EP226: Debunking Ecommerce Platform Cost Model Myths: The Devil In The Detail

Inside Commerce: Ecommerce Strategy, CX and Technology Podcast

Hot on the heels of Shopify’s smart PR on their platform TCO cost model and value proposition ‘research’, we’re pulling apart why vendor-led cost model analysis needs to be taken with a generous pinch of salt.

The issue: no two TCO models ever show exactly the same cost model structure or calculations, so you’re not getting a true like-for-like comparison and evaluation. This can distort perceptions of value and create false flags, either under or overstating real costs.

There are lots of “research shows platform X has the lowest TCO / fastest ROI” studies, and from our experience this is smoke & mirrors. Which platform ecosystem delivers the most affordable cost model and highest value is dependent upon the size of business, complexity of build, operational setup and a brand’s red lines. It also depends upon how value is defined, and whether or not attempts are made to put a monetary value to things like opportunity cost and operational efficiency.

When a cost model assessment is based on the business type that is best suited to a particular platforms, inevitably the research will demonstrate it hits the value goal.

In this podcast, we break down why you need to be sceptical when vendors publish cost models showing they deliver the most value / quickest ROI. It’s great marketing but we explain why no platform can ever state it consistently delivers the lowest cost for any business. Let’s pick apart cost models!