Since the dot com boom, e-commerce has meant big business for all involved. Amazon, eBay, and Etsy all used the technology to their advantage, while PayPal, Stripe, and Shopify have positioned themselves as integral components to the fabric of the internet, providing services that make buying and selling on the internet simple and frictionless for the shopper and the merchant.

If you are considering setting up your own e-commerce offering, there is a lot you need to consider, and this Refcard will help you navigate these options. You should first gather the requirements for your online store and decide which features are essential. From there, build or buy decisions will become clearer. Alternatively, you may be looking to build your own platform for others to use; if that's the case, this will act as a resource, highlighting the necessary steps involved.

This Refcard is broken up into five key sections: 

1. Build or buy – an overview of common approaches to building e-commerce applications
2. Overview of e-commerce architectures – a high-level view of various components of the e-commerce system
3. Utilizing third-party services – an examination of third-party services that can be used to create hybrid e-commerce offerings focused on payment services, chatbots, and recommendation engines
4. APIs for e-commerce platforms – an assessment of five APIs provided by the most popular e-commerce solutions
5. Open-source alternatives – a list of several open-source e-commerce solutions that allow the flexibility and freedom to deploy your own service

There are three main options available that include using an existing off-the-shelf solution, taking parts from existing services to build a hybrid offering, or taking the leap to building it all yourself. The table below will help you balance the pros and cons of each approach:

Table 1

Of all the options listed above, the DIY option is by far the riskiest if you are building an offering that you expect to scale. As well as all the functional considerations, the non-functional requirements, such as security and scalability, become critical.

As you are building something that deals with cash, expect your system to get the attention of hackers. Make sure to put a significant amount of investment into securing your system and make frequent penetration tests part of the product development cycle once the initial implementation is built.

Any e-commerce system is composed of multiple complex parts. Each module is focused on either the shopper or the merchant. The following diagram looks under the hood of a typical e-commerce platform, highlighting both the functional and non-functional requirements:

Figure 1

Below is an overview of the functionality provided by each component.

Merchant functionality:

• Inventory management – A central system where all stock is added. This is the place where you will add products, categories, and groupings to manage transactions like sales and discount codes. This will be supported by a database and potentially file storage in the back end, and will need to provide a user interface for the merchant. It will also be essential to incorporate search engine optimization (SEO) into the catalog to increase your store's chances of success. 
• Order management – As orders are made by customers, they will need to be managed between different states from: Received > Processing > Dispatched > Shipped. The customer will also need to be provided with tracking information for their shipment. Finally, this will need to be equipped to handle returns. As orders move to processing, inventory will also need to be updated.
• Business intelligence and analytics – To ensure a store's success, the merchant must have access to in-depth analytics related to product performance and customer behavior. By integrating a good analytics solution into your system, you will be able to understand behavior such as cart abandonment.
• Customer relationship management (CRM) – The CRM tool will deal with email, newsletters, and outreach to your shoppers.
• Billing and invoice system – Once orders have been placed, this system is responsible for generating and sending invoices and receipts to the customer.

Shopper functionality:

• Product catalog – The listing of products for the shopper to browse through and make their selections. This will present everything in your inventory, ideally displaying stock counts and rich media content. This is the most crucial part of any e-commerce system and must have intuitive, responsive search as well as sensible category breakdowns.
• Shopping cart – As the user selects items, they will be added to a shopping cart or basket. The best shopping cart interfaces make it clear how many items have been added and allow quick previews of cart contents.  
• Checkout – When the shopper wants to complete their order, they will go through a checkout mechanism, providing their address and payment details. As such, it's crucial that this is completely secure. It is here that you will need to manage the application of promotional codes and discounts, and provide shipping options.
• Account management – To ensure repeat customer visits, you will want to provide the ability to create accounts. This will feed into the merchant's CRM system. 
• Chatbots – To assist the user during their shopping experience and answer any immediate questions, a chatbot interface can provide fast answers. 
• Recommendation engine – Once considered advanced, recommendations that can be made to the user based on either their own buying patterns or those of others can help sell more products.

There are a few things that you can do as a seller to improve the customer experience. Sending email notifications through the CRM when the user has a shopping cart that hasn't been checked out may prompt the customer to come back, especially if they were distracted.

Many stores infuriate users — and lose sales — by emptying the basket too soon. Make sure to have your basket as long-lasting as possible, especially with registered users. A well-implemented chatbot can be a huge advantage, giving the user contextual answers as they are viewing a particular product.

Technical Components

Some of the following components may not apply if you adopt off-the-shelf or hybrid approaches. However, it is worth being aware of how they can contribute to your system architecture, the three main parts of which will be your database to store any information, a load balancer to manage network traffic at scale, and an API layer to enable others to use your system.

• Database – Every e-commerce system is really a set of services running over a database server. While traditional approaches have centered around relational databases such as PostgreSQL and MySQL, it is more common to see these used for the management of transactions. Modern stores tend to rely on document databases such as MongoDB, DynamoDB, and Redis, which are used to power the product catalog and gather aggregated data for merchant reporting.   
• Load balancer – A single server approach will never work as a long-term solution. For any platform that expects to achieve scale and wants to remain resilient, particularly during sale events, integrating a load balancer into your system architecture is essential. Load balancing will distribute traffic evenly across your servers and also eliminate any points of failure.
• API – Adding an API layer around your system can be useful if you want to create a platform or marketplace that is used by other merchants, allowing them to use your underlying infrastructure at a price. This is not a small undertaking and will require dealing with security concerns, providing access tokens, and dealing with more vectors for hackers and denial-of-service attacks.

Security and Compliance

As a system that operates with both personal information and payments, security has to be one of the core considerations. At a minimum, your site will need to run securely with a Transport Layer Security (TLS) certificate active on the site. You should use the OWASP Top 10 security risks list to identify and address some of the most common risks for your application. Following this, it makes sense to run an independent penetration test against the system to find any other potential weaknesses or vectors of attack.

The system will be processing personally identifiable information (PII), so you will need to be particularly aware of data breaches. Additionally, if you are processing payments or storing card details, you will need to be familiar with Payment Card Industry (PCI) security standard requirements. You should consider the creation of a data privacy framework to ensure the protection of this sensitive and valuable information and run a privacy impact assessment for the system.

If the site operates in the European Union, you will need to ensure compliance with the General Data Protection Regulation (GDPR), which sets out rules on how personal data should be processed and grants EU citizens more rights and control over their own data.

Now that we have outlined core components of the system, let's look at how each part might be implemented using existing services available. Note that for complete implementations, you might want to skip this section and move to the "Paid e-Commerce Platforms" part of this Refcard. This list is by no means exhaustive but looks to capture the most popular solutions available. All services listed have a developer API available, meaning that integration between systems is possible.

You'll find that some of the categories listed earlier are not covered here. Order management, product catalog, and shopping cart are the core services provided by the larger e-commerce platforms and separating out those services does not make huge business sense.

Another example is account management for customers. In all three cases, if you weren't using a central e-commerce system, you would likely build them yourself, powering it all through a database, which is a caveat of hybrid architectures; unless you're willing to build some parts from scratch, you'll need to consider one of the large e-commerce players.

Billing and Invoice Systems

For both the shopper and merchant sides of the business, a single service can suffice, managing everything from checkout to billing and invoicing. The services listed below are considered the premium players in online payments and provide numerous permutations of services and integrations. In the case of all the services listed below, payment details are stored by the provider, reducing risk and exposure to fraud.

Table 2

Checkout Services

The following services provide a simple checkout button for payment, leaving billing and invoicing to partner integrations, or for you to build yourself. These systems are perfect when you want to leave all card details outside of your system.

Table 3

Inventory Management

The following services help in managing store inventory and orders, as well as providing the product catalog for shoppers. Standalone inventory management systems are rare, with this being the core selling point of larger e-commerce systems.

Table 4

Business Intelligence and Analytics

The following services are proven to give business owners better insight into what their customers are doing when visiting their website:

Table 5

CRM Systems

The following CRMs are considered leaders in the business. As such, they have integrations into the most popular e-commerce systems and typically provide great API capabilities.

Table 6

Chatbots

The following table contains several Chatbots from prominent players:

Table 7

Recommendation Engine

Below lists an industry-leading recommendation engine:

Table 8

If the prospect of building an entire e-commerce application appears daunting, but you still want to maintain some creative control, there are a number of approaches that you can take. Using SDKs and APIs, you can integrate with existing platforms, saving yourself infrastructure headaches. Rather than needing to build your own infrastructure for an e-commerce application, you can leverage a number of different APIs and SDKs from established platforms. With these APIs, you can integrate and extend the built-in features of the platform.

The following chart looks at the developer API functionality that is exposed across five of the most used e-commerce platforms:

Table 9

If you wish to have the option of full control over your store without needing to consider any third-party platforms, but want to avoid building the architecture from scratch, you should investigate some open-source e-commerce libraries. It's notable that PHP has been the most popular language for open-source platforms. Along with WooCommerce and Magneto, the following are some of the most used open-source alternatives:

Table 10

This Refcard has highlighted the considerations and components of an e-commerce system, making it clear that it's far from trivial. Online shopping has never been more popular, and there are a huge variety of paid and open-source choices if you want to build your system. The gains can be great for those who roll out their own solutions; however, it is not an undertaking for the risk-averse with the associated security and data privacy concerns. A hybrid approach is likely to suit most entrants, with each of the major platforms offering customizations to differentiate your store from the competition.