Many small and medium sized businesses have found that working through an Application Service Provider or ASP (hosted and managed shopping cart software), removes the hassles that are standard in managing an online store or shopping cart. Furthermore, it is now accepted that outsourcing this function will not only benefit a businesses bottom line, but also enables merchants to spend less time sorting out technology problems, leaving them more time to concentrate on the important matters of running and growing their business.

An ASP means all data and applications are hosted, controlled, upgraded constantly and maintained at a facility other than the customers site where data can be accessed securely via the internet. By outsourcing Small to Medium Enterprise's (SME's) e-commerce solution to an ASP, the need to own costly equipment is removed and reliability is increased by having access to 24/7 technical expertise. To the person sitting behind the computer, there is no obvious difference to what they would see on their screen

There are numerous advantages available for SMEs by outsourcing to an ASP:

You no longer have to purchase and maintain your own servers, hosting room, virus protection, back up's or security systems (this is all taken care of by your ASP), this will remove overheads normally associated with internal IT systems

An ASP generally offers the option of subscription, as opposed to purchasing for thousands of dollars for anything decent.

Financial benefits from the conversion of high-tech capital intensive expenses into predictable, fully tax-deductible, monthly pricing plans. This levels out the peaks and troughs of IT expenditure

The responsibility of managing the infrastructure is removed (the ASP assumes full responsibility of the IT system)

Remote access, network security and high disaster recovery solutions equal to that required by financial institutions are just some of the other services offered

The major and most overlooked advantage of using as ASP is the sheer expense they have gone to in setting up strong infrastructure and recovery system. In the worst case scenario, you will generally be back online the same day with all your site content including orders and products still in your shopping cart.

There are few downsides to this model. Outsourcing your online store to a specialist and reputable provider is certainly something worth investigating, from a cost, efficiency and security perspective. If all aspects are taken into account, you will almost certainly find that setting up a shopping cart using a boxed or non ASP solution is far less cost effective and time consuming for your business not to mention frustrating!

So where does this leave us? In my opinion, a hosted ecommerce solution is a better business model if you plan to develop and market your business for success. The software you choose is vitally important so make sure you research both free shopping cart providers and paid ones as the free softwares are really coming into play since advertising can account for strong revenue these days if there enough people interested in a product.

Happy hunting