{"id":24661,"date":"2023-04-21T12:40:08","date_gmt":"2023-04-21T12:40:08","guid":{"rendered":"https:\/\/www.revuze.it\/blog\/?p=24661"},"modified":"2023-04-21T12:40:08","modified_gmt":"2023-04-21T12:40:08","slug":"make-or-buy-decision","status":"publish","type":"post","link":"https:\/\/www.revuze.it\/blog\/make-or-buy-decision\/","title":{"rendered":"Make-Or-Buy Decisions: Figuring Out What Works Best for You"},"content":{"rendered":"<p><span style=\"font-weight: 400;\">While ecommerce is online-based, some brick-and-mortar principles must be taken into consideration. One of the most common ones is the make-or-buy decision, providing food for thought for businesses in the past decades. Learn what it means, and how to decide if you should make or buy.<\/span><\/p>\n<p><span style=\"font-weight: 400;\">It\u2019s an old-time dilemma in manufacturing &amp; traditional industries.<\/span><\/p>\n<p><span style=\"font-weight: 400;\">When you need a part, do you make it or buy it?<\/span><\/p>\n<p><span style=\"font-weight: 400;\">This question pops up in situations where you need a part and have two options for how to obtain it:<\/span><\/p>\n<ul>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">To create, manufacture or otherwise make a needed part yourself.<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">To purchase the needed part from another party.<\/span><\/li>\n<\/ul>\n<p><span style=\"font-weight: 400;\">Now you might be thinking, this doesn\u2019t seem relevant to the world of ecommerce. What\u2019s going on here? ????<\/span><\/p>\n<p><span style=\"font-weight: 400;\">Let\u2019s start with this pressing question, then.<\/span><\/p>\n<h2><b>How are make-or-buy decisions relevant to ecommerce?<\/b><\/h2>\n<p><span style=\"font-weight: 400;\">This decision-making process can be applied in places other than manufacturing.<\/span><\/p>\n<p><span style=\"font-weight: 400;\">Make-or-buy decisions can potentially affect all purchases of a business, whether they know it or not.\u00a0<\/span><\/p>\n<p><span style=\"font-weight: 400;\">If you\u2019ve purchased antivirus software for your computers, you\u2019ve made a decision to <\/span><b>buy<\/b><span style=\"font-weight: 400;\"> it.<\/span><\/p>\n<p><span style=\"font-weight: 400;\">If you\u2019re printing your shipping labels in-house, you\u2019ve decided to <\/span><b>make<\/b><span style=\"font-weight: 400;\"> them.<\/span><\/p>\n<p><span style=\"font-weight: 400;\">While these are easy picks to make, sometimes you run into situations where the choice isn\u2019t so easy to make. Here\u2019s a quick look at some of them.<\/span><\/p>\n<h2><b>What are some situations in ecommerce that might force a make-or-buy decision?<\/b><\/h2>\n<p><span style=\"font-weight: 400;\">It\u2019s all well and good to talk hypotheticals, but we need real examples to set the ball rolling here.\u00a0<\/span><\/p>\n<h3><b>Using an ecommerce platform<\/b><\/h3>\n<p><span style=\"font-weight: 400;\">When you\u2019re starting out on your ecommerce journey, one of the first things you ask yourself might be \u201cWhere am I going to host my store?\u201d<\/span><\/p>\n<p><span style=\"font-weight: 400;\">There are plenty of pre-existing platforms out there. Amazon, eBay, and Etsy, to name but a few. You could quite easily set up shop there, pay them hosting fees, and conform to their guidelines.\u00a0<\/span><\/p>\n<p><i><span style=\"font-weight: 400;\">Or.<\/span><\/i><\/p>\n<p><span style=\"font-weight: 400;\">You could create your own custom website, tailored to your specific idea of how you want your shop to look, and run it yourself.<\/span><\/p>\n<p><span style=\"font-weight: 400;\">Both options have their pros and cons. Creating your own website will come with higher degrees of flexibility, zero hosting fees, and no restrictions on what you can and cannot do.<\/span><\/p>\n<p><span style=\"font-weight: 400;\">On the other hand, you\u2019d need to create your website from scratch, maintain it, and host its servers yourself.<\/span><\/p>\n<p><span style=\"font-weight: 400;\">It\u2019s a tough decision to make and largely depends on your resources, size, and technical know-how. For newcomers, it might be best to test the waters with the big players out there, giving you a feel of the process. Later on, once you need the flexibility and feel like you\u2019re up to the task, you can spread your wings and create your own store.<\/span><\/p>\n<h3><b>Website creation<\/b><\/h3>\n<p><span style=\"font-weight: 400;\">To carry on from the example above, it\u2019s worth mentioning the decision that you make when you\u2019re creating a website. Let\u2019s say you made the choice to go with your own website, and now you\u2019re looking for how to make one.<\/span><\/p>\n<p><span style=\"font-weight: 400;\">There are a couple of options:<\/span><\/p>\n<ul>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">Have your team create one themselves.<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">Hire an outside professional to create it for you.<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">Use a website template as a middle ground.<\/span><\/li>\n<\/ul>\n<p><span style=\"font-weight: 400;\">Your choice will naturally be influenced by your available on-staff expertise and your team\u2019s workload. On top of that, you\u2019ll need to consider where and how to use your limited human resources.<\/span><\/p>\n<p><span style=\"font-weight: 400;\">Of course, there\u2019s also the factor of cost.\u00a0<\/span><\/p>\n<p><span style=\"font-weight: 400;\">Hiring a professional might get you there faster and easier, but it can prove more expensive compared to an in-house job.\u00a0<\/span><\/p>\n<p><span style=\"font-weight: 400;\">Make or buy it, then? Yeah, the answer isn\u2019t so simple.<\/span><\/p>\n<h2><b>Make-or-rent decisions<\/b><\/h2>\n<p><span style=\"font-weight: 400;\">One important factor to note about ecommerce is that due to the nature of going digital, some costs will be recurring, rather than flat. Think subscriptions, monthly fees, etc.<\/span><\/p>\n<p><span style=\"font-weight: 400;\">It might be appropriate to rename the dilemma to <\/span><b>make-or-rent<\/b><span style=\"font-weight: 400;\">, but that doesn\u2019t quite have the same ring to it, now does it?<\/span><\/p>\n<p><span style=\"font-weight: 400;\">The ultimate point is that you shouldn\u2019t be put off by the high initial costs of <\/span><b>making<\/b><span style=\"font-weight: 400;\"> if you\u2019re getting a forever asset out of it, compared to an initially low-cost <\/span><b>buying<\/b><span style=\"font-weight: 400;\"> (or renting\/subscribing) decision that will only get more expensive as time goes on.<\/span><\/p>\n<p><span style=\"font-weight: 400;\">On the flip side, some assets need constant updating and as such might be cheap to make, but wouldn\u2019t be nearly as cheap to maintain as if you had simply bought from a professional.<\/span><\/p>\n<p><span style=\"font-weight: 400;\">One thing to keep in mind is that these decisions aren\u2019t final. Ecommerce has flexibility that regular commerce doesn\u2019t, with assets being able to be moved in mere seconds rather than months.\u00a0<\/span><\/p>\n<h2><b>How do you decide whether to make-or-buy?<\/b><\/h2>\n<p><span style=\"font-weight: 400;\">One mistake that a lot of people make is assuming that make-or-buy decisions are solely influenced by cost.<\/span><\/p>\n<p><span style=\"font-weight: 400;\">While it\u2019s true that the cost of acquiring an asset is definitely a big factor, there are also other factors. Nominally, how well the asset will fit into your operations.\u00a0<\/span><\/p>\n<p><span style=\"font-weight: 400;\">You might think that if you\u2019re buying something it would be a perfect fit. That\u2019s a nice thought, but more than often this thought doesn\u2019t translate into reality.<\/span><\/p>\n<p><span style=\"font-weight: 400;\">This is especially the case in the world of ecommerce, where software and other pre-existing assets are often only affordable in pre-existing packets. Custom software is very expensive, with small businesses especially only having the budget for premade variants.<\/span><\/p>\n<p><span style=\"font-weight: 400;\">With that in mind, let\u2019s go through the four steps for making a make-or-buy decision.<\/span><\/p>\n<h3><b>#1 Lay out the pros\/cons of making<\/b><\/h3>\n<p><span style=\"font-weight: 400;\">The advantages of <\/span><b>making<\/b><span style=\"font-weight: 400;\"> usually include:<\/span><\/p>\n<ul>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">Lower overall cost.<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">Higher ability to tailor the asset to your needs.<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">Better customization options.<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">The ability to alter the asset in the future.<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">Easier integration into your workflow.<\/span><\/li>\n<\/ul>\n<p><span style=\"font-weight: 400;\">Meanwhile, the cons can be along the lines of:<\/span><\/p>\n<ul>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">Limited support.<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">A longer time frame for obtaining the asset.<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">Requiring employees with this expertise.<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">Non-standard code (if software-based).<\/span><\/li>\n<\/ul>\n<p><span style=\"font-weight: 400;\">These might not be strictly true in all cases, however they generally hold true.\u00a0<\/span><\/p>\n<p><span style=\"font-weight: 400;\">Now, you might have a question about the last con we mentioned, that of non-standard code. Let\u2019s break down why that might be a problem.<\/span><\/p>\n<p><span style=\"font-weight: 400;\">While companies that create software might enforce standards, a freeform in-house creation will do anything that it needs to in order to get the job done.<\/span><\/p>\n<p><span style=\"font-weight: 400;\">This might sound like a good thing, but it may make the code highly difficult to interpret by anyone else. This means if the particular employee or group of employees that wrote the code is unavailable, it will be more difficult for anyone else to work with it.<\/span><\/p>\n<h3><b>#2 Lay out the pros\/cons of buying<\/b><\/h3>\n<p><span style=\"font-weight: 400;\">Buying an asset generally comes with:<\/span><\/p>\n<ul>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">A more standard code base (if software-based).<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">Greater support.<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">Speedier acquisition.<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">A more professional look.<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">A guarantee or warranty.<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">The ability to use assets outside of your area of expertise.<\/span><\/li>\n<\/ul>\n<p><span style=\"font-weight: 400;\">On the other hand, you have:<\/span><\/p>\n<ul>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">Higher costs.<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">Fewer customization options (unless you\u2019re willing to pay more).<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">Inability to change the asset without going back to the manufacturer.<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">Possible difficulties integrating with other areas of your business.<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">Potentially having to purchase other assets to keep this one running.<\/span><\/li>\n<\/ul>\n<p><span style=\"font-weight: 400;\">As mentioned before these aren\u2019t always the case, but as a general rule of thumb, they\u2019re something to look out for.<\/span><\/p>\n<h3><b>#3 Decide which factors are your priority<\/b><\/h3>\n<p><span style=\"font-weight: 400;\">As mentioned earlier, it\u2019s not all about cost. Sometimes you want to have a better asset, even when you have to pay more money for it. So, what <\/span><b>is<\/b><span style=\"font-weight: 400;\"> the right way to choose? Well, it\u2019s all about priorities.<\/span><\/p>\n<p><span style=\"font-weight: 400;\">Whenever you purchase an asset, you do it for a reason. That reason should form the basis of your decision.\u00a0<\/span><\/p>\n<p><span style=\"font-weight: 400;\">Say you were looking for software to track your sales and log the information. The purpose behind that would be to make your admin easier.\u00a0<\/span><\/p>\n<p><span style=\"font-weight: 400;\">There\u2019s always a core reason. Otherwise, there\u2019d be no motive to obtain the asset in the first place.<\/span><\/p>\n<h3><b>#4 Make a choice based on the available information<\/b><\/h3>\n<p><span style=\"font-weight: 400;\">Once you\u2019ve got your priorities in your mind, and the pros\/cons listed, it\u2019s time to compare them.<\/span><\/p>\n<p><span style=\"font-weight: 400;\">Ultimately, cost can be a limiting factor only in these decisions. It\u2019s not just about what\u2019s the best option, but what\u2019s the best option that you can <\/span><b>afford<\/b><span style=\"font-weight: 400;\">. At this point, you should strike off any options you can\u2019t find the budget for.<\/span><\/p>\n<p><span style=\"font-weight: 400;\">Once you\u2019ve eliminated the impossible, whatever remains is what you can realistically use. From there, you should apply your priorities to decide which of the remaining options best fits your needs, and select that one.<\/span><\/p>\n<p><span style=\"font-weight: 400;\">Simple, straightforward, easy.<\/span><\/p>\n<h2><b>Wrapping up<\/b><\/h2>\n<p><span style=\"font-weight: 400;\">Hopefully, you\u2019ve learned something about make-or-buy decisions today, and have come away feeling more confident in your ability to make them.<\/span><\/p>\n<p><span style=\"font-weight: 400;\">While you\u2019re here, why not check out our <\/span><a href=\"https:\/\/www.revuze.it\/blog\/e-commerce-personalization\/\"><span style=\"font-weight: 400;\">guide to ecommerce personalization<\/span><\/a><span style=\"font-weight: 400;\">, and use the principles you\u2019ve learned here to decide if it\u2019s right for you.<\/span><\/p>\n","protected":false},"excerpt":{"rendered":"<p>While ecommerce is online-based, some brick-and-mortar principles must be taken into consideration. One of the most common ones is the make-or-buy decision, providing food for thought<\/p>\n","protected":false},"author":29,"featured_media":24662,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"inline_featured_image":false,"footnotes":""},"categories":[1],"tags":[],"acf":[],"_links":{"self":[{"href":"https:\/\/www.revuze.it\/blog\/wp-json\/wp\/v2\/posts\/24661"}],"collection":[{"href":"https:\/\/www.revuze.it\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.revuze.it\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.revuze.it\/blog\/wp-json\/wp\/v2\/users\/29"}],"replies":[{"embeddable":true,"href":"https:\/\/www.revuze.it\/blog\/wp-json\/wp\/v2\/comments?post=24661"}],"version-history":[{"count":0,"href":"https:\/\/www.revuze.it\/blog\/wp-json\/wp\/v2\/posts\/24661\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.revuze.it\/blog\/wp-json\/wp\/v2\/media\/24662"}],"wp:attachment":[{"href":"https:\/\/www.revuze.it\/blog\/wp-json\/wp\/v2\/media?parent=24661"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.revuze.it\/blog\/wp-json\/wp\/v2\/categories?post=24661"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.revuze.it\/blog\/wp-json\/wp\/v2\/tags?post=24661"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}