A survey of ecommerce providers for software vendors

Overview

The choice of ecommerce provider is probably one of the more important ones you make as a software vendor. It isn’t too hard to compare providers by feature set or price. But what about other vital attributes, such as support, reliability, ease of set-up and how they treat your customers? It isn’t realistic to try every provider, so this major decision is often made on the basis of haphazard anecdotal evidence from forums. I created a survey in an attempt to gather some systematic data on the ecommerce providers most commonly used by small software vendors. I present the results below without fear or favour. Skip ahead to ‘Overall ranking’ if you are in a hurry.

Methodology

I posted a request for survey responses on this blog and on a few forums frequented by microISVs and small software companies. Any vendor of software (desktop or web based) not directly affiliated with an ecommerce provider was eligible to take part. Software vendors were invited to fill out a survey form on wufoo.com for each ecommerce provider they had used in the last 2 years. They had to supply their product URL and an email address from the same domain so that I could verify their identity. They also had to check a box proclaiming:

I am a software vendor and I have used this Ecommerce provider in the last 2 years. I have no commercial interest beyond being a customer. (If you have affiliate links to the Ecommerce provider, that isn’t a problem.)

They then had to reply to an automated email from wufoo to the email supplied confirming it was them that had completed the form. If they didn’t reply to the automated email I followed up with a few more emails. Although tedious for me, I felt this was an important safeguard to avoid any possibility of fraudulent entries. I also checked for duplicate entries, duplicate IP addresses and other suspicious patterns. The survey was open from the 5th to the 8th October. Any responses not validated by 10th October were removed from the data.

The data

202 survey responses were received from 166 different software vendors. 9 responses were rejected as I could not verify their identity (they didn’t respond to several emails). 1 response was rejected due to a possible conflict of interest raised by the software vendor (they had done paid work for one of the providers). This left 192 valid responses. I saw no evidence of any attempt to rig the results.

You can download the raw data. It has been stripped of any personal identifying information. Feel free to do your own analysis or check my results.

Providers

The survey listed 14 of the major ecommerce providers, plus an ‘other’ box for providers not listed. Valid responses were received for 25 different ecommerce providers, as shown below:

responses

Note that ‘e-junkie+PayPal/GoogleCheckout/2Checkout’ has been shortened to ‘e-junkie’ for brevity.

Questions

Below I show the average (mean) score per ecommerce provider by survey question. The providers are sorted by score. Providers with less than 3 responses weren’t considered statistically valid and are not shown here (see the raw data for all responses).

Features

“How do you rate the range of features offered, e.g. coupons, support for multiple currencies, CD shipping, affiliate tracking, handling of tax etc.”

5=”Excellent”, 4=”Good”, 3=”Satisfactory”, 2= “Unsatisfactory”, 1=”Dismal”

features

Ease of use

“How easy is their system to set-up, manage and modify?”

5=”Excellent”, 4=”Good”, 3=”Satisfactory”, 2= “Unsatisfactory”, 1=”Dismal”

ease_of_use

Reliability

“How reliable is their service? Does their server ever go down?”

5=”Excellent”, 4=”Good”, 3=”Satisfactory”, 2= “Unsatisfactory”, 1=”Dismal”

reliability

Support

“How good is their support? Do they respond in a timely manner? Are their staff helpful and knowledgeable?”

5=”Excellent”, 4=”Good”, 3=”Satisfactory”, 2= “Unsatisfactory”, 1=”Dismal”

support

Fraud protection

“How well do they protect you from chargebacks and false positives (i.e. valid cards declined)?”

5=”Excellent”, 4=”Good”, 3=”Satisfactory”, 2= “Unsatisfactory”, 1=”Dismal”

fraud_protection

Ethics

“Does this service disrespect you (e.g. by paying you late) or your customer (e.g. by spamming them, adding unwanted items into their cart or making hidden charges)?”

5=”Excellent”, 4=”Good”, 3=”Satisfactory”, 2= “Unsatisfactory”, 1=”Dismal”

ethics

Value for money

“How do you rate their service compared to the cost?”

5=”Excellent”, 4=”Good”, 3=”Satisfactory”, 2= “Unsatisfactory”, 1=”Dismal”

value_for_money

Future

“What is the probability you will still be using this service in 12 months time?”

5= “>95%”, 4= “>75%”, 3= “>50%”, 2= “>25%”, 1= “<25%”

futureThe average score and standard deviation for each question across all providers is shown below:

question_analysis

From the averages software vendors are most happy with reliability and least happy with ease of use. From the standard deviation the least variation is in fraud protection and the greatest variation is in support.

The correlation (R squared) between the likelihood of staying with a provider and the answers to the other 6 questions is shown below:

correlation

Perhaps providers should be concentrating more on ease of use and support to differentiate themselves from the competition.

Providers

Below I show the average (mean) score per question by ecommerce provider. The providers are shown in alphabetical order. The standard deviation is also shown to give an idea of how consistent the responses were (the larger the standard deviation the more variation there was in responses). Providers with less than 3 responses weren’t considered statistically valid and are not shown here (see the raw data for all responses).

avangate

bmt_micro

e-junkie

esellerate

fastspring

kagi

paypal

plimus

regnow

shareit

swreg

Overall ranking

The average (mean) score and overall ranking for providers with at least 3 responses is shown below.

overall

The chart below shows the score broken down by question (click to enlarge):

overall_detailed

The chart below compares the 4 top performers by question:

top_performers

Avangate, Fastspring, BMT Micro and e-junkie all did well. The difference between the Avangate and Fastspring score (approx 0.3%) is probably too small to be statistically significant, but the survey shows significant differences between the best and worst providers. SWREG trails in last place by quite a margin, managing to place last or second to last in an impressive 7 out of 8 questions. It is also noticeable that the providers owned by industry heavyweight Digital River fill 4 out of the bottom 5 places in the ranking. This rather begs the question of how they got to be the industry heavyweight in the first place.

Note that the ranking does not show who the ‘best’ ecommerce provider is, for the following reasons:

  • ‘Best’ depends on your requirements. All the questions have been equally weighted here. If you decide (for example) that good support should be weighted higher than ease of use you might come up with a quite different ranking.
  • The assignment of numerical values to responses (e.g. Excellent=5, Good=4 etc) was done for easier analysis, but is entirely arbitrary. Different values might have resulted in a different ranking.
  • We aren’t comparing like with like. Software vendors using ‘lightweight’ e-commerce providers such as PayPal or e-junkie might have lower expectations than software vendors using ‘fully featured’ e-commerce providers .
  • e-junkie, SWREG, BMT Micro and RegNow had respectively only 8, 7, 5 and 3 responses. They are therefore vulnerable to statistical fluctuations.

That said, the ranking does correlate fairly well with the many comments I see about ecommerce providers on various forums. I don’t think I would want to use any of the providers in the bottom half of the ranking.

Conclusion

While one shouldn’t take the overall ranking too seriously, it is clear that there are major differences in the performance of ecommerce providers in important areas other than pricing and features. I hope these results will allow software vendors (myself included) to make a better informed choice of ecommerce provider. Hopefully this will, in turn, improve ecommerce services overall by rewarding the good companies at the expense of the poorer performers. It would be interesting to run this survey in another year or two and find out what has changed. Thank you to everyone that took part.

Disclosure: I use e-junkie+PayPal/GoogleCheckout/2Checkout as my payment provider for my Perfect Table Plan software. I have an affiliate link to them in another article on this blog which brings me a few dollars a month. I have no other commercial relationship with any of the other ecommerce providers.

BMT Micro
e-junkie
eSellerate
Fastspring
Kagi
PayPal
Plimus
RegNow
ShareIt
SWREG

41 thoughts on “A survey of ecommerce providers for software vendors

    1. Andrey

      Based on my own experience: you should switch to another payment service ASAP. For our scripts we were getting 3 chargebacks out of 4 sales, and ShareIt staff did NOTHING to improve the situation! Now we are using Avangate which is MUCH MORE secure, moreover, suspect orders remain on-hold so that there is no way to receive chargeback for them as they remain on customer’s CC!

  1. Stuart

    Thank you, I have been thinking of moving from ShareIt as my primary provider, and this survey will make it much easier to get started.

  2. Alan

    I’ve found Shareit have improved their customer service, though still very slow, ie you do now get a response, it’s just a week or so late.

    Fastspring have been good, though I recently lost a sale due to a total lack of response, which was unexpected from them.

    You ask how DR got to be so big in the first place – I guess as they got bigger, as well as snapping up smaller companies, they lost touch with their client’s needs. Now that they just took a big hit by losing a corporate client they’ll remember it’s the little guys that make up the money… Hopefull, anyway!

    1. Dan from FastSpring E-Commerce

      Alan,

      I see your comment. What your reporting is definitely not normal. We often respond to emails within 1-2 hours, never in more than 12 hours, even during off-hours and on most weekends. However, every once in a while an error is made and if this is the case here I truly apologize for any inconvenience this may have caused.

      Rest assured I will look into this right away and find out what happened. You can expect to hear from your Dedicated Account Manager shortly. And we’ll see what we can do to make up for that problem to you. You deserve fast, high quality response at all times, and it’s our job to provide it for you without fail.

      Dan


      Dan C. Engel, CEO
      FastSpring E-Commerce

    2. Scott Kane

      @Alan

      “hey lost touch with their client’s needs. Now that they just took a big hit by losing a corporate client they’ll remember it’s the little guys that make up the money”

      I recall conversations on DR going back to the 90′s when they first emerged. Their attitude then was pretty much the same as it is now – except back then they “inivited” developers to sell through them *if they thought you made enough money to make it worth their while*.

  3. Alan

    What happened was someone managed to give FS a wrong email address (too many letters ‘A’ in it).

    I guessed that was the case and wrote to them, upon which they confirmed it was indeed them and they did wish to purchase.

    I know how to re-send but wasn’t sure about re-sending to a different email address, so CC’d it to FS, stating that hopefully someone there would know how to change the email.

    Quite some time later, a day or two, maybe three, got a very angry email and a refund request. I tried generating a key manually and apologising, at which point he claimed he had the one type of OS it doesn’t work with, despite liking the demo, so wanted a refund anyway – so got the license for free basically.

    In fairness I should have got more involved myself, in fact had it been with Shareit or someone would have done so. It was actually my expectation of a quick resolution from your end that let things go that far!

    I’ve worked for years as a manager and my golden rule was to always follow up. On this occasion I didn’t – and re-proved the rule… My fault as much as yours but I was expecting *some* action on that, if only a ‘here’s how you can do that yourself’ email. Instead I got an ignored and angry customer.

    AC

  4. Alan

    PS I posted here rather than email to show it was in fact an unusual situation.

    I should also add that I revieved an email letting me know the email address bounced. I already knew as I send a thank you note to each customer. I replied to that email and said I thought there were too many ‘A’s in the address. I guess the receiver figured I would handle it. When I received the guy’s response I CC’d it and figured you’d handle it…

    I *should* have emailed directly, rather than CCing, and I *should* have followed up to ensure action had or was being taken. Instead I made the mistake of presuming it would be because normally you’re very good at such things.

    AC

  5. ken white

    Alan, does sound like we dropped the ball there. Pretty sure it was my fault, so sorry about that.

    If you do need to in the future, if you do an order search to locate the order, there is an edit link next to the users contact info to change email, then option on the right to resend the fulfillment emails.

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  8. S. Tanna

    Interesting survey.

    One thing I do wonder about these things is if everybody uses the same scale (obviously we hope it balances out with enough users). The thing is, unless you’ve used more than one vendor, preferably several vendors, how do you really rate them as good or bad for features, or reliability of whatever.

    To give an example, if a vendor 1 tells you they are going to add X, Y and Z, and you think those would be good features to have, but they don’t have them yet, you might give them a low rating for current features. On the other hand vendor 2 even one who has less features than the vendor 1, has everything you currently need, you might give them a high rating. So how do we compare?

    Is there some sort of chart some place which says vendor 1 offers A, B, C, vendor 2 offers B, C, D, vendor offers A, C, D, etc.

  9. Andy Brice Post author

    >One thing I do wonder about these things is if everybody uses the same scale (obviously we hope it balances out with enough users).

    This is an issue. I would hope that with providers offering the same sort of service (e.g. ShareIt vs FastSpring vs Avangate) the level of expectations would be similar. But comparisons of providers with different levels of service (e.g. Avangate vs PayPal) are obviously more suspect.

    >Is there some sort of chart some place which says vendor 1 offers A, B, C, vendor 2 offers B, C, D, vendor offers A, C, D, etc.

    Not that I am aware of. It would be useful if there was.

  10. Ellen

    I didn’t participate in the survey because I haven’t used any of the providers within the last 2 years, but I just bought a copy of Postbox, and was really impressed how good the shopping experience – provided by Fastspring – was. We’re not looking for an ecommerce provider at this point, but if we were, they’d be my choice.

  11. Jason

    Andy,

    Thank you for taking the time & effort to do this. It’s a great resource for someone like myself who’s trying to do their homework before selecting a provider. Fantastic.

  12. Ildar

    is there info on the average product/service cost that is sold per each ecommerce provider?

    also it might be interesting to see preferences of vendors from different countries.

  13. Zviki

    Andy,

    Thank you for this post.

    I’ll start by saying that I’m with ej+PP too. I’m generally happy. However, there’s a big limitation here to which types of payments you can accept. In my country, PP only offers Website Payments Standard. They claim customers are not required to have a PP account to pay, however, the truth is that this depends on your customers’ country of residence.

    The commission is lower (50% and more) but you are less flexible with these tools, offering worse service to your customers. Eventually this can cost you business. I’m not sure how much. So, it’s not really apples to apples comparison.

    1. Norman Clark

      I was not surprised to see PayPal so low on the ‘support’ listing. They don’t provide ANY support or answers. Check out their websites and try the ‘contact us’ routine.
      I have had an account with them ‘personal’ for over 7 years and was a staunch advocate of the service – and I still believe the operational system is good.
      However using them with a Merchant Account is different as without warning they have blocked our business account for ‘going over the limits’. OK, we understand moneylaundering and all that, and have been/were happy enough to re-affirm who we are, where we are, bank details etc., but after FOUR tries plus sending the details by Recorded Mail to their Dublin Merchant Account address the account is still blocked and all you get are automated responses.
      We currently have over €2500 locked away, but PayPal kindly inform us that we – i.e.’They’ will still accept payments from our Customers.
      Oh really? What happened to the money laundering?
      PayPal is excellent when it is working but a disaster when they choose to arbitrarily close you down. Be warned!

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  17. Michael

    Thank you, Andy for doing this survey and for compiling the results. You saved my many hours of preliminary investigation in my recent search for a new ecommerce provider. Because of your survey I was able to focus on just a small handful of providers and reach a decision with just a couple of days.

    For others who come along later to use this survey, I would like to add a few words about the provider that we just left.

    We sold our software through Kagi for about five years. While many aspects of their service were solid (the store had pretty good up-time; we normally got paid on time, etc.) there were some constant frustrations that finally got to be too much. Most importantly, their on-line software for store maintenance sucks, plain and simple. Also, most of their effort seems to go only toward helping themselves (e.g., they will simply not respond to a customer who wonders what a charge from Kagi on their credit card statement is about).

    I would normally not go to the length of posting a negative review, but the last straw came when they informed me that, since we have switched ecommerce providers, they will be withholding thousands of dollars from their last payment to us for months, in case there are any returns or other problems that need to be covered. I understand that they need some reserve to deal with returns, but our return rate has been very low over the years (I seriously doubt we had this level of returns for the entire time we were with Kagi).

    I thought others who are in the process of selecting ecommerce providers would be interested in hearing from one ex-Kagi user. There are far better options out there, and nothing about Kagi that you cannot get from someone better.

    Michael

  18. Ben

    A warning for those using Regnow – read the new agreement they sent out very carefully. It seems to allow Regnow to override your pricing and set their own – for YOUR products.

    The new chargeback fees are ridiculous.

  19. Kaz

    Thanks a lot to Andy for doing the review! And thanks even more to Michael for posting his Kagi experience. We are going to switch from Kagi to another provider as soon as practically possible, so it’s good to know in advance that they are withholding money!
    I couldn’t agree more that Kagi is only trying to help themselves. Plus they are charging a fortune for their service.

  20. Karl

    Am I wrong about this? I thought the first reason for using an affiliate network was because of the additional sales they would bring in. I want the exposure and the marketing to get more sales.

    All the other issues are just technical and can be handled in many ways. (I’ve had an open source shopping cart installed on our site.)

    So, do any affiliate have the ability to drive new sales to the software publisher?

    TIA.

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  22. Rosanne

    Many, many thanks Andy!!! Your survey helped me enormously in my search for a suitable provider.

    I’ve released freeware but am a complete novice to publishing ebooks and shareware using e-commerce providers. I’ve written to Avangate and Fastspring asking for guidance. Avangate was very helpful but unfortunately, Fastspring was not at all. I would like to publish two “know-how” ebooks, after having conducted thorough and in depth research into their subject matters, but am unable to do so without having answers to my queries. I even asked a member of the family who has PhD in computer science and a very successful company but he could not answer my questions as he has never released shareware. I think e-commerce companies should have a tab on their sites dedicated to providing full information to novice authors and developers like myself. Below is my email to them:

    “I’m thinking about creating the books in ePub format using the Mac application Sigil and that users would be able to read them on their computers and ebook reader devices. I’m in the dark regarding a few issues and I would be very grateful if you could explain them to me in detail.

    1. I’ve released freeware in the past but don’t have any idea about releasing shareware. To be more precise – what is the licensing mechanism? What are the licensing options? Do I have to do something with an ebook, for example, add a script in order to make it ask for and deal with the license key or just upload it as it is and you do the rest? Does your website automatically generate random keys based on the name of the product and the customer’s details? Do you keep a list of customers and their respective license keys? How it is possible to make a refund to a customer who wants to “return” the book if he has already been issued with a key?

    2. My biggest concern is that people would be able to copy from or convert the format of the books – for example, using Calibre application – and then redistribute them, thus circumventing the licensing mechanism. Does this mechanism prevent them from doing this? Do I need a DRM system? If I do, what is the type of DRM, its mechanism and its cost? I understand that DRM is not supported by many ebook reader devices and freeware computer applications, is this the case?

    3. Apart from people being able to find the ebooks on my website, how can I promote them? What is the difference between resellers and affiliates and what is the mechanism for employing them? Is it possible to use a company like Amazon as a reseller?

    Many thanks in advance for your time and advice.”

  23. AddaxSoft

    Thank you so much. This is exactly what I was looking for around the web.

    I was confused between BMT micro and avangate.
    I loved the way you presented your data. Thanks a million.

    Regards,

  24. Robin

    Hello,
    When I began to search for an e-commerce provider 6 months ago, I looked at Digital River solutions. They seemed to be rather good at some points (marketing, coupons, ….) but in fact I was simply looking for *one* technical solutions: how to call a specific php file after a customer has purchased? I found this solution in PayPal with the IPN (Instant Payment Notification): in your PayPal business account, you specify the URL of a php file hosted on your site that has to be called as soon as a purchase is confirmed (ie: money is received on your PayPal account). In my case, this php file updates my customers database, prepares a new license (waiting to be activated from within my software). And that’s all.
    I’m aware that PayPal is not as specialized in software distribution as other e-commerce providers but their prices are fairly low, refunds are free of charges and they just offer *the feature* I really need.

    1. Petko

      @Robin, I am looking for exactly the same thing. Both Fastspirng and Avangate are offering it. I am still not sure which provider will I choose (I am with ShareIt now).

  25. Nareshprasad

    We were actually looking for an alternative e-commerce site to Share-it. Because they require a company mail-id from customers/clients buying the software. There is no straight forward buy for a normal user(using normal mail-id i.e gmail or yahoo or msn). By searching we thought regnow is best in this service as Pad file submits in download.com and famous shareware listing sites asks for regnow id of the product. On researching in this got this article luckily to know this market and the real leaders in it.
    Thanks for this nice survey and article Andy.

    1. Andy Brice Post author

      If I saved one vendor from the clutches RegNow it was worth it! ;0)

      BTW I make plenty of sales to people with free emails, such as hotmail, gmail and yahoo.

  26. Norman Clark

    Hi Andy,

    I have included a comment regarding PayPal, and I understand the danger applies to Google Checkout as well, although I have never used this other than as a purchaser.

    Your article is absolutely brilliant and I thank you for it, as I know many others do.

    You might be surprised to know that we visited our local bank here in France – which is one of the top three, and asked their advice and were stunned to hear that they had never even heard of PayPal or Google Checkout or even Merchant Accounts!

    I think we need not only to change our payments system but also our bank – and maybe even country of operation!

    Cheers, and thanks again for the info.

    Norm

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