Build it or buy it?

Technology & features

Technological features impact far more than the actions your subscription platform can perform. They also play a major role in your speed to market, which can result in a faster return on your investment for your business and affect the ease of use of your solution.

To make sure you’re covered in all of these areas, start by taking stock of both your non-negotiable technology requirements and your nice-to-have features. Compare the uptime of your various solution options to what your team would be able to provide on a new build. Finally, consider the speed to market and corresponding return on investment of each option.

Partnerships & integrations

To ensure you’re making the right investment for your business, it’s key to choose a subscription management solution that can grow with you. Prioritize a flexible tech stack—this way, you can leverage existing technology on the market to scale more quickly while also tapping into the benefits of improved customer experience, enhanced analytics, and increased personalization opportunities.

If you choose to buy your subscription platform, investigate whether or not you will be able to have a true impact on the company’s product roadmap. The ability to provide feedback, suggest changes, and give input regarding updates, features, and releases can have an enormous impact on your partnerships and integrations.

Analytics & forecasting

Analytics and forecasting tools are crucial aspects of a subscription management solution. These features are used to measure success and return on investment for your business while also empowering you to optimize underperforming areas.

If you’re buying an out-of-the-box solution, analytics functionalities will typically include an overview of your revenue, including revenue planning tools and a breakdown of your key performance indicators (KPIs). They can also include an overview of your customer base, performance tracking of your product SKUs and variants, industry benchmarks, customer actions tracking tools, and media attribution capabilities.

Building your own solution involves not only building the subscription platform itself, but also the infrastructure to track and analyze the performance of your subscriptions. This includes additional labor and resourcing costs in the form of data scientists and analysts, who turn this crucial information into actionable insights that can help you grow your business into the future.

Industry expertise

Industry expertise is an often overlooked factor in a subscription platform, yet it can significantly impact a merchant’s pace of innovation. Whether you choose to build or buy, your future success depends on being able to constantly adapt and enhance your core product to meet changing demands. That means investing in industry-experienced subject matter experts.

If you buy an out-of-the-box solution, many providers offer this expertise. By pulling in insights from the thousands of merchants who utilize their platform, these providers are able to continuously evolve to meet the collective demands of the market. This alleviates the need for your store to implement the time-intensive ongoing research and analysis required to stay on pace with current trends, allowing you to instead focus on other aspects of your business.

If you build your own solution, be sure to budget both time and resources for industry specialists that will allow you to maintain pace with your competitors. Bear in mind that if your in-house developers do not have a holistic view of the ecommerce ecosystem, your business may experience implementation barriers, as well as challenges in creating a future roadmap.

Infrastructure reliability

Having a dependable infrastructure for your subscription platform is crucial for the financial health of your business. Any mishap may lead to complete operational disruption and hundreds of thousands of dollars in costs.

To evaluate whether or not building or buying your subscription platform will better serve your infrastructure needs, consider the following factors:

• Data privacy and security, maintaining optimum security amid ever-changing legal requirements as well as compliance with local and global privacy standards and laws
• Technical support for various teams that require knowledge and use of the platform, especially when infrastructure is not functioning as intended
• Contingency planning, establishing risk mitigation plans and protocols to protect the business, as well as as proper escalation paths when things go awry
• Maintaining, monitoring, and upgrading technology to ensure that the entire tech stack is up-to-date, works seamlessly with integrations, and is free of issues and bugs
• Hosting costs to create and maintain a website that is accessible, with minimal to no downtime

Charge processing & fraud prevention

Charge processing and fraud prevention are both integral to smoothly running a subscription commerce storefront, making them each priority factors in the decision to build or buy. Businesses who sell physical goods have additional challenges when balancing the intersection of inventory management with charge processing and avoiding payment processor errors.

Fraud prevention, too, can be a complicated and lengthy process—one that needs to be built into the subscription platform of your choice. This can be especially complex when storefronts are available to customers from countries all around the world with different fraud prevention systems. For example, with customers in the European Union, storefronts have to support 3DS secure checkout or flag subscription payments as errors.

Documentation, training & troubleshooting

Any subscription platform, whether bought or custom-built, requires documentation and tools to support the teams that work with it. If you choose to build, consider the amount of time and effort that will be required to develop and maintain these materials and provide your teams with proper onboarding and ongoing support. These are all necessary to keep product adoption and upkeep on track.

Your company will be responsible not only for maintaining and supporting documentation for your subscription features, but also for bug reporting and resolution, feature and bug testing, user training, security, and compliance—all of which can change and evolve in their methods over time. Additionally, you’ll need to ensure that you’re set up for a streamlined transfer of knowledge with your documentation, should your developers leave your company.

If you choose to buy your subscription platform, be sure to vet that your chosen solution offers comprehensive support, both in terms of documentation and support staff. Investigate, too, the availability of this support—are resources available 24/7, or only at certain times?

Finally, consider the processes of onboarding and incident management. Will you be set up for success from the start with the platform of your choice, and throughout your use of it? The processes for troubleshooting and training across platforms can vary, making it key to do your due diligence and ensure that your chosen solution meets your requirements.

Data security & compliance

Configuring compliance systems to regulatory change is essential to the functionality of your business. User data breaches are public, very expensive, and erode customer trust, while applications are gold mines of sensitive, personally identifiable information (PII) like social security numbers, credit card numbers, and more. Meanwhile, security environments are constantly changing, and data hacking techniques have become supercharged with the power of cloud computing.

If you choose to build your subscription platform, you must properly build and maintain processes for data security and compliance. To do so, you must staff internally and be equipped to withstand a true hack. This requires constantly monitoring, maintaining, and patching code and libraries to ensure user data is secure and does not risk any data loss.

If you choose to buy your subscription platform, ongoing maintenance of the software—including fixing bugs and defects, updating versions, and more—will be outsourced. This alleviates the draw on your internal resources and associated opportunity costs, although it can limit your ultimate control over data security and compliance.

To vet data security and compliance for your chosen vendor, ensure that they regularly conduct vulnerability assessments and penetration tests, are SOC 2 compliant, and have employee training in place to mitigate physical security risks. Additionally, investigate whether they have ever had any previous cybersecurity tasks, and if so, how they were remediated.

Initial development costs

Sticker shock around the initial contract investment required to buy an out-of-the-box subscription platform can lead merchants to believe it will be more affordable to build their own solution. However, it’s key to dig deeper into the investment that any monthly fees associated with buying could provide to the health of your business.

While it may be overwhelming to see all costs outlined upfront, these should always be compared to the initial development costs associated with building your own solution, which can often far exceed the cost of buying.

When custom-building your solution, these costs can vary, and may be difficult to estimate even if your company has previous project management experience. Typically, needs involve staffing, including multiple developer salaries and other resourcing needs like project manager salaries and executive input. It’s key to invest in quality talent that you can retain to ensure future scalability.

Other initial development costs include any consulting and third-party services, as well as IT infrastructure needs like servers, power, and connectivity. Depending on the nature of your business, there may be additional overhead expenses involved to get your solution off the ground—including any that come up due to unforeseen issues or delays.

Ongoing & maintenance costs

As with initial development costs, ongoing upkeep and maintenance costs are key factors when budgeting for a custom-built solution.

When custom-building your solution, consider the extra costs of hosting, system monitoring, infrastructure reliability, and charge processing. Analytics and business insights, fraud prevention, and security and compliance costs should also be weighed, as well as additional support fees. Finally, consider other costs around maintenance, including those for new features and enhancements down the road.

Hidden & opportunity costs

When thinking about whether to build or buy, opportunity costs are often overlooked—yet these can have a monumental impact on a merchant’s finances. Buying an out-of-the-box solution outsources the software development to an external group, allowing you to devote time and energy to your core products and strategic opportunities. This can increase speed to market and pace of innovation.

Building your own software, meanwhile, can divert a high volume of internal resources away from other profitable opportunities and core business initiatives in the organization. Systems must be constantly reengineered to support additions and changes in business initiatives. If this results in downtime of a business-essential system, merchants may experience a severe loss in business.

Other areas where merchants building their own solution may incur opportunity costs include:

• Out-of-the-box integrations and partnerships: Require resources from engineers and other internal teams to develop, which may detract from the core product
• Secure engineering practices: Require Product Development teams to follow standardized processes with built-in security checks, as well as complete security training programs to stay consistently vigilant
• Data migration: Can be time-consuming and complex to effectively migrate data from the original product to a new build
• Access to domain experts: Requires the merchant to hire or contract out experts in the subscription space with the most up-to-date information on best practices

Total cost of ownership

While at face value, building a subscription platform may seem more economical than buying, the total cost of ownership (TCO) should be considered to accurately assess this. A crucial deciding factor, TCO combines all costs involved: initial development costs, ongoing costs, and opportunity costs.

All in, the TCO associated with building is typically greater than that of buying. The deciding factor here is whether this higher price offers a worthwhile competitive advantage for your business.