June 6, 2007, 12:00 AM

E-commerce platforms created in house dominate the e-retail landscape

And most e-retailers are looking to change platforms this year, according to Jupiter Research. One retailer, Kazoo & Co., exemplifies the state of platforms today.

The majority of web merchants use custom-built, in-house e-commerce platforms-it’s the dominant way retailers are performing commerce and managing technology. At the same time, a majority of e-retailers are looking to change their platforms this year.

These are the conclusions of recent research presented by Patti Freeman Evans, a retail analyst at Jupiter Research, at the Internet Retailer 2007 Conference and Exhibition June 5. In an educational session titled “Be in the Driver’s Seat When Choosing an E-commerce Engine,” Freeman Evans added, when it comes to building in house vs. buying technology, “There aren’t too many platform vendors out there that offer serious options for everything an e-commerce platform needs to do.”

When it comes to making a platform change this year, Diana Nelson, CEO of toy retailer Kazoo & Co., who also spoke during the session, is in the middle of reviewing e-commerce platform vendors and other options. She launched the company’s web store in 1999 using the Yahoo Stores platform, which she still uses today. Her company brings in about $2 million to $3 million a year. One problem Nelson is finding in her current search, she said, is that most e-commerce platform vendors’ products are geared toward e-retailers that make more than $10 million.

What’s more, when it comes to the cost of vendor products, “If you’re only doing $2 million to $3 million a year, you’re not going to be writing a check for $300,000 or more for a platform from a vendor,” she added. Freeman Evans concluded: “And that’s why so many smaller retailers are still building and maintaining their e-commerce platforms in house.”

Nelson still is on the hunt for an end-to-end vendor-produced platform at the best price, though, and said she needs one implemented no later than September, especially in advance of the holiday season. “Once the fall hits and we near the holidays,” she added, “we can’t be changing anything.”

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