Comparing Shopping Cart Platforms & Market Analysis

Miva Merchant was originally launched in 1997 as a distributed software platform, long before the concept of SaaS (Software-as-a-Service) existed. Back then, Miva Merchant was a fairly simple (although ahead of its time) catalog management system for putting products into a catalog and facilitating a checkout.

Today, Miva Merchant encompasses what used to be multiple separate paid third-party products:

• Order Processing Systems
• Fulfillment Systems
• Multi-Channel Marketplace Management
• Customer Relationship Management

In 2009, the Miva Merchant SaaS model was launched, replacing the legacy distributed software model that dated back to 1997. SaaS has since gone from being a new way to sell and distribute software to the de facto standard in software delivery today.

Since launching this SaaS model, Miva has invested far more into building out our core platform than at any point in Miva's history, all while the costs to operate our business have increased. And yet even as our platform has evolved and changed significantly, we have not changed the base pricing for our product.

Some of our customers have been with us 10, 15, even 18 years, and remember a time where Miva Merchant was provided for 'free' as part of a hosting plan. When considering this legacy model, it's understandable how many of our long time customers can find it challenging to understand why we're changing our pricing – and even our reasoning behind it.

In actuality, direct hosting costs comprise less than 5% of the total cost to operate our business, which is why charging for Disk, Bandwidth, Servers, etc., does not accurately compensate for what is largely a product of intellectual property.

Product development, network management (uptime) and support, on the other hand, comprise roughly 60% of the cost of running our business – yet under the old hosting pricing models we're essentially not charging for those items.

Thus, we've need a different method to charge for our intellectual property.

Here are the 5 models we've considered:

1. Significantly raising the licensing fees for our software, a la Magento Enterprise (Magento currently charges $22,000 a year just for their software). If we went this route we'd likely retain roughly 1,000 merchants – losing over 10,000 merchants in the process. While we'd theoretically make more money, we didn't feel this path was acceptable.
2. Creating an 'a la carte' model (where every single button you click in our admin would have a fee associated with it). This in theory "directly charges for our Intellectual Property", however the inherent problem with this model (even though some find it attractive) is that bills would become overly complex (and frankly unreadable), and it becomes virtually impossible to sell to new customers since we can't predict usage ahead of time*.
   *Note: This model is how our data center charges us, and as a customer on the receiving end of this model, it's not a good experience.
3. Charging based on page views. We could theoretically offer plans that convert page views into price, which is fairly common in the world of SaaS. However, it also punishes merchants with low margins, those who are recipients of a DDoS attack, get crawled by bots, etc.
4. Charging based on transactions. We could sell buckets of transactions (up to 100 is X price, up to 500 is y price, etc.) However, this punishes people on low margins and low average order values.
5. Charging based on gross revenue. This is our choice right now (while looking closely at it and making adjustments where necessary). We're aware that at some level this punishes people with large average order values and relatively few orders, but solves the other end of the equation. *
   *It's important to note here that we're reviewing specific sites when requested and offering reasonable solutions when unique cases present themselves.

 

Coincidentally, this pricing adjustment also brings us in line with our competitors, who in all but a few cases offer ecommerce solutions capable of far less than what is available on Miva.

Entry-level competitors on the low end like Shopify and Bigcommerce charge $80+ a month for far less functionality than comes standard out-of-the-box with Miva.

Shopify and Bigcommerce also charge $1,000 to $3,000+ a month for "Enterprise" offerings unable to legitimately function at the level of a true Enterprise solution.

We've conducted a technical analysis of both Shopify and Bigcommerce and can show you very clearly how Miva is orders of magnitude more capable and more affordable than these "low end" platforms:

Miva Merchant vs. Shopify
Miva Merchant vs. BigCommerce

The only direct Enterprise equivalent to Miva Merchant Enterprise is Magento Enterprise. A Magento Enterprise license alone (without hosting) carries a price tag of $22,000 a year, with hosting costs often exceeding $60,000 a year.

We've also conducted a technical analysis comparing Miva Merchant and Miva Merchant Enterprise to Magento Community and Magento Enterprise which clearly demonstrates that Miva Merchant is both more capable and more affordable to operate than both of them, including the "free" Magento Community edition.

Miva Merchant vs. Magento Community
Miva Merchant Enterprise vs. Magento Enterprise

To recap, we've expanded the capabilities of our core Miva Merchant platform considerable since its advent in 1997. Today, Miva Merchant stores not only deliver the most sophisticated and streamlined online shopping experiences available, they also support sophisticated back-end ecommerce workflows (fulfillment, CRM, etc.). And as our platform evolves, it has become glaringly apparent that the value our customers derive from using Miva Merchant is not reflected in our old model of charging for Disk and Bandwidth. Hosting has become a commodity, while Miva's cost of building and maintaining our ecommerce platform has skyrocketed (programmers, network engineers, etc.). As such, we've adjusted our pricing to solve this long term structural problem, all while being fair and flexible should the need arise.