July 12, 2012, 2:46 PM

A French open source software specialist woos U.S. e-retailers

PrestaShop already powers about 6,000 U.S. e-commerce stores, and wants more.

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France-based e-commerce platform provider PrestaShop seeks to expand in the U.S. Having opened a Miami office in 2011, it provides software for about 6,000 U.S. e-commerce stores—roughly six times as many as last year.

“The goal is really to gain market share here as we did in lots of countries,” says PrestaShop co-founder and CEO Bruno Lévêque.  Globally, the company says it powers more than 125,000 online stores in 150 countries.

PrestaShop’s sales have tripled since 2010; this year it expects revenue will exceed $8 million. Its financial health also received a boost last September from venture capital firm Serena Capital, which invested 3 million euros, about $4.1 million at the time, in PrestaShop. The company has 85 employees in Europe and 15 in the United States.

With its free, open-source code—meaning web developers can create and share their own custom features or tweak the existing ones themselves—PrestaShop competes directly with Magento’s free, open-source Community Edition software. PrestaShop’s version includes catalog management and a customer loyalty module for awarding points to repeat customers. It can also handle multiple currencies and payment methods.

PrestaShop also offers a hosted, software-as-a-service version of the software available for a monthly fee, which in September will be a flat rate of $50 per month instead of the current pricing that equals 2% of a client’s revenue, Lévêque says. The SaaS version comes with extra support and automatic downloading and installation for add-on modules from its marketplace. It also has a few extra features to help small merchants with such tasks as creating catalogs, search engine optimization and selecting shipping providers.

While the for-sale software increasingly contributes to PrestaShop’s revenue, the company makes most of its money with its industry partners, who pay to have functions around their products built into the base software, and by selling add-on modules with extra features and functions in its marketplace.

For instance, PrestaShop works with such payment service providers as PayPal Inc. and Authorize.net to build applications directly into the base version of the software. Any retailer that starts on PrestaShop today will automatically have PayPal features available for its site, including PayPal Checkout, Express and built-in refunds for returns.

Retailers can choose from more than 2,000 templates and 275-plus feature add-ons in the PrestaShop marketplace to customize their e-commerce stores. Additionally, more than 300,000 developers in PrestaShop’s online forum create their own add-on modules, such as an application to export an e-commerce store’s accounting records to Intuit Inc.’s QuickBooks program.

Developers can share their modules for free or sell them in the marketplace, in which case PrestaShop takes a 30% cut of profits. Developers sell modules for anywhere from a few dollars to hundreds of dollars, depending on their functions and complexity. Merchants pay a one-time fee for the modules, which are typically licensed for the particular version of PrestaShop software they are running. Developers may or may not update their modules to continue working in newer versions.

E-commerce services firm Business Tech makes most of its revenue by selling modules it develops on PrestaShop, says CEO David Niry, and also earns fees for helping clients run e-commerce sites on the platform. “Open source is something that’s definitely a requirement for us,” he says. “One of the main things that seduced us to PrestaShop was that it’s accessible to many new developers. It’s fairly easy to start building applications and modules.”

Business Tech sells 15 modules on the marketplace, averaging 10 sales a day. One of its bestselling modules allows retailers to build a shop tab on their Facebook pages. It costs 69.90 Euros, or about $85, Niry says.

Niry says his team often coordinates with PrestaShop to develop modules. As well as more general advice, PrestaShop occasionally passes along ideas merchants have requested that it might not have the time to build itself. “It is a strategic advantage to have a lot of people building functionality,” Niry says. For example, a retailer in Brazil should be able to find a Brazilian payment system for her shop, he says, because someone in the community is likely building one.

Paula Slof runs her year-old online retail shop, Paula & Chlo Handbags, on PrestaShop. After trying two platforms that did not please her, Slof found PrestaShop at the suggestion of her programmer, who uses the vendor to run her own agency, which helps clients operate e-commerce sites.

“It can grow with me,” Slof says. “We’ve only had it about three months, but it’s been fantastic and already we are making changes because there are so many options out there.” She bought a search engine optimization module for about $99 as well as a few more expensive add-ons, she says, leading to an increase in her natural search rankings.

“They’re easy to work with and you don’t need to be a computer genius to figure this out,” Slof says. “I can’t say you need to have a programmer—I just know for myself I needed to have someone to do that part of it for me. Because I had someone so good, this has been a really easy process.”

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