What Is Magento?
Magento is an ecommerce platform that specializes in highly customizable shopping cart systems for online stores. It offers merchants complete control over the appearance, functionality, and content of their shopping carts.
Magento also offers impressive search engine optimization (SEO), catalog management, and marketing tools. This platform is an all-in-one ecommerce solution for businesses of any size.
Magento Pricing Tiers
There are 3 Magento pricing tiers: Magento Open Source, Magento Commerce, and Magento Commerce Cloud.
The cost of each tier is scaled according to a company’s average gross sales revenue, so each level will likely be less expensive for a small business than it would for a large corporation.
Each tier offers more services and features than the last, so a company’s specific needs will determine which level is the best fit.
Magento Open Source
As its name implies, Magento Open Source is an open-source platform, which means it is completely free.
While a $0 price tag sounds fantastic, it’s important to note that Magento Open Source has some distinct limitations. Compensating for some of these limitations requires spending on third-party services. So, while the download and use of the platform are free, choosing this tier still incurs considerable expenses.
Magento Open Source Features
Magento Open Source offers the following features:
- Integrated Checkout, Payment, and Shipping
- Mobile Optimized Shopping
- Global Selling
- Catalog Management
- Extended Functionality via App Marketplace
- Instant Purchase
- Site Search
While these valuable features are included for free with the Open Source tier, it does not include some essential elements necessary for an online store. Those elements will have to be accessed from a third party.
Pricing for Services Not Included in Magento Open Source
Magento Open Source does not include the domain, hosting, or security.
Purchasing a domain can cost between $10-20 a year. Web hosting is priced at $10-30 a month. An SSL certificate for online store encryption security costs between $200-600 a year.
Unless you have the time and skill to develop the webpage on your own, you will need to pay a Magento developer to set up the online store to your specifications.
These developers charge between $65-150 an hour. The total cost will depend on how extensive the work will be— for instance, migrating an entire existing website over to Magento from another platform will take quite a bit of time.
In addition, a Magento theme will add to the price tag. Pre-made themes cost between $17-400. If you decide to go with a custom theme, the cost will be $600-25,000, with the average being $5,000.
Extensions and add-ons can also increase the cost. While there are thousands available for free or under $30, they can cost up to $2,000.
All-in-all, when third-party expenses are considered, the Magento Open Source Plan typically costs a minimum of $15,000.
|Domain||$10-$20 per year|
|Web Hosting||$10-$30 per month|
|SSL Certificate||$200-$600 per year|
|Magento Developer||$65-$150 per hour|
|Magento Theme||$17-$25,000 ($5,000 average)|
|Extensions/Add-Ons||$0-$2,000 per item|
The second tier is Magento Commerce. This plan adds extra features, technical support, and security to the elements of Magento Open Source.
Magento Commerce Features
Magento Commerce offers all of the features included with Magento Open Source plus the following built-in additions:
- Business Intelligence Dashboards
- Business-to-Business (B2B) Functionality
- Page Builder
- Advanced Marketing Tools
- Content Staging and Preview
- Customer Loyalty Tools
- Visual Merchandising
- Product Recommendations
- Customer Segmentation
Magento Commerce also includes web hosting. This service features fast page loading with CDN (Content Delivery Network), enhanced security, and performance monitoring tools.
The Commerce tier also offers technical support.
Magento Commerce Pricing
The Magento Commerce tier is priced on a sliding scale based on average gross sales revenue.
|Average Gross Revenue Sales||Magento Commerce Price|
|< $1,000,000||$22,000 per year|
|$1,000,000 - $5,000,000||$49,000 per year|
|$5,000,000 - $10,000,000||$25,000 to $350,000+|
|$10,000,000 - $25,000,000||$75,000 per year|
|>$25,000,000||$125,000 per year|
While Magento Commerce provides some of the features that an Open Source subscriber would have to pay a third party to access, it does not include web hosting.
Magento Commerce Cloud
Commerce Cloud is the highest price tier Magento offers. In addition to all of the features of Magento Commerce, Commerce Cloud includes web hosting by Amazon Web Services as well as several premium features.
Magento Commerce Cloud Features
In addition to all of the features included with Magento Open Source and Commerce, Commerce Cloud adds the following perks:
- FastlyⓇ WAF (Web Application Firewall)
- Fastly Image Optimization and CDN
- Blackfire Profiler performance testing
- Automatic data backup
Magento Commerce Cloud Pricing
Like the Commerce package, Commerce Cloud pricing is based on average gross revenue sales.
|Average Gross Revenue Sales||Magento Commerce Price|
|< $1,000,000||$40,000 per year|
|$1,000,000 - $5,000,000||$55,000 per year|
|$5,000,000 - $10,000,000||$80,000 per year|
|$10,000,000 - $25,000,000||$120,000 per year|
|>$25,000,000||$190,000 per year|
Which Tier Is Right for Your Business?
As you can see, there is a vast difference between each of Magento’s tiers. Which tier works best for your business will depend on what your business needs from its online store.
The Open Source plan is best for small businesses new to ecommerce or looking to migrate small online stores from another platform. Open Source offers an array of impressive features that will kick off a small business’s online sales with a bang.
The Commerce package is best for medium-sized businesses, B2B firms, and any company with multiple product catalogs and heavy website traffic. It is also ideal for companies that intend to expand in the near future.
The Commerce Cloud option is best for large businesses that require 24/7 support for international clientele but don’t want to bother hosting their websites in-house.
Closing Thoughts and Resources
The three Magento pricing tiers offer a varied list of features, making each tier ideal for a different kind of company.
Click here to see how to build a Magento website. For more information on the importance of ecommerce and tips on digitizing your business, check out this article.
If you plan to start a new business, here are some additional resources you may find helpful: