What is a Commerce Platform? The Complete Guide

Updated Apr 17, 2023.
What is a Commerce Platform

According to eCommerce statistics, online shopping will account for 95% of global retail sales by 2040. Many store owners are finding ways to sell online to increase their business revenue.

But does this mean that every brick-and-mortar retail store should abandon their physical shops and switch to an eCommerce-only business model? Absolutely not. While setting up an online store can boost your business, you can run both an in-store and online shop seamlessly.

With a commerce platform, business owners can synchronize their online and offline channels and data in real time.

Now to the big questions, how does a commerce platform work, and how do you unlock its benefits for your business?

What is a Commerce Platform?

As a multi-channel retailer selling in-store and online, keeping records of every aspect of your business can be challenging. Many businesses use eCommerce solutions to track online sales and point-of-sale (POS) systems to track in-store sales.

Instead of using different solutions for your online business and physical store, why not use a single platform to connect both channels?

The commerce platform is the technology that manages every aspect of your business (online and offline). With this platform, you can access data from your multiple channels in one dashboard.

As a business owner, gathering and analyzing your customers’ data is crucial for success. Use this data to properly nurture customers, track inventory levels, know what’s working and what’s not, where to invest resources, and your bestselling and underperforming products.

A commerce platform is more than a technology that tracks sales across your channels. You can use it to receive online payments, offer customer support, and nurture relationships with vendors, employees, and customers. Business owners can request products from vendors and track their orders from the platform.

Customers can interact with your business on any channel. With this platform, you can track customers’ movement across your offline and online channels.

Core Components of Commerce Platforms

An eCommerce platform helps store owners easily manage their day-to-day business operations. Although not every commerce platform is the same, the core components do not change.

1. Point-of-Sale (POS) System. Connect Your Offline Channels.

A point-of-sale (POS) system is the hardware, software application, and payment processing services that businesses use to process and accept payments from customers. Businesses use this system to manage customer purchases, track sales, and store inventory information.

Depending on your business model, the POS system setup may vary. For example, a physical storefront’s POS system is the device you use to process customers’ transactions, such as cash registers.

An online storefront’s POS system is the software application you use to process payments from customers. POS software like NetSuite SuiteCommerce and Lightspeed Retail fall under this category.

Modern POS systems help you process credit and debit card payments, generate reports and receipts, manage inventory, and track employee hours and activities. They integrate with your business tools, including accounting software, eCommerce platforms, and analytics tools.

Today, whether you are running a physical storefront, eCommerce store, or both, use cloud-based POS solutions. Here’s why. Cloud-based POS allows you to track your business and sales data from any location with a POS app and an internet-enabled device.

2. eCommerce Platform. Connect Your Online Channels.

Many people mistake the eCommerce platform as the same as the commerce platform. While an eCommerce platform enables buying and selling of products and services over the internet, a commerce platform covers online and offline sales.

An eCommerce platform helps manage your web hosting, marketing, order fulfillment, inventory management, payment processing, and the other components needed to sell online.

For example, clothing retailers can use an eCommerce platform to host their online stores, receive and process orders, and accept payments from interested buyers.

Although eCommerce platforms cover everything you need to run an online store successfully, they don't track offline sales.

Imagine using different business solutions to track online and offline sales. That means more work and cost. You need to manually track inventory levels across channels to avoid selling products that you don’t have in stock.

If you run online and offline sales channels, the better option is to use a more unified system, the commerce platform. Remember, the eCommerce platform is a key component of the commerce platform.

Types of eCommerce Platforms

The best eCommerce platform for your online business is one that provides the essential eCommerce features for it.

There are three main types of eCommerce platforms.

  • Open-Source eCommerce Platforms: These are platforms where users can modify and customize their original source codes. Users enjoy the flexibility to create custom integrations faster than on other platforms. An example of an open-source eCommerce platform is PrestaShop. The best part? It’s a free platform.
  • SaaS eCommerce Platforms: They involve users renting eCommerce software packages from a SaaS provider. An example of a SaaS eCommerce platform is Shopify.
  • Headless eCommerce Platforms: These are adaptive eCommerce platforms that separate the front end of an eCommerce website from the back end. You can use this flexible architecture to build a seamless user experience beyond the basic eCommerce functionality. An example of a headless eCommerce platform is Adobe Commerce.

Advantages of eCommerce Platforms

There are many benefits you gain from using an eCommerce platform.

  • Access to a Larger Customer Base: This platform helps you reach more potential customers globally. With many people shopping online, it’s wise to expand your business by building an online store.
  • Shopping Convenience: The limitations of traditional shopping, like transportation costs and limited opening hours, don’t affect an online shopper. You can easily order and have your goods delivered to your doorstep from your mobile phone.
  • Increased Brand Visibility: There’s a limit to how much reach you can have with a physical location. With an online presence, you can reach more customers and have them easily find you.

Disadvantages of eCommerce Platforms

Although using an eCommerce platform is lucrative for those that want to set up an online business, it has its disadvantages.

  • Highly Competitive Marketplace: eCommerce is lucrative and easier to start and scale compared to physical shops. But, you will face a massive number of competitors on any product or service you want to sell.
  • Unforseen Costs: Using an eCommerce platform can be expensive, especially when you are offering free shipping and delivery to attract more sales. You can reduce your costs and business risks with the connective eCommerce model. However, there’s a limit to how big you can grow your online business with this approach.
  • Difficulty Handling Inventory and Managing Orders: An eCommerce platform can help you manage your orders and inventory. However, when the orders are coming from multiple channels, especially offline, it can be a tough task.

3. Supplier Marketplace. Connects Businesses to Suppliers.

A commerce platform connects every part of your business activities, so you don’t need to leave the platform for any function. Businesses can use the supplier marketplace to order products and manage purchases from vendors and suppliers.

Retailers are not the only beneficiaries of the supplier marketplace. B2B wholesalers, vendors, and suppliers can use it to track purchase orders in one dashboard.

4. Payment Processing. Connects Business Payments.

Payment processing is a key component of a commerce platform that allows businesses to track payment data across multiple channels.

Every commerce platform uses an integrated payment processing system to track payments across channels. This approach is better than manually inputting payment records, which can be time-consuming and prone to human mistakes.

You can integrate the best merchant services and credit card payment processing companies like Merchant One and Square Payments into your commerce platform.

Types of Commerce Platforms

There are different commerce platform solutions for different business types. If you are a retailer, the retail commerce platform is best for your business needs.

On the other hand, if you are into the hospitality business, such as owning restaurants and hotels, find a hospitality commerce platform provider. Why? The platform has eCommerce functionality and features tailored to a hospitality business.

You can divide commerce platforms into three broad types:

  • Software-as-a-Service (SaaS) Platforms: They are commerce platforms that deliver solutions online through third-party hosting providers on the cloud.
  • Platform-as-a-Service (PaaS) Platforms: They are similar to SaaS platforms because they offer solutions primarily online. Here’s the difference. The PaaS commerce platform allows users to customize the application for their unique purposes.
  • On-Premise Platforms: Companies use their own solutions to manage everything about their commerce business. Apart from cloud hosting, which they rent from top cloud hosting providers like Amazon Web Services (AWS), they build their own solutions. This platform is suitable for large online stores.

What Are The Benefits Of A Retail Commerce Platform?

The primary benefit of using a retail commerce platform over a general one is the retail orientation.

If you run a retail business, this platform provides solutions for your day-to-day realities that include inventory management, eCommerce, and omnichannel customer features.

Three different stakeholders benefit from using a retail commerce platform. They are the shoppers, retailers, suppliers, and vendors.

Benefits of a Retail Commerce Platform for Shoppers

Using a retail commerce platform is beneficial to shoppers as it is to retailers. Whether you shop online or offline, a retail commerce platform provides a consistent and frictionless user experience.

  • Shopping Convenience: Customers love to move between channels and locations. The more channels and locations you offer to your target audience, the easier it is to attract sales. With a retail commerce platform, retailers can offer seamless omnichannel support for shoppers.
  • Supports Multiple Payment Options: A key component of retail commerce platforms is payment processing services. Thanks to integrated payment across channels, shoppers get to use any supported payment option and currency to buy products.

Benefits of a Retail Commerce Platform for Retailers

The primary beneficiaries of the retail commerce platform are retailers. So, what are the benefits?

  • Supports Multiple Saless Channels: A retail commerce platform makes it easier for retailers to manage their business operations across channels and locations. For example, a retailer can connect with suppliers, order new stock, and manage different product orders for its stores from the commerce platform.
  • Offers Flexible and Adaptable Solutions: The best thing about using a retail commerce platform is how it quickly adapts to changes in customer shopping behaviors and eCommerce trends. For example, you can easily add a new channel like TikTok Shopping without having to integrate a new eCommerce solution.
  • Shows a Complete Picture of Business Operations: A retail commerce platform offers a comprehensive and real-time picture of your business activities. Retailers use this platform to generate sales reports and track inventory and employee performance. You can use this data to improve your business processes.

Benefits of a Retail Commerce Platform for Suppliers and Vendors

Suppliers and vendors are the third class of stakeholders that benefit from a well-oiled retail commerce platform.

Here are the benefits.

  • Connects Suppliers with Vendors: Every retail commerce platform has a supplier marketplace that helps retailers easily connect with B2B wholesale suppliers. The platform supports automatic catalog updates and helps suppliers better manage orders from retailers.
  • Benefits from the Commerce Platform Data: Suppliers need data from the commerce platform to increase their productivity. While they can easily track orders, they don’t know how well the products supplied performed in the consumer marketplace. A retail commerce platform gives suppliers more supply chain data to accurately track their products’ performance.

Choosing the best eCommerce software is a no-brainer if you want to achieve sustained online business growth and success. Even if you are starting an eCommerce business from scratch, you can’t just pick any option that pops up on a 1-second Google search.

When choosing an eCommerce platform, check for the following features:

  • Inventory management functions.
  • Email marketing tools.
  • Customizable templates for your eCommerce store.
  • Multiple payment options and currencies.
  • Drag-and-drop page builder.
  • Shopping cart customization.
  • Search Engine Optimization (SEO) features.

We reviewed five of the best eCommerce platforms to help you make an informed decision for your online business.

1. Squarespace

Best Overall for All Business Sizes

Squarespace-Everything to sell anything

Squarespace is one of the most popular eCommerce platforms that helps you design beautiful online stores that are optimized for desktop and mobile devices.

The platform is simple to use and offers eCommerce functionality for businesses of all sizes with its professionally-looking and customizable templates and convenient marketing tools.

Best Features

Inventory Management System

Squarespace integrates with third-party eCommerce platforms to help users better track their inventory. You get an email notification when any of your products is almost out of stock.

Order Management System

This eCommerce platform tracks customer orders and automatically processes them. You can set Squarespace to automatically offer discounts or free shipping on large orders.

Convenient Social Media Marketing Tools

With Square’s Unfold and Video Studio apps, you can easily sell your products on different social media channels. These apps can edit images, create reels, customize templates, and schedule social media posts.

Built-In SEO Features

Use Squarespace’s powerful built-in search engine optimization tools to rank your eCommerce website high on Google’s Search Engine Result Page (SERP). This platform generates meta tags for your product pages and converts image descriptions to alt tags.

Sales Analytics

Squarespace collects and analyzes your online store’s data and provides you with detailed insights into your business’ performance. With analytics, you can spot areas that need improvement to boost your marketing campaigns and increase sales.

Pros

  • 24/7 personalized customer support.
  • Complete customization with CSS and JavaScript.
  • Free WHOIS privacy.
  • Permits data import and exports.

Cons

  • No free version.
  • Limited customization options.

2. Wix

Best for Small Businesses

Wix- Sell everywhere with Wix eCommerce

Wix started out in 2006 as another website builder with drag-and-drop functionality. Today, it is one of the best eCommerce platforms for small businesses.

This platform is an all-in-one eCommerce solution that enables businesses to sell online. Thanks to Wix’s integration with multiple third-party apps, you can sell physical and digital products and services.

Best Features

Inventory Management Tools

Wix tracks and manages your inventory levels to ensure you don’t run out of stock. You can also add up to 50,000 products to your eCommerce store.

Multi-channel Selling & Integrations

This platform helps you sell on multiple marketplaces such as eBay, Wish, Amazon, Instagram, and Facebook. You can connect your online store to your Enterprise Resource Planning (ERP) system and tools like Google Analytics, Google Ads, and Facebook Pixel,

Built-In Customer Relationship Management (CRM) Tool

With Wix eCommerce, you don’t have to use a third-party CRM because Wix has a native CRM. This CRM tool helps capture and nurture leads to improve conversions.

eCommerce Analytics and Reports

Wix Analytics provides detailed insights into your online store’s data. This tool tracks how shoppers interact with your store to help you make data-driven decisions to improve your site’s performance. You can create customizable reports and share them with other stakeholders.

Multiple Payment Options

Wix eCommerce allows users to offer multiple payment options to customers to boost in-cart conversions. Payment options include leading payment gateways like Stripe, PayPal, and offline payments. This platform supports selling to an international audience in their local currencies.

Pros

  • Translate your online store into 180+ languages.
  • User-friendly eCommerce platform.
  • 500+ eCommerce templates.
  • Free social media management tool and logo maker.

Cons

  • Wix templates are not fully customizable.
  • Storage space is limited on all plans.

3. Shopify

Best for Beginners

Shopify-The Global eommere platform

Shopify is one of the best eCommerce platforms for startups. Design your online store, launch it, and take advantage of Shopify’s extensive network of business partners to scale and sell to a global audience. This platform hosts millions of online stores in 175 countries.

Best Features

Omnichannel Selling

Shopify allows users to sell on different marketplaces like Facebook and Instagram and manage their online business activities from their dashboards. Customers can successfully make purchases on any channel without visiting your online store.

Email Marketing Tools

Users have access to a wealth of professionally-looking email templates to create high-converting email marketing campaigns. Subscribers get emails that come with Shopify’s special checkout buttons to make it easy for them to buy your products from their inbox.

Multiple Payment Gateways

With the built-in Shopify Payments, you avoid paying transaction fees associated with other payment gateways. Shopify integrates with over 100+ payment gateways like PayPal, Stripe, 2Checkout, Zip Pay, and credit card providers like Visa, Mastercard, Discover, and American Express.

Shopify POS (Point-of-Sale)

This feature is a beautiful addition for users that sell in physical stores. With Shopify POS, you can manage your customers, inventory, and sales from your physical store and integrate real-time data into your Shopify dashboard.

Seamless Integrations

There are over 6,000+ apps on the Shopify App Store that help you grow and scale your online business. You can connect your store to your everyday business tools like Google and Facebook.

Pros

  • 24/7 customer support by phone, chat, and email.
  • 100+ online payment gateways.
  • Native email marketing app.
  • Conversion-optimized themes.
  • Accelerated checkout.

Cons

  • High transaction fees for third-party payment gateways.
  • Very few free themes.

4. BigCommerce

Best Headless eCommerce Platform

BigCommerce-Ecommerce for a new era

BigCommerce is the go-to eCommerce platform for large online businesses and startups with massive growth potential that want to open multiple storefronts. Users can manage local and international sales across physical and online storefronts from a single control panel.

BigCommerce’s features are flexible and scalable and cover the needs of any business size. Users enjoy rich eCommerce features like single-page checkouts, cart abandonment tools, and Point-of-Sale (POS) functionality.

Best Features

B2B eCommerce

BigCommerce is more than a platform for Business-to-Customer (B2C) eCommerce websites. It supports the different eCommerce models, including Business-to-Business (B2B) eCommerce, which involves selling products and services to other businesses.

Powerful Omni-channel Selling

Users can sell online on 60+ commerce channels globally, such as Google Shopping, eBay, Amazon, Etsy, Walmart, Facebook, and Amazon. You get inventory management features to help you track your products in real time across multiple channels.

Access to International Markets

If you own an eCommerce startup and want to scale quickly into the international market, BigCommerce has the solutions for you. The platform supports 100+ currencies, fast delivery through local carriers, and customized checkout prices.

Headless Commerce Feature

BigCommerce is one of the best headless eCommerce platforms that allows users to freely customize their commerce backend. With this headless commerce feature, you can create a personalized customer experience.

SEO Tools

This platform has a powerful eCommerce content management system with SEO tools for better online exposure on search engines like Google.

Pros

  • No additional transaction fees with any payment provider.
  • 24/7 customer and technical support via phone.
  • Great for retailers with multiple product variations.
  • You can sell your products on 60+ sales channels.
  • Technical support from experts to help with migration.

Cons

  • Requires a steep learning curve.
  • Expensive pricing.
  • Annual sales limit on all plans.

5. WooCommerce

Best for WordPress Users

WooCommerce-Build exactly the ecommerce website you want

WooCommerce is a free, open-source, and highly-customizable eCommerce plugin that supports online shopping activities on WordPress's content management system. This platform is ideal for small to large-scale business owners that use WordPress.

Interestingly, although WooCommerce works only for WordPress sites, it is the most popular eCommerce platform by market share.

You can start WooCommerce for free and manage multiple online stores from the same dashboard. Enjoy features such as secure payment, custom shipping options, and powerful integrations.

Best Features

Drag-and-Drop Website Builder

WooCommerce’s drag-and-drop website builder helps users create professional-looking online stores. With this platform, you can customize your store layouts and fonts, shopping cart, and checkout pages and add relevant product information that increases conversions.

SEO and Email Marketing Features

This platform offers you multiple ways to promote your eCommerce store. With WooCommerce’s SEO tools, you can boost the organic reach of your blog posts and landing pages. WooCommerce integrates with the best email marketing services to boost your marketing activities and campaign results.

Multi-Channel Selling

You can sell your physical and digital products and services on popular marketplaces like eBay, Amazon, and Google. WooCommerce makes it possible to connect your online store and sell directly on social media platforms like Instagram and Facebook.

Flexible and Secure Payments

This platform has a built-in payment solution called  WooCommerce Payments that collects payments in 135+ currencies. It integrates with leading payment gateways like Amazon Pay, Stripe, and PayPal. WooCommerce supports credit cards, bank transfers, and cash payments.

Scalability

The key attraction of this eCommerce plugin for WordPress sites is how easy it makes scaling your online business. You can pick the eCommerce features you need and save costs, and connect your essential business apps to your store.

Built-in Blogging Feature

WooCommerce integrates seamlessly with WordPress’ Content Management System (CMS) to help users easily create, publish, and share their content online. Through blogging, you can nurture your site’s visitors and readers into paying customers.

Pros

  • Open-source and free platform to install.
  • Slack community of 1,000+ WooCommerce developers.
  • Complete customization capabilities.
  • No additional transaction fees with any leading payment gateway.
  • Mobile apps for iOS and Android.

Cons

  • No customer support via phone.
  • It only works on WordPress sites.
  • It requires add-ons that can be expensive.

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Martin Luenendonk

Editor at FounderJar

Martin loves entrepreneurship and has helped dozens of entrepreneurs by validating the business idea, finding scalable customer acquisition channels, and building a data-driven organization. During his time working in investment banking, tech startups, and industry-leading companies he gained extensive knowledge in using different software tools to optimize business processes.

This insights and his love for researching SaaS products enables him to provide in-depth, fact-based software reviews to enable software buyers make better decisions.