Headless commerce is a popular tactic among retailers, and for good reason: a headless commerce platform has enormous potential for your business. Headless commerce separates the front and back ends of your platform, dividing your website from your commerce platform. Behind the scene, a modern API-based platform is used so that, retailers have more flexibility and integrations are simple. These are just a couple of the reasons so many businesses are taking this path.
Some businesses might be concerned about the cost of implementing a headless commerce architecture. After all, keeping costs low can increase your profitability. But in most cases, the benefits of an API-based platform will make your investment 100% worth it.
If you’re trying to decide whether you should get started, keep reading to learn more about what this type of platform actually costs.
Calculating the true cost
Your ROI, or return on investment, is an important metric to know—by calculating this number, you can track your implementation success over time and learn how efficient your investments are.
To calculate ROI, use the following formula:
ROI = (total revenue - total investment) / total investment
What’s considered a “good” ROI? The answer to this question will vary depending on the industry and other factors. While an ROI of 5% might be a win for some businesses, other companies may shoot for a much higher percentage. In general, the higher your ROI, the better.
Once you know your ROI, you’ll be able to gauge how successful your implementation is and see where you might need to consider changes. Knowing your ROI can help you make decisions about hiring new employees, investing in new strategies, and making other choices about how to run your business.
How to calculate your return
Implementing an API-based commerce platform has several benefits. Retailers who choose to utilize a headless approach can differentiate themselves from other businesses by offering new and unique shopping experiences. Customer-facing technology can be leveraged to delight customers and increase sales. By using a best-in-class CMS, for example, retailers can expect more visits to their website and more conversions.
Calculate metrics such as lifetime customer value and total revenue to learn more about whether your approach is working:
These metrics can help inform future decisions you make for your business.
Four factors to consider when evaluating the cost of an API-based commerce platform
As you calculate the total costs of your API-based commerce platform, you’ll need to include the following basic costs:
- Subscription costs (features, storage, maintenance, etc.)
- Service fees
- Third-party purchases (other licences or integration)
- Operational costs (key employees to manage the platform, training, processes, integration, testing, etc.)
Outside of these base expenses, there are four other primary factors you should consider.
Lower development costs
Choosing an API-based platform can ensure that you get the most value for your money. API-based platforms are extremely flexible, meaning they can integrate with your current platforms (and other third-party platforms) without much trouble. You may find that it’s more productive to use APIs instead of trying to develop applications in-house.
Faster go-to-market
A headless commerce system separates the front and back ends. This model leads to more efficient workflows. With an API-based platform, developers are able to work on multiple components of the program at the same time. This means they can work more efficiently and complete many tasks simultaneously. Thanks to these improved workflows and faster turnaround times, jobs such as performance fixes or platform upgrades will go quickly and smoothly.
Operating a legacy system
When considering what an API-based commerce platform might cost, you can’t just focus on the upfront costs—you need to think about the future, too. It’s essential to continue meeting your customers’ expectations year after year. To keep up with your competitors, your business needs to constantly evolve and improve, and that means you’ll need to both maintain and upgrade your system. Don’t forget to factor in these ongoing costs as you calculate what you might have to spend on your new flexible commerce platform.
Better use of IT resources
Work smarter, not harder, by figuring out the best ways to use your resources. IT resources—software, technical knowledge, equipment, networks, and more—are either owned or used by your company. Brainstorm the best ways to allocate these resources so you can avoid doing work that carries no business value.
Learn more about headless commerce
For more information on headless commerce and its benefits, check out our case studies:
These case studies detail how Orckestra’s system helped IGA and Thrifty Foods offer a more advanced online shopping experience and increase revenue. A headless approach has a lot of benefits for retailers; it allows you to offer unique shopper experiences, provide extra convenience with omnichannel order fulfillment, and have the flexibility to integrate with other platforms.
You’re also welcome to get in touch with us at any time to learn more about Orckestra’s headless commerce platform and how it might benefit your business. Headless commerce is a valuable tactic that has helped many retailers succeed.
