

The future of commerce: decoupled

A headless API eCommerce solution resolves many issues (nowadays the emerging technology of wearables and house devices powered with IoT), it also conceives other issues to manage, as discussed earlier.

A decoupled eCommerce platform is similar to a headless system in the sense that both front-end and back-end are decoupled. However, unlike a headless eCommerce, a decoupled eCommerce doesn’t remove the front-end delivery layer from the equation entirely. This architecture gives marketers back their power in the form of content authoring and content previewing, while also giving the brand the same headless freedom needed to deliver content to different devices, applications, and touchpoints through APIs.

You could say a decoupled eCommerce gives you the best of both worlds—and that’s why we foresee the future of eCommerce is decoupled.

A decoupled eCommerce system provides ease-of-use similar to traditional eCommerce software but with the flexibility of a headless system.

It’s the best of both.

Talk to us Book a 15-min call to discuss your project.

Which is the right eCommerce solution for my business?

Finding the right Partner for your E-commerce Business The new trend is to build a Marketplace using SaaS, and extend functionality with a plugins development.

Ecommerce in numbers

In 2019, retail e-commerce marketplace sales worldwide amounted to US$3.46 trillion, and e-retail revenues are projected to grow to a dizzying US$6.54 trillion in 2022 and will continue to drive the future of e-commerce forward. B2B (business-to-business) marketplace sales transactions are set to boom and will account for an estimated 30% of all worldwide online sales by 2024.

Combined, both B2B and B2C (business-to-consumer) marketplaces are expected to grow web sales worldwide to an estimated $7.1 trillion while peer-to-peer marketplaces including eBay and Airbnb will reach $240 billion in combined sales by 2024. However, the area with the fastest-growing global marketplaces will be in B2B.

Currently, only a small percentage of the annual worth of online B2B sales are made via marketplaces however, businesses are starting to realize the benefits of trading with partners via marketplace platforms. In this regard, as more businesses trade online, global sales will continue to grow which will include a wide range of industries and vertical markets.

Should I build around a SaaS?

SaaS, or otherwise known as Software-as-a-Service, is a software distribution model in which a service provider hosts applications via the internet for customers. SaaS falls under the form of cloud computing. Usage is subscription-based charging businesses either monthly, bi-annually, or annually to use the service. These online subscriptions come with their respective technical support and periodic upgrades, SaaS companies deliver usability without bogging down customers with details. You access content through a web browser interface and your content is hosted in either a cloud or shared server. There are a variety of businesses that provide this service for marketplace development such as Arcadier, CS-Cart, Dokan, and Sharetribe.

How can I customize the SaaS?

A plugin is a software add-on that is installed on a program, enhancing its capabilities. It is a form of integration of a separate application to the main platform, either by the platform owners themselves or by other third parties. For instance, you like to add an email marketing tool to your eCommerce business and you are using Shopify or Woocommerce to build your eCommerce, you can utilize the Quickbooks plugin that seamlessly works with your Shopify Store or your book-keeping or LiveChat plugin to create your customer support chat capability. A number of online store platforms offer a plugin that can turn your single merchant shopping cart into a multi-vendor shopping cart experience. Most of these were developed by third-party developers using their respective APIs and Webhooks, and these developers charge a fee for its use.

What option best suits my business model? 

This is the first question that goes through the minds of people who are trying to start their first eCommerce marketplace. Go with a SaaS provider such as Arcadier, CS-Cart, Dokan or Sharetribe, or via a plugin alternative that augments your platform to become a marketplace for online store platforms such as Shopify, Magento, or Woocommerce? It is key to understand the comparisons of their respective software delivery models.

The answer to this question will be dependent on three factors: User preference, costs involved, and feasibility associated with plugin systems.

Using standalone plugins is a great option, but it does have its limitations. For example, the plugin builder will still have to work within the confines of the eCommerce platform to change a user experience that is not natural to the main use case of the eCommerce platform. Dedicated Marketplace SaaS products have been built for the purpose of the marketplace experience in mind, so the user experience is designed from the ground up for a multi-vendor experience.

Build a team for your eCommerce business

Marketplace SaaS solutions are not significantly more expensive than what most plugin developers are charging for the download and use of their plugin. However, the risk of failure that the augmentation using a plug-in to a platform not developed to be a marketplace makes a dedicated marketplace SaaS solution a safer bet. The features provided by SaaS also enable businesses to efficiently create their own marketplace because a lot of the heavy lifting is already done for you, plug-and-play extensions, themes for your front-end, site optimization, dedicated support, analytics, and bug fixes are such examples.

The SaaS option is built-for-purpose but that does not necessarily mean the plugin alternative option should be ruled out, it is still a good option for building a marketplace, however, there lies the problem that all the plugin components on your platform of choice may not necessarily be able to properly shake hands with each other especially on more mature platforms.

Build fast and iterate 

SaaS vs Open-Source eCommerce solutions has their similarities, benefits, differences, and challenges. Both have their own niche market and success stories. A lot of people have built excellent marketplaces around both solutions.

The main factors to consider when choosing an eCommerce solution are budget, technical proficiency, and knowledge, and how serious are your plans to scale your business.

The more niche or more mature your marketplace is, the more customization will require.