Build it or buy it?
Weigh the upfront investment, hidden expenses & opportunity costs for your subscription platform
At a certain point in your subscription journey, your business may be faced with an important question: Should you build your own software solution to fulfill your needs, or buy an existing product from a leading vendor?
While building your own solution allows for ultimate customization, this option can also come with hidden fees for development and upkeep, as well as unforeseen opportunity costs. Meanwhile, many innovative, out-of-the-box solutions exist that can save your business time and resources—and even allow for maximum customization if they are compatible with a headless build.
The tradeoff: Their product roadmaps may not be a 1:1 match for your business growth strategy, which can impact the timeline for enabling certain features.
When making the decision to build or buy, the two most important variables to consider are control—over design, development, and other factors—and cost. Achieving the right balance between the two is crucial, yet different for every organization.
Drawing from our experience working through this decision with hundreds of merchants, this guide is designed to help you navigate the decision to build, buy, or take a hybrid approach with your subscription platform.
The choice to build or buy depends on many factors, including your organizational requirements, resources for building and maintaining systems, the state of the market, and consumer demands.
A complex decision
The decision to build or buy subscription software is typically complex and multifaceted, requiring holistically weighing the pros and cons of each option. Unless your company is facing rare circumstances—for example, you have specific business needs that cannot be compromised, and no existing software solution on the market fulfills these needs without requiring significant customization—this decision is rarely straightforward, but rather influenced by a multitude of factors.
Factors influencing the decision to build
- Attempting to meet company needs with an integration would be highly complex, requiring more time, effort, money, and other resources than would a custom development.
- The company requires complete control of the software solution.
- The company is differentiated by its strong Software Development team, which will remain with them for a long time, along with the resources and expertise to build, maintain, and support the application long term.
Factors influencing the decision to buy
- The company has little or no expertise in developing a subscription platform.
- The company does not have the resources to fund software development staff over many years.
- The company does not have the expertise to make the enhancements required to support any additional functionality needs.
- The company’s IT team does not understand industry best practices for developing and maintaining a subscription platform.
- The company has high turnover rates for software development staff.
- The company’s IT team is not prepared for the innovation required to keep up with market changes and security requirements.
Advantages & disadvantages of building vs. buying
- Ownership of intellectual property and proprietary technology (IP)
- Ownership of product roadmap and engineering resourcing decisions
- Easier onboarding and support
- Total control over infrastructure
- Total ownership of data analytics
- Requires in-depth ecommerce expertise; team must stay up-to-date with new security protocols, legal changes, and other business critical issues
- Diverts focus from organization’s core value proposition
- Requires time to develop, which can delay launch
- Difficult to scale; can rapidly become obsolete
- Risk of cost overruns; total cost of ownership is difficult to estimate
- Increasingly difficult to locate, hire, and retain top technical talent
- High-quality software that has been tested and offers proof of concept
- Quick implementation for faster return on investment
- Typically well-documented, with built-in support
- Limited liability
- Fast pace of innovation
- Predictable total cost of ownership
- Access to industry experts, niche knowledge, and best practices
- Outsourced resources and staff allow for greater focus on organization’s core value proposition
- Up-to-date with trends and market changes
- Can easily scale and adapt to evolving corporate needs
- Sticker shock around initial contract investment
- Involves dependency on an external company (vendor lock-in)
- More limited integration capabilities with other solutions
- Product roadmap decisions and timelines are owned by the solution provider, not the merchant
Key consideration factors
To determine whether you should build or buy, it’s important to analyze how each option performs in terms of functionality, support, and cost—and how well this balance fits your business.
Consideration #1: Functionality
Technology & features
Technological features impact far more than the actions your subscription platform can perform. They also play a major role in your speed to market, which can result in a faster return on your investment for your business and affect the ease of use of your solution.
To make sure you’re covered in all of these areas, start by taking stock of both your non-negotiable technology requirements and your nice-to-have features. Compare the uptime of your various solution options to what your team would be able to provide on a new build. Finally, consider the speed to market and corresponding return on investment of each option.
How does Recharge support this?
Product-driven company, built by engineers
Recharge offers a fully-staffed team of 200+ people in research and development, 150+ of whom are developers, focused solely on subscription management.
Ecommerce platform flexibility
Recharge provides technical support for subscription management, providing a flexible experience for merchants on Shopify, BigCommerce, and other ecommerce platforms.
Full spectrum of customization with the Recharge API
Merchants of all budgets can use Recharge out-of-the-box by downloading from their ecommerce platform’s app store, or can opt to build from scratch through the Recharge API, which allows for a broad range of customization levels. Our RESTful API and event-driven webhooks allow merchants to take advantage of complex integrations with technical partners or have a developer build custom integrations.
Multiple customer portal options
Recharge offers an out-of-the-box customer portal hosted on the platform. This solution, with full built-in functionality and the ability to toggle different features on and off, requires limited development resources.
For ultimate portal customization, merchants who have access to both frontend and backend developers can use the Recharge API. This option allows for full integration with third-party apps and tools, although it requires third-party hosting.
Studies show that getting technological products to market on time but 50% over budget only reduces profits by 4%. Meanwhile, getting those products to market 6 months late but on budget generates 33% less profit over 5 years.Time is Now Money: Why Time-to-Market Beats ROI as the New Indicator of Profitability (Forbes)
Partnerships & integrations
To ensure you’re making the right investment for your business, it’s key to choose a subscription management solution that can grow with you. Prioritize a flexible tech stack—this way, you can leverage existing technology on the market to scale more quickly while also tapping into the benefits of improved customer experience, enhanced analytics, and increased personalization opportunities.
If you choose to buy your subscription platform, investigate whether or not you will be able to have a true impact on the company’s product roadmap. The ability to provide feedback, suggest changes, and give input regarding updates, features, and releases can have an enormous impact on your partnerships and integrations.
How does Recharge support this?
Best-in-class technology partnerships
Recharge partners and natively integrates with dozens of best-in-class commerce applications. More than 70% of our merchants integrate with our premier tech partners to drive sustainable business growth.
Product-obsessed tech partner support
Our dedicated technology partnerships managers and Product Support team ensure that our industry-leading tech partners have the tools and support they need to build integrations with Recharge.
Integration customization with the Recharge API
If Recharge doesn’t have a partnership with the provider of your choice, our API-first approach to product development empowers you to build the integration yourself or with the help of an external agency.
Expert agency partnerships
Need extra hands with development or design? Recharge partners with a variety of expert ecommerce agencies to help you deliver frictionless subscriptions.
Analytics & forecasting
Analytics and forecasting tools are crucial aspects of a subscription management solution. These features are used to measure success and return on investment for your business while also empowering you to optimize underperforming areas.
If you’re buying an out-of-the-box solution, analytics functionalities will typically include an overview of your revenue, including revenue planning tools and a breakdown of your key performance indicators (KPIs). They can also include an overview of your customer base, performance tracking of your product SKUs and variants, industry benchmarks, customer actions tracking tools, and media attribution capabilities.
Building your own solution involves not only building the subscription platform itself, but also the infrastructure to track and analyze the performance of your subscriptions. This includes additional labor and resourcing costs in the form of data scientists and analysts, who turn this crucial information into actionable insights that can help you grow your business into the future.
How does Recharge support this?
Via the Pro and Enterprise plans, Recharge provides all merchants with out-of-the-box access to 14 key analytics dashboards to understand revenue trends, analyze how customers are interacting with their subscriptions, and compare KPIs over a specific time period.
Dashboards to support your growth
The Recharge platform offers a variety of dashboards to support your business growth, including revenue tracking, customer lifecycle and behavior tracking, product SKU or variant tracking, marketing campaign performance tracking, and more.
Real-time data from 50M+ subscribers
Drawing from our experience with over 15,000 merchants and their customers, Recharge provides data-driven, targeted recommendations for each individual merchant, including industry- and vertical-specific insights geared to increase revenue and decrease churn.
On average, organizations that invest in big data analytics see a 6% initial increase in profits.Big data: Getting a better read on performance (McKinsey & Company)
Industry expertise is an often overlooked factor in a subscription platform, yet it can significantly impact a merchant’s pace of innovation. Whether you choose to build or buy, your future success depends on being able to constantly adapt and enhance your core product to meet changing demands. That means investing in industry-experienced subject matter experts.
If you buy an out-of-the-box solution, many providers offer this expertise. By pulling in insights from the thousands of merchants who utilize their platform, these providers are able to continuously evolve to meet the collective demands of the market. This alleviates the need for your store to implement the time-intensive ongoing research and analysis required to stay on pace with current trends, allowing you to instead focus on other aspects of your business.
If you build your own solution, be sure to budget both time and resources for industry specialists that will allow you to maintain pace with your competitors. Bear in mind that if your in-house developers do not have a holistic view of the ecommerce ecosystem, your business may experience implementation barriers, as well as challenges in creating a future roadmap.
How does Recharge support this?
$10B in processing | 15,000 merchants | 50M subscribers | 180+ countries
Investing in product development & support
Recharge invests over 70% of revenue back into product development, empowering the company to provide innovative features and maintain 97% merchant retention through best-in-class support.
Providing connection through community
Recharge is full of innovators—more than 80% of subscription merchants on Shopify use the platform for their recurring offerings. The Recharge Community is free to all Recharge users, connecting the best and brightest minds in subscription commerce with the latest insights and best practices.
Supporting subscriptions of all kinds
Recharge has built over 30,000 variations of subscriptions with different purchase types (e.g. pre-paid subscriptions, one-time purchases), purchase frequencies, shipping cadences, and product types. We deploy teams to maintain compliance for a broad spectrum of subscription operations, including taxes, shipping, order fulfillment, and more.
Consideration #2: Support
Having a dependable infrastructure for your subscription platform is crucial for the financial health of your business. Any mishap may lead to complete operational disruption and hundreds of thousands of dollars in costs.
To evaluate whether or not building or buying your subscription platform will better serve your infrastructure needs, consider the following factors:
- Data privacy and security, maintaining optimum security amid ever-changing legal requirements as well as compliance with local and global privacy standards and laws
- Technical support for various teams that require knowledge and use of the platform, especially when infrastructure is not functioning as intended
- Contingency planning, establishing risk mitigation plans and protocols to protect the business, as well as as proper escalation paths when things go awry
- Maintaining, monitoring, and upgrading technology to ensure that the entire tech stack is up-to-date, works seamlessly with integrations, and is free of issues and bugs
- Hosting costs to create and maintain a website that is accessible, with minimal to no downtime
How does Recharge support this?
Designed for availability & resilience
All Recharge services are cloud-native applications running and hosted on Google Cloud Platform (GCP). Our recovery strategy leverages GCP global infrastructure by utilizing regions and zones, as well as inter-region capabilities, to achieve our recovery time and recovery point objectives.
Real-time status updates
Recharge maintains a publicly accessible status page that provides real-time and historical data on our system performance, availability, and scheduled maintenance.
Focus on site health & reliability
Recharge has more than 40 engineers dedicated to supporting our infrastructure. The Infrastructure team invests heavily in systems, processes, and servers that can quickly and efficiently scale with merchant needs. Our infrastructure is built to support merchants’ ability to make hundreds of thousands of API calls with no downtime.
We consider site loading speeds across different stages of production (including both testing sites and live web experiences), build in continuous disaster recovery environments, and create buffers for high volumes of activity. Strict service-level agreements for checkout duration times and webhook times help ensure that merchants’ stores run smoothly.
Recharge performs quarterly audits of all code base changes from our partners to ensure that systems are up-to-date and running seamlessly with any updates. The team has implemented automated monitoring for any issues and maintains processes and strict escalation policies to ensure that engineers are available 24 hours a day.
Charge processing & fraud prevention
Charge processing and fraud prevention are both integral to smoothly running a subscription commerce storefront, making them each priority factors in the decision to build or buy. Businesses who sell physical goods have additional challenges when balancing the intersection of inventory management with charge processing and avoiding payment processor errors.
Fraud prevention, too, can be a complicated and lengthy process—one that needs to be built into the subscription platform of your choice. This can be especially complex when storefronts are available to customers from countries all around the world with different fraud prevention systems. For example, with customers in the European Union, storefronts have to support 3DS secure checkout or flag subscription payments as errors.
How does Recharge support this?
Supporting global customers
At Recharge, we have full teams dedicated to maintaining reliability for merchants with a global customer base. These teams research and implement technology for new market changes, and build new technology and tools to remain compliant.
Scalable charge processing
Recharge’s Charge Processing team has built a scalable system that captures the subscription needs of our thousands of merchants and ensures that they are all optimized from a fraud prevention standpoint. Recharge’s technological solutions are built to manage payment processors, fraud protection, error codes, global customers, and more.
It’s estimated that in 2021, global ecommerce losses from online payment fraud totaled 20 billion U.S. dollars—an increase of over 14% from 2020’s 17.5 billion dollars.Value of e-commerce losses to online payment fraud worldwide in 2020 and 2021 (Statista)
Documentation, training & troubleshooting
Any subscription platform, whether bought or custom-built, requires documentation and tools to support the teams that work with it. If you choose to build, consider the amount of time and effort that will be required to develop and maintain these materials and provide your teams with proper onboarding and ongoing support. These are all necessary to keep product adoption and upkeep on track.
Your company will be responsible not only for maintaining and supporting documentation for your subscription features, but also for bug reporting and resolution, feature and bug testing, user training, security, and compliance—all of which can change and evolve in their methods over time. Additionally, you’ll need to ensure that you’re set up for a streamlined transfer of knowledge with your documentation, should your developers leave your company.
If you choose to buy your subscription platform, be sure to vet that your chosen solution offers comprehensive support, both in terms of documentation and support staff. Investigate, too, the availability of this support—are resources available 24/7, or only at certain times?
Finally, consider the processes of onboarding and incident management. Will you be set up for success from the start with the platform of your choice, and throughout your use of it? The processes for troubleshooting and training across platforms can vary, making it key to do your due diligence and ensure that your chosen solution meets your requirements.
How does Recharge support this?
Comprehensive support documentation
Recharge offers a comprehensive support database merchants can access at any time. Our over 300 Help Center articles run the gamut of topics, from shipping-related configurations to taxes to reading an analytics dashboard.
Dedicated Product Support team
Our fully-staffed Product Support team allows us to field a diverse array of requests. We offer support for requirements from various teams, including Marketing, Account Management, Security & Compliance, and more.
As merchants onboard to the Recharge platform, our Implementation team is available with key insights and process documentation to make the process seamless.
Built-in incident management
Recharge’s Incident Management team automates various quality assurance processes and deploys manual tests on behalf of merchants before any changes go through production. This helps ensure that new initiatives will not negatively impact merchants’ workflow and storefronts.
Quick responses & fresh information
Our Technical Support team has designed processes to ensure that we can address merchant needs according to specific service level agreements (SLAs) and turnaround times. As merchants scale and their needs evolve, we continuously look at how to optimize and update our APIs and SLAs to deliver ultimate value.
Data security & compliance
Configuring compliance systems to regulatory change is essential to the functionality of your business. User data breaches are public, very expensive, and erode customer trust, while applications are gold mines of sensitive, personally identifiable information (PII) like social security numbers, credit card numbers, and more. Meanwhile, security environments are constantly changing, and data hacking techniques have become supercharged with the power of cloud computing.
If you choose to build your subscription platform, you must properly build and maintain processes for data security and compliance. To do so, you must staff internally and be equipped to withstand a true hack. This requires constantly monitoring, maintaining, and patching code and libraries to ensure user data is secure and does not risk any data loss.
If you choose to buy your subscription platform, ongoing maintenance of the software—including fixing bugs and defects, updating versions, and more—will be outsourced. This alleviates the draw on your internal resources and associated opportunity costs, although it can limit your ultimate control over data security and compliance.
To vet data security and compliance for your chosen vendor, ensure that they regularly conduct vulnerability assessments and penetration tests, are SOC 2 compliant, and have employee training in place to mitigate physical security risks. Additionally, investigate whether they have ever had any previous cybersecurity tasks, and if so, how they were remediated.
How does Recharge support this?
Up-to-date Trust Center
At Recharge, security is a community effort. We maintain an up-to-date Trust Center where we communicate our privacy, security, and compliance initiatives.
Adherence to privacy standards
Recharge adheres to privacy standards and laws, including the General Data Protection Regulation and the California Consumer Privacy Act. We are certified as per the Payment Card Industry Data Security Standard (PCI DSS), and our Service Organization Control (SOC2) Type I report describes the effectiveness of the current systems and controls in place. We monitor that our platform is usable by all individuals and review compliance with relevant standards, including the Americans with Disabilities Act.
Security monitoring & training
The Recharge Security team conducts frequent security reviews and maintains an active bug bounty program through HackerOne to validate the effectiveness of our security controls. Our Product Development teams follow standardized processes with built-in security checks, and complete security training programs to maintain secure products and services.
Recharge combines automation and skilled reviewers to achieve optimum security and ongoing compliance. We also manage all vendor and technology partner relationships and compliance requests.
Our security and compliance operating procedures include:
- 24/7 incident handling with defined escalation paths
- Data encryption (including TLS and AES256) at rest and in transit
- Secure system access management with multi-factor authentication
- Logging, monitoring, and alerting
- Vulnerability and patch management
- Security testing to identify and remediate vulnerabilities
- Maintenance and backup procedures
The cost of a data breach reached an all-time high in 2022 at $4.35 million USD—a 2.6% increase from the previous year and a 12.7% average increase since 2020.Cost of a Data Breach Report 2022
Consideration #3: Cost
Initial development costs
Sticker shock around the initial contract investment required to buy an out-of-the-box subscription platform can lead merchants to believe it will be more affordable to build their own solution. However, it’s key to dig deeper into the investment that any monthly fees associated with buying could provide to the health of your business.
While it may be overwhelming to see all costs outlined upfront, these should always be compared to the initial development costs associated with building your own solution, which can often far exceed the cost of buying.
When custom-building your solution, these costs can vary, and may be difficult to estimate even if your company has previous project management experience. Typically, needs involve staffing, including multiple developer salaries and other resourcing needs like project manager salaries and executive input. It’s key to invest in quality talent that you can retain to ensure future scalability.
Other initial development costs include any consulting and third-party services, as well as IT infrastructure needs like servers, power, and connectivity. Depending on the nature of your business, there may be additional overhead expenses involved to get your solution off the ground—including any that come up due to unforeseen issues or delays.
Total development costs & considerations
Total cost of ownership
Difficult to pinpoint or unknown
Total cost of ownership
Availability (time to ROI)
Availability (time to ROI)
Existing internal resources may not have proper skillset
Outsourced team founded by industry experts that applies best practices and merchant feedback to the development roadmap
Merchants must properly prepare and define requirements themselves in-house
Industry and software expertise and extensive; merchant discussions help ensure best-in-class products
Requires careful planning and research to anticipate changes that may come
Always innovating and updating based on merchant feedback and industry best practices
Adaptability & flexibility
Offers control of tactical roadmap, but lacks the opportunity to leverage a wider industry view
Adaptability & flexibility
Agile/DevOps methodology allows for rapid changes to roadmap and features
Ongoing & maintenance costs
As with initial development costs, ongoing upkeep and maintenance costs are key factors when budgeting for a custom-built solution.
When custom-building your solution, consider the extra costs of hosting, system monitoring, infrastructure reliability, and charge processing. Analytics and business insights, fraud prevention, and security and compliance costs should also be weighed, as well as additional support fees. Finally, consider other costs around maintenance, including those for new features and enhancements down the road.
Hidden & opportunity costs
When thinking about whether to build or buy, opportunity costs are often overlooked—yet these can have a monumental impact on a merchant’s finances. Buying an out-of-the-box solution outsources the software development to an external group, allowing you to devote time and energy to your core products and strategic opportunities. This can increase speed to market and pace of innovation.
Building your own software, meanwhile, can divert a high volume of internal resources away from other profitable opportunities and core business initiatives in the organization. Systems must be constantly reengineered to support additions and changes in business initiatives. If this results in downtime of a business-essential system, merchants may experience a severe loss in business.
Other areas where merchants building their own solution may incur opportunity costs include:
- Out-of-the-box integrations and partnerships: Require resources from engineers and other internal teams to develop, which may detract from the core product
- Secure engineering practices: Require Product Development teams to follow standardized processes with built-in security checks, as well as complete security training programs to stay consistently vigilant
- Data migration: Can be time-consuming and complex to effectively migrate data from the original product to a new build
- Access to domain experts: Requires the merchant to hire or contract out experts in the subscription space with the most up-to-date information on best practices
Total cost of ownership
While at face value, building a subscription platform may seem more economical than buying, the total cost of ownership (TCO) should be considered to accurately assess this. A crucial deciding factor, TCO combines all costs involved: initial development costs, ongoing costs, and opportunity costs.
All in, the TCO associated with building is typically greater than that of buying. The deciding factor here is whether this higher price offers a worthwhile competitive advantage for your business.
A hybrid approach: When to build and buy
Sometimes, the decision to build or buy isn’t black and white. For some merchants, it may be wise to consider a hybrid approach to subscription software that involves both building and buying.
With the platform-independent Recharge API, you can apply subscription functionality to your existing tech stack. Recharge subscription options can be seamlessly displayed on any frontend, and merchants can easily mix and match varying levels of custom-built elements with a Recharge solution.
For merchants who opt for this type of hybrid approach, the Recharge team is dedicated to supporting you through it. Regardless of your existing tech stack—Shopify Checkout Integration, Recharge Checkout on BigCommerce, a completely custom build, or something else—our team of implementation engineers will support you through the initial technical implementation.
Together, we’ll explore which parts of your subscription commerce solution are best suited for building, and which would be well-matched for Recharge. And after onboarding with Recharge, you’ll be paired with an account manager who will help you strategically navigate various stages of subscription growth and share best practices from our portfolio of over 15,000 merchants.
For more information on achieving a hybrid approach to building and buying with Recharge, speak to our Sales team about the Enterprise plan.
Navigating the best software solution for your business is no easy task. The key is to consider the option that offers you the greatest value for the cost.
Whether you choose to build, buy, or adopt a hybrid approach to your subscription commerce solution, it’s crucial to prepare yourself for the costs that may lie ahead. Ensure you have the necessary resources to support both your choice and your core business objectives so that you can grow and scale effectively in the long run.
As ecommerce evolves and the demands of end-users continue to increase, building your own solution has become more complex than ever before. Choosing a solution to buy also requires a thorough analysis to make sure your software can scale with you. Whichever option you choose, ensure that you have access to the best-in-class strategic advisors—either in house or external partners—that can set you up for success in the long run.
When chosen effectively, the right subscription solution will allow you to tap into the true power of recurring revenue. In the end, this opens the door for long-term customer relationships that lead to increased lifetime value, reduced churn, and high levels of brand loyalty that set your business apart.