What is an e-commerce platform: Choosing the right one for your business in 2025

Common features of e-commerce platforms

E-commerce platforms are equipped with a wide range of features, including payment gateways for secure transactions, inventory management systems to keep track of stock, and order fulfillment tools to ensure smooth delivery. In addition, many platforms support third-party integrations, enabling businesses to connect with marketing tools, shipping services, and customer relationship management (CRM) systems.

We’ll take a deep dive below into each of these essential features and explore how they contribute to the success of online businesses.

Payment gateways

A payment gateway is a secure system that facilitates online transactions by processing payments between customers and merchants. They encrypt sensitive financial information, helping facilitate safe and seamless transfers through credit cards, debit cards, digital wallets, or other payment methods.

Many e-commerce platforms integrate with popular payment gateways like PayPal, offering businesses flexibility in accepting multiple payment options. Some platforms even provide built-in payment solutions, streamlining the setup process and reducing the need for third-party tools.

Inventory management

Inventory management tools on e-commerce platforms help businesses track, manage, and optimize their stock levels in real time. These features often include real time inventory tracking, low-stock alerts, automated reordering, and integration with multiple sales channels to ensure accurate stock counts across platforms.

When choosing an e-commerce platform, businesses should prioritize tools that support scalability, offer detailed reporting, and integrate seamlessly with their supply chain and warehouse management systems to prevent stockouts or overstocking.

Order fulfillment

Automated systems for processing and shipping orders help lead to timely delivery. Order fulfillment capabilities on e-commerce platforms streamline the process of managing, packing, and shipping customer orders. Features may include automated shipping label generation, real-time tracking updates, and integration with logistics providers like FedEx or UPS.

Some platforms also offer direct fulfillment services or partnerships with third-party fulfillment centers for hands-off management. Businesses should consider the volume of orders, delivery speed expectations, and whether they need advanced features like dropshipping or multilocation shipping support when evaluating order fulfillment options.

Integrations

E-commerce platforms often support integrations with third-party tools to enhance functionality and streamline operations. Common integrations include marketing tools for email campaigns and social media, analytics platforms for tracking performance, customer relationship management (CRM) systems for managing customer interactions, and accounting software for financial tracking.

Businesses may also need integrations with shipping providers, inventory systems, and payment gateways. When selecting an e-commerce platform, ensure that it’s compatible with tools already in use or that will be implemented, and offers scalability to accommodate future needs.

Types of e-commerce platforms

When starting or growing an online business, choose the e-commerce platform that matches your goals and technical needs. From hosted and self-hosted platforms to marketplaces and social media platforms, understanding all of the options will help you identify the top e-commerce platforms for your business.

Hosted e-commerce platforms

Hosted e-commerce platforms, also known as software-as-a-service (SaaS) platforms, provide an all-in-one solution for businesses looking to sell online. These platforms handle hosting, security, and updates, allowing business owners to focus on building and running their store. They typically feature user-friendly drag-and-drop templates, built-in tools for inventory and payment processing, and integrations with third-party apps to extend functionality.

Some examples of popular hosted platforms include:

• Shopify: Known for its ease of use, Shopify is ideal for small- to medium-sized businesses and entrepreneurs who want to start selling quickly. It supports integrations with multiple payment gateways, includes built-in analytics, and offers a large app marketplace. However, there are transaction fees unless you use Shopify Payments.² Customization beyond the provided themes may require coding expertise or premium plugins.³ Best for: Retail businesses, dropshipping, and businesses scaling to multi-channel sales.
• BigCommerce: BigCommerce offers robust built-in features, including advanced SEO tools, multi-currency support, and no transaction fees. While the editor and interface can be slightly more complex than Shopify, it’s a better choice for businesses with more extensive product catalogs or those looking to expand globally. However, its higher-tier pricing plans may not suit smaller businesses. Best for: Larger businesses or those planning for global or B2B sales.
• Wix: Primarily known for website design, Wix also provides e-commerce capabilities with its Business and eCommerce plans. Its drag-and-drop builder is easy to use, but its scalability and advanced e-commerce features, like app integrations, are more limited. Best for: Creative professionals, small businesses, or startups focused on showcasing a strong visual brand.
• Squarespace: Like Wix, Squarespace excels in design, offering sleek templates perfect for showcasing products. Its e-commerce tools cater to small businesses, but its limited app ecosystem and less extensive payment options can be drawbacks for larger stores. Best for: Designers, artists, and small retailers prioritizing aesthetics.
• Weebly (by Square): Weebly is another straightforward platform offering drag-and-drop simplicity and tight integration with Square’s payment systems. While affordable and easy to use, it lacks some advanced features, such as widget options and collaboration tools. Best for: Small businesses with simple needs or those already using Square for point-of-sale systems.

Of course, there are pros and cons to hosted platforms.

Pros of hosted platforms:

• Easy setup and maintenance with no need for hosting or security management.
• Pre-designed templates make creating an online store fast and straightforward.
• Extensive app marketplaces and integrations expand functionality.
• Ongoing updates and support included in the subscription.

Cons of hosted platforms:

• Limited customization options, and advanced changes often require coding or costly plugins.
• Monthly fees and potential transaction fees can add up.
• Dependency on the platform’s servers and infrastructure, meaning businesses may have less control.

Self-hosted e-commerce platforms

Self-hosted e-commerce platforms, also known as open-source platforms, provide businesses with complete control over their online stores. They’re ideal for businesses with unique or complex needs, such as large retailers, wholesalers, or enterprises requiring tailored solutions. They’re also suitable for tech-savvy small businesses or startups with access to development resources.

Industries like manufacturing, global retail, or B2B commerce often benefit from the advanced customization and flexibility offered by self-hosted platforms. But for businesses without technical expertise, the additional costs of hiring a developer to take care of security, technical updates, bug fixes, and maintenance may outweigh the benefits.

Some popular self-hosted platforms with the functionality to create a unique customer experience include:

• Magento: A robust platform designed for medium to large enterprises offering advanced functionality, scalability, and customization options. It supports multistore setups, global selling, and complex product catalogs and is best for large-scale or global brands with complex product offerings. Because it requires significant technical expertise and server resources, it’s less suitable for small businesses without a dedicated development team.
• WooCommerce: This plugin for WordPress is a popular choice for small- to medium-sized businesses using WordPress or that want a flexible solution with lower costs. It’s highly customizable through plugins and themes, but managing updates, backups, and security requires some technical knowledge. This platform can be a good choice for content-driven websites, small businesses, and startups with technical resources.
• OpenCart: An accessible, lightweight option offering a user-friendly dashboard and extensive extension marketplace. While it’s less complex than Magento because it doesn’t require a lot of technical expertise to set up, it still requires hosting and technical oversight for maintenance and customization. It’s best for small- to mid-sized businesses seeking a budget-friendly, customizable solution.

Types of e-commerce platforms and marketplaces

Marketplaces allow businesses to list products directly on their platforms, providing a straightforward way to start selling online. These platforms come with a built-in audience, offering immediate exposure to potential customers. This can potentially result in a higher conversion rate compared to starting from scratch with a standalone e-commerce website.

For an e-commerce platform comparison, we’ll look at popular marketplaces:

• Amazon: As one of the largest e-commerce platforms in the world, Amazon offers vast exposure and access to millions of customers. Its services include fulfillment (FBA), advertising, and advanced analytics tools, helping businesses scale quickly. However, Amazon charges a variety of fees, including referral fees (which vary by category), shipping costs, and fulfillment fees. Sellers must also contend with intense competition, as many businesses sell similar or identical products.
• eBay: Known for auctions and fixed-price listings, eBay allows businesses to sell new or used products to a diverse audience. eBay’s fees include listing fees and a percentage of the final sale price. It may beless competitive than Amazon, but businesses still face competition within their specific categories. The platform supports international sales, making it a good option for small businesses or individuals that sell unique items for niche markets and who want to expand their reach.

• Etsy: This marketplace focused on handmade, vintage, and craft products offers a targeted audience looking for unique, artisanal goods, and its fees are typically lower than those on Amazon. Etsy also provides tools for sellers to manage their storefronts and reach customers via search optimization. As Etsy’s audience is more niche, businesses selling mass-produced or mainstream items may struggle to gain traction.

While these platforms simplify the selling process, the fees and commissions can impact profit margins. Businesses that want more control over their branding, pricing, and customer relationships may prefer to explore other options instead.

Social media platforms

Social media platforms like Facebook, Instagram, and TikTok have become essential tools for e-commerce, transforming the way businesses interact with consumers and sell products. While they can provide a wide reach and deliver users with a seamless shopping experience, you should also expect fierce competition, murky algorithm changes, and limited control over branding.

Here’s what you need to know about each platform.

Facebook: As one of the pioneers in integrating e-commerce with social media, Facebook boasts a large user base of 3 billion monthly active users.⁴ It can be integrated with other Meta-owned platforms for streamlined operations.

Its key features include:

• Facebook shops: A customizable storefront within the platform where businesses can display and sell products. This feature is integrated with tools like Messenger and WhatsApp, enabling seamless customer communication.
• Marketplace: This peer-to-peer selling space has evolved into a significant channel for both small businesses and individuals to connect with buyers locally or internationally.
• Ads and targeting: Facebook’s robust advertising platform uses detailed audience targeting, allowing businesses to reach specific demographics, behaviors, and interests.

Instagram: This platform has redefined social selling by combining visual appeal with shopping features, making it ideal for fashion, beauty, and lifestyle brands willing to invest in content creation. A strong influencer culture drives organic promotion, but algorithm changes can reduce visibility for smaller accounts.

Its features include:

• Instagram shops: Similar to Facebook shops, businesses can set up online stores where users can browse and purchase without leaving the app.
• Shoppable posts and stories: Tags on posts and stories let users buy products instantly, reducing friction in the customer journey.
• Influencer marketing: Instagram is a hub for influencers who collaborate with brands to showcase products, creating authentic connections with potential buyers.
• Reels: Short-form videos provide an engaging way to showcase products, often leveraging trends to reach broader audiences.

TikTok: This platform’s rapid growth has made it a force in the e-commerce landscape, especially among younger audiences. However, its unstable regulatory environment and ongoing discussions about an outright U.S. ban has highlighted its precarious status as a long-term investment. Diversifying across other social media platforms with more stable footing may be more prudent until the long-term future of TikTok becomes clearer.

While TikTok boasts high engagement rates and has potential for viral reach, content has a shorter lifecycle due to the fast pace of trends, and audience targeting is less precise than on Facebook or Instagram.

Its features include:

• TikTok shopping: Allows brands to sell directly through videos, livestreams, and a dedicated shop tab.
• Viral marketing: The platform thrives on viral trends, with many products becoming overnight sensations thanks to user-generated content and challenges.
• Livestream shopping: Interactive, real-time sales events foster engagement and immediate conversions.

Conclusion

Choosing the right e-commerce platform is a critical decision that can significantly influence the success of your online business. From user-friendly hosted platforms to highly customizable self-hosted solutions, each option offers advantages tailored to specific business needs. By aligning platform features with your operational goals and capabilities, you can create a robust foundation for growth and customer satisfaction.

Staying competitive in the ever-evolving digital marketplace requires more than just functionality — it demands scalability, seamless integrations, and an exceptional user experience. Whether you’re a budding entrepreneur or managing a growing enterprise, the right e-commerce platform can empower your business to thrive, innovate, and stand out in 2025 and beyond.