Why Businesses Are Shifting Away From Custom Ecommerce Platforms

A decade ago, building a custom ecommerce platform was a smart, forward-thinking investment. In the years that followed, the conditions in the ecommerce platform market changed—as have the needs of most ecommerce businesses. 

But back then, many big brands—especially ones with unique business requirements—couldn’t find a good platform solution that addressed all of their needs. There were options, but they all lacked in one respect or another, and most brands couldn’t wait for those vendors to develop features that would suit them.

Business leaders were stuck with two options: Buy one of those lacking options and customize it, or build a fully customized platform from the ground up. 

Many businesses went with the second option, and it worked out—but only for a time. Eventually, the control a custom ecommerce platform offered became a disadvantage as businesses had to continuously iterate on their platform to meet rapidly evolving consumer desires, regulatory requirements, and features from competitors. 

At this point, many brands have reached a new junction that parallels the one from a decade ago: When do the disadvantages of a custom ecommerce platform make it necessary to reevaluate third-party options?

Three challenges of custom ecommerce platforms

Software projects inevitably get more expensive over time, requiring tweaks, rewrites, and eventually complete refactorings. 

Early on, iterating on a checkout page, for example, might have seemed easy. But now that consumers expect a range of payment options and an incredibly fast experience, improving that same page from within the confines of a custom (and now legacy) ecommerce platform could take months of engineering work. 

A custom ecommerce platform might have been a great choice at one point in time, but as maintenance costs rise and developer time is stretched thinner, formerly small challenges can swell in severity. 

1. Maintenance costs

Ideally, developers spend as much time as possible building new revenue-generating features. Of course, this isn’t an ideal world, and many businesses need to reallocate developer resources from building new features to maintaining old features. 

According to research from Tidelift and The New Stack, “Developers spend more time maintaining, testing, and securing existing code than they do writing or improving code.” 

Unfortunately, this pattern tends to worsen when developers have to maintain heavy-duty custom platforms. 

Dollar Shave Club, for example, was spending 40% of its entire technology budget on platform maintenance when it was maintaining a custom platform. “Sometimes, there’s a misconception that building something in-house means it’s free in the long run,” says Kyle Iwamoto, VP of ecommerce at Dollar Shave Club. “But developing it diverts resources from other important projects, and maintaining it isn’t free either.”

This is why maintenance costs always need to be compared against opportunity costs—in other words, while the maintenance work itself is costly, the costs of not working on other projects might be more consequential. 

As Kyle says, “With that 40%, we thought to ourselves, what else could we unlock? What else could we do with that 40% instead of simply maintaining our platform? What else could we build? What else could we leverage? How could we drive more results in those primary KPIs?”

Opportunity costs are harder to track than maintenance costs, but the true costs of a custom platform require some measurement of both. Ultimately, resources are scarce—what are you losing by spending time, money, and effort on maintenance?

2. Complexity issues

No one sets out to build an overly complex system. Complexity is an emergent property of maintaining projects over long periods of time, and until business leaders step back and take a critical look, they might not realize how complex their operations have become. 

Over time, each “small tweak” adds up to a lot of custom code, and formerly simple systems can become overly complicated. The issue, beyond the increased maintenance costs cited above, is that complex systems are inherently hazardous. 

As systems engineer Richard Cook writes, “The potential for catastrophic outcome is a hallmark of complex systems. It is impossible to eliminate the potential for such catastrophic failure; the potential for such failure is always present by the system’s own nature.”

As with maintenance, complexity can require reallocating engineering resources from innovation work to fixing problems caused by complicated systems. Daily Harvest, for example, frequently encountered this issue.

“[There were a lot of] complexities by being a legacy, homegrown site,” says YuJin Yong, VP of digital at Daily Harvest. “Our engineers had to either fix things they built themselves or engage with a third-party provider.”

All of this complexity and maintenance can also become a morale drag on developers. Attrition is a risk all companies face, but the more complex your systems are, the worse the costs of attrition will be. A developer with unique institutional knowledge who leaves the company is a big loss, and replacing them can be costly. 

3. Security risks and regulatory requirements

In 2022, the FBI’s Cyber Division issued an urgent warning to all US businesses: Malicious attackers were unlawfully scraping credit card data by injecting PHP code into online checkout pages and sending the stolen data to a server that posed as a legitimate card-processing service. 

Only some businesses were affected directly—but all businesses were affected indirectly, in that they all had to very quickly make sure their checkout features could prevent this kind of attack. Custom platforms make this work more difficult because the increased complexity mentioned above makes it harder to ensure that vulnerabilities don’t exist. 

If development resources are stretched too thin, developers may have to choose between updating new security patches or rolling out a new feature sooner.

A similar pattern has been repeated with regulatory requirements. In the past decade, regulations have changed significantly—GDPR, for example, only went into effect in 2018. Companies with custom ecommerce platforms will have a harder time keeping up, and their developers are increasingly stuck checking for compliance issues instead of working on new projects. 

Are there benefits to custom ecommerce platforms?

The challenges above are significant, but that doesn’t mean there aren’t benefits to custom ecommerce platforms. 

That said, the benefits of a choice made a decade ago might have changed. If the benefits have weakened and the disadvantages have strengthened, businesses might still want to consider moving off a custom platform. 

Complete customization

The primary reason most businesses chose to build a custom ecommerce platform a decade ago remains the same today: Complete customization. 

A custom platform by definition offers unparalleled flexibility, and allows businesses to tailor functionality and user experience to their precise needs. A third-party platform, also by definition, won’t have been built with one business’s needs as its first principles. 

Over time, however, third-party platforms have evolved, and truly unique customization needs have become rarer. Furthermore, in many cases third-party platforms offer customization and extensibility options that give businesses the best of both worlds. 

Differentiation 

A decade ago, many businesses chose to build custom ecommerce platforms so that they could get ahead of the competition. The theory was that a custom platform would allow businesses to differentiate in a crowded market. 

For a while, this choice likely paid off. Third-party platforms have to please many different kinds of businesses, so an urgent feature request from one business might have been a low priority for the third-party platform as a whole. 

There are likely a few businesses with extremely unique requirements for which this benefit remains. For most use cases, however, third-party platforms have either kept up with custom platforms or far exceeded them. 

Control

Businesses naturally want control over important parts of their operations. A custom ecommerce platform offers businesses complete control over their hosting environment, data management, and security protocols. For businesses with specific protocols or data sovereignty requirements, this level of control can be especially enticing. 

Control, however, is a double-edged sword. Unfettered flexibility also means businesses have to worry about maintenance and security. 

Meanwhile, third-party platforms have evolved, and the decision criteria for many businesses have changed. If more third-party platforms can offer benefits that rival the benefits of custom platforms, then the advantage of not having to worry about (and control) all the ongoing costs associated with maintaining a unique platform can change the decision. 

Five advantages of out-of-the-box solutions

Out-of-the-box solutions have evolved dramatically over the past decade, such that now even the biggest enterprises with the most complex requirements can often rely on third-party platforms. 

1. Reduced maintenance

In the past, building a custom ecommerce platform was the only way to get the kind of development flexibility you needed to evolve and iterate over time. A tradeoff with this level of flexibility is maintenance—the more unique and complex your platform, the more upkeep it needs. 

Over time, third-party platforms built more features and built in more flexibility, making that old tradeoff less worthwhile. Meanwhile, instead of treating security and compliance as a foregone conclusion, companies with custom ecommerce platforms are still stuck handling that tedious work themselves. This gets even worse with technical debt, forcing businesses to reassign developers from revenue-generating work to clean-up and maintenance work. 

With third-party platforms like Shopify, companies can do little to no maintenance and focus all their efforts on growth and experimentation. 

2. Faster time to market

The maintenance issues mentioned above become most salient when a company wants to launch a new feature. Custom ecommerce platforms frequently slow companies down or impose technical limitations that make ambitious product roadmaps hard to execute.

With a third-party platform that takes care of maintenance and frees companies up to pursue feature development, companies can integrate a new app or build new functionality as fast as they need to, allowing them to better adapt to market changes.

3. Cost-effectiveness

In the past, third-party platforms felt like a bad deal. Companies would have to pay the vendor even though a custom solution would have paid off better over time. 

Nowadays, that logic has flipped. Good third-party platforms offer predictable pricing and require smaller development teams to maintain. Companies can leverage third-party platforms to get extensive functionality while staying small and nimble with their internal teams. 

Shopify, for example, as compared to competitors, offers:

• 33% better total cost of ownership (TCO).
• 23% better platform costs.
• 19% better operation and maintenance costs.

As a result, the TCO of the right platform is often the most cost-effective option available. 

4. Runway for innovation

By reducing maintenance and relying on predictable prices, companies can build a much longer runway for innovation by working with third-party platforms. These platforms take care of the technical foundation, allowing companies to focus all their resources on enhancing the customer experience. 

Companies still developing custom platforms often have to leave their developers focused on KTLO (keeping the lights on) level work, which means developers are stuck with a backlog of requests, and business leaders are stuck in a holding pattern waiting for developers to have some free time to help grow the business.

5. Integrations

In the past, third-party platforms frequently came with a limited number of integrations, meaning that companies that needed an unavailable integration would just have to look elsewhere. Today, most third-party platforms offer extensive integrations. And even if an integration isn’t already available, platforms like Shopify make it easy to build new integrations.

Is Shopify a custom ecommerce platform?

Shopify isn't a blank slate, but it’s composable by default. 

Companies can build their tech stacks however they want with Shopify's suite of best-in-class commerce capabilities or swap in their preferred third-party systems with Shopify’s proven integrations, which work with all major front and back-end systems. 

If companies want to build a custom storefront, Shopify also offers a headless toolkit, which includes Hydrogen and Oxygen, that gives them the clearest path for building reliable and performant custom sites.

• Flexibility: Shopify offers an extensive app ecosystem and a wealth of APIs that developers can use to add custom functionalities. Arhaus, for example, reduced development time while giving developers the time and space to unify their commerce experiences.
• Scalability and reliability: Shopify provides a scalable and reliable infrastructure even during high-traffic events—not something most ecommerce platforms, especially those hosted on premises, can match. Staples, for example, encountered no performance issues as “Black Friday-like” sales levels persisted for 30 days straight.
• Security and compliance: Shopify complies with a wide range of security standards, such as PCI DSS, and provides a robust set of security measures. Anker, for example, achieved a 90% website payment success rate while making its ‘Buy Now’ process smoother and more secure.

Third-party platforms are often better considered potential partners rather than simply vendors. As Arhaus, Staples, and Anker show, sharing the load with a trusted party and third-party platform can really pay off—even in use cases once thought to be ideal for custom solutions. 

Decision-making factors for building a custom ecommerce platform

Deciding whether to build a custom ecommerce platform or adopt a third-party platform comes down to three basic questions:

• What are your business needs? If your business needs are truly unique, a custom platform might be the best choice—but companies should still evaluate the difficulty of adding new features to an extensible platform versus the difficulty of building a custom platform from scratch. 
• What are your long-term strategic goals? The choice to build a custom ecommerce platform—especially given how long it takes to build one and how much upfront money it costs—is a long-term strategy. Companies choosing to build one will have to be confident enough that they can meet or exceed the scalability and responsiveness levels of third-party platforms over a long period of time.
• What ongoing costs and opportunity costs are you willing to take on? Companies can’t just compare the estimated cost of building a custom platform versus the monthly cost of adopting one. Custom platforms will require ongoing, often unpredictable maintenance, and each time companies have to dedicate resources to maintenance, they’ll miss the opportunity to stay focused on innovation. 

Each of these questions and the cascade of follow-up questions that emerge from them must be considered carefully. The nature of long-term decisions like this means that small costs can accumulate into big ones, and limitations that turn out to be larger than anticipated can drastically slow down growth. 

Finding the right balance

Companies often try to build custom ecommerce platforms based on the well-intentioned belief that a unique business needs a unique platform. 

Think of it like building a home: Your home can be unique without requiring you to build everything from scratch. It’s easier and more effective to buy materials from the right suppliers and work with the builders to put it all together. The unique aspects of your home will be relatively marginal compared to the common aspects of your home (the walls, the heating, the electrical system), so it’s better, in the end, not to assume everything needs to be built by you and by hand. 

Ecommerce platforms are similar: Custom ecommerce platforms offer a lot of control, but that control comes with a lot of work. Out-of-the-box solutions like Shopify provide a better balance by giving companies flexibility, efficiency, and a robust feature set. Even better, Shopify offers the extensibility companies need to add those last details and turn a house into a home.