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Choosing Between SaaS, Open Source, and Self-Hosted to Build a Multivendor eCommerce Marketplace

by Arthur Zuckerman

Starting an eCommerce marketplace is a viable business opportunity for entrepreneurs. Reports project that global eCommerce sales will grow significantly and surpass $8.1 trillion by 2026. The growing popularity of online shopping and the increasing use of the internet is driving the growth of the eCommerce industry, which presents a potentially lucrative market for entrepreneurs.

This trend is expected to continue, with more businesses looking to establish an online presence to tap into the growing eCommerce market. However, building a business does not come without challenges. Building a multivendor eCommerce business involves creating a platform that allows multiple vendors to sell their products or services to customers through a single website.

Knowing the proper approach and the right ecommerce software to build your marketplace is an important decision, as it can have a significant impact on the success and growth of your business. The three main options for building a multivendor eCommerce marketplace are SaaS (Software as a Service), open source, and self-hosted solutions.

Each option has its own advantages and disadvantages, and the best choice will depend on the specific needs and goals of the business. In this article, we’ll discuss the key factors to consider when choosing between SaaS, open source, and self-hosted solutions to build a multivendor eCommerce marketplace. Let’s begin by knowing all three in detail.

SaaS-Based eCommerce Software

The software which is hosted by a third-party provider and made available to customers over the internet, rather than being installed on a local server is referred to as SaaS eCommerce software. It is typically accessed through a web browser, and customers typically pay a monthly or annual subscription fee for access to the software and its features.

Because the software is hosted and maintained by the SaaS provider, customers do not need to worry about updating, maintaining, or securing the software, which can reduce the costs and technical requirements associated with software ownership. Examples of Saas-based eCommerce software are BigCommerce, Squarespace, and Shopify.

Open-Source eCommerce Software

An open-source eCommerce platform is a software solution that offers full access to its source code, enabling extensive customization capabilities. When purchasing a license for this type of software, you have complete control over the code to modify it to fit your unique needs.

However, customization may not be as straightforward as it sounds and requires technical expertise from certified developers, which can result in added time and resources. The open-source eCommerce platform is ideal for businesses that require a highly customizable online store and have the internal IT resources to support it. Examples of open-source eCommerce software are Magento, WooCommerce, and OpenCart.

Self-Hosted eCommerce Software

Self-hosted eCommerce software refers to an eCommerce platform installed and run on the website owner’s own server or web hosting account. This type of software provides full control and ownership over the marketplace and its data, as well as the ability to customize the platform to meet specific business needs.

The website owner must manage and maintain the server and software, including updates, backups, and security measures. However, self-hosted eCommerce software offer more flexibility and control and are more cost-effective in the long run. Examples of self-hosted eCommerce software include Yo!Kart and CS-Cart.

Comparing SaaS-Based, Open-Source, & Self-Hosted eCommerce Software

Now that we have read about these solutions, each of them has its own pros and cons which are discussed below. One can choose their preferred solution as per their specific business resources and requirements.


SaaS-based eCommerce software typically offers limited customization options, as the software is hosted and managed by the provider. On the other hand, open-source eCommerce software offers much greater customization potential, as users have access to the source code and can make changes as they see fit.

Self-hosted eCommerce software falls somewhere in between, as the level of customization will depend on the specific platform and its features, but it generally offers more options than SaaS-based solutions. However, self-hosted eCommerce software also requires more technical know-how, as the user is responsible for maintaining the software and its infrastructure.


In terms of scalability, SaaS-based eCommerce software is generally the easiest to scale as it is hosted and managed by the provider. The provider typically handles infrastructure and scaling concerns, allowing users to focus on running their businesses. Open-source eCommerce software can also be scalable, but it requires more technical expertise and resources, as the user is responsible for setting up and maintaining the infrastructure.

Self-hosted eCommerce software can also be scalable, but it requires a significant investment in infrastructure and technical know-how to ensure that the platform can handle increased traffic and sales.


Self-hosted eCommerce software can offer better security than open-source or SaaS-based solutions in some cases, as the user has complete control over the platform and its security measures. This allows the user to customize security measures and protocols to fit their specific requirements. Additionally, self-hosted eCommerce software can allow for better control over sensitive data, as the user has complete control over data storage and management.


Self-hosted eCommerce software can offer cost savings compared to open-source or SaaS-based solutions in some cases. With self-hosted software, the user only needs to pay for the cost of the software license and the infrastructure and hosting costs, rather than paying a recurring fee for access to the software.

Additionally, as the business owner has complete control over the platform’s performance, the cost of performance optimization and scaling is reduced to a huge extent.

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Relevant Usage of Different eCommerce Software

SaaS-Based eCommerce Software

Choosing SaaS is a cost-effective solution that frees up resources for more strategic and revenue-generating initiatives. SaaS reduces the expenses associated with maintaining and securing infrastructure, allowing for investment in enhancing customer experience. The developers instead of spending their time on upkeep and security can work towards optimizing the website.

Open-Source eCommerce Software

Utilizing hosted eCommerce software, either with a PaaS or IaaS deployment, can be a viable option for those who desire to use open-source software and work with a single vendor for both their platform and hosting. This option grants access to the source code. However, it is important to note that security and updates will still need to be managed in-house.

Self-Hosted eCommerce Software

When considering the use of on-premise eCommerce software, it is important to factor in the budget and the technical demands of setting up and maintaining the infrastructure. In the past, on-premise solutions were the only way for businesses with extensive customization needs to have full control over their retail site and data.

However, advancements in technology have led to increased customization options with a lower cost of ownership.

Over to You

In conclusion, the choice between SaaS-based, open-source, and self-hosted eCommerce software depends on a variety of factors such as budget, technical expertise, control over data, customization, and scalability. SaaS-based eCommerce solutions are easy to set up and cost-effective but may have limited customization options. Open-source eCommerce software offers more control and customization but requires technical expertise and a bigger budget for hosting and maintenance.

Self-hosted eCommerce solutions offer complete control over data and customization options but require the basic know-how to set up and maintain. Ultimately, the best option will depend on the specific needs and resources of each business.

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