How retailers ruin their onlineshop system calculations

Most selection processes for shop systems suffer from a shortened horizon. Retailers compare one-off license and implementation costs, but systematically ignore the expenses that become decisive over the life cycle of three to five years. Shopmacher have developed a TCO calculator to help online retailers calculate the actual costs.

Three shop systems, three price tags: 40,000 euros, 90,000 euros or 150,000 euros license plus implementation. For many online retailers who are about to change shop systems, the decision seems clear: those who opt for the cheapest option will save six-figure sums.

But what often seems like a no-brainer at first glance is often the most expensive of all decisions, says Sabine Götz, Lead Consultant at SHOPMACHER, which supports online retailers in optimizing their tech stack. This is because in order to determine the actual costs, retailers must take into account not only one-off license and implementation costs, but also the expenses that become decisive over the life cycle of three to five years.

Cheap to get started, expensive for everyday use

This includes, for example, the integration effort involved in connecting ERP, PIM, CRM, payment or logistics systems. Added to this are the so-called technical debts that arise when updates are complicated or only carried out infrequently. Operation and infrastructure – from hosting and security to monitoring – are also often underestimated. Another question is that of scaling: what happens if the business grows faster than planned? And finally, support and downtime also play a role: even short outages at peak times can lead to considerable costs.

Cloud vs. on-premise: the paradox of the “cheap” license

The error in thinking becomes particularly clear when comparing traditional on-premise solutions with cloud offerings. On paper, on-premise appears cheaper at first. However, the supposed savings melt away over the years: every major version upgrade requires expensive and time-consuming relaunches, while cloud systems are updated continuously and without interrupting operations. On-premise systems also have to be large from the outset – expensive, inflexible and often exceeding actual requirements. Cloud solutions, on the other hand, grow with the business. And last but not least, on-premise systems lag behind when it comes to the pace of innovation: new features reach the cloud immediately, while traditional systems often take years – a massive opportunity cost risk.

“The price tag triggers the savings reflex,” says Sabine Götz. “But to really find the most cost-effective solution for each individual, you need to take a holistic view.”

Strategic inflexibility with excessive budgets

A lack of TCO considerations not only leads to budget overruns, but also blocks the strategic agility of retailers. Those who fail to factor in integration and scaling costs will find that expansion takes longer and becomes more expensive when entering new markets. Those who underestimate maintenance and update costs build up technical debt – and thus jeopardize customer experience and conversion. And those who exclude operating costs such as hosting, support or downtime calculate the ROI too optimistically and experience nasty surprises in the third year at the latest.

A holistic total cost of ownership analysis forces retailers to think about the life cycle. To support online retailers in this sometimes complex process, Shopmacher has developed an internal TCO tool that systematically maps all cost blocks over three to five years. “For us, this is not a sales argument, but a mandatory tool,” emphasizes Götz. “Because only those who honestly calculate their total costs can ultimately make the right platform decision.” Those who fail to do so not only pay more, but also lose time, opportunities and competitiveness.

Checklist: What belongs in a TCO analysis

If you want to reliably calculate the total cost of ownership (TCO) for your e-commerce platform, you should at least take these points into account:

Business scenarios & KPIs
- Transactions, basket values, growth rates
- Expected scaling (e.g. international expansion, peaks)
License and subscription costs
- Annual or usage-based fees
- Cost increases with higher transaction volumes
Initial costs (setup & migration)
- Project management, implementation, customizing
- Data migration, content, design and templates
Integration into existing systems
- ERP, PIM, CRM, payment, logistics, marketing automation
- Effort for interfaces and adjustments
Operation & Infrastructure
- Hosting, cloud capacities or data center
- Security, monitoring, backups, energy
Maintenance & Updates
- Regular software releases
- Effort for adjustments for system updates
- Risk of “technical debt” in the event of late updates
Support & Service
- Internal and external support
- SLAs, ticket systems, service providers
Training & productivity
- Training for teams
- Induction of new employees
- Time lost due to complexity or failures

Price tag trap: How retailers ruin their calculations when relaunching store systems

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