Total Cost of Ownership (TCO)

TCO is the all-in cost of running an ecommerce platform for a year. It's the only honest way to compare platforms because the licence fee is rarely the biggest line item.

A complete TCO includes: platform licence (Shopify Plus is the licence; Magento Open Source has none but Adobe Commerce does), hosting (zero on Shopify; significant on Magento, WooCommerce, custom builds), CDN and security (bundled on Shopify; separate on most others), development cost (in-house team or agency retainer), app and plugin subscriptions, payment processing fees, integration licence fees (ERP connectors, ETL tools), maintenance and patching, and operational headcount.

Magento and Adobe Commerce often have a low licence number but high hosting, dev, and patching costs. Shopify Plus has a higher licence but bundles hosting, security, performance, and reduces dev hours significantly. WooCommerce has no licence but the plugin stack often runs $30K to $100K+ per year and dev cost scales with plugin count.

A typical mid-market brand on Shopify Plus runs at $250K to $500K annual TCO including platform, apps, and a partner retainer. The same brand on Magento usually runs $400K to $900K because hosting, patching, and dev rates are higher.

TCO comparisons are easy to game. The honest version uses real numbers from the last 12 months on the current platform and a benchmarked range from comparable brands on the destination platform. Anything else is a brochure.

Frequently asked questions

What goes into ecommerce TCO?

Platform licence, hosting, CDN and security, development, apps, payment processing, integration licences, maintenance and the internal headcount needed to run the platform.

Is Shopify Plus cheaper than Magento on TCO?

Usually. Plus has a higher licence but includes hosting, security and patching. A mid-market brand often runs $250K to $500K a year on Plus and $400K to $900K on Magento.

How do I compare TCO fairly?

Use the last 12 months of real costs on your current platform and benchmark ranges from comparable brands on the target platform. Licence fees alone mislead.

Related terms: Variable Platform Fee (VPF), Re-platforming, Shopify Plus. For hands-on help, see the Shopify Plus pricing calculator.