5 key considerations for going in-house vs. outsourcing your web shop

Do you stand up to the challenge of hiring a 20-person team to build and maintain a web shop in-house, or do you outsource to an external provider? 

Supercell launched an entire division - Supercell X - to oversee its web entities, like the webshop and Supercell ID. And Scopely has a central services team that runs their proprietary technology platform, Playgami. Similar, too, are Pixel Federation and MoonActive - meaning each of these teams hired for:

• web development 
• ecommerce knowledge
• payments operations
• compliance 
• customer support
• loyalty program management
• … and much more

So yes - it’s completely possible to build a web shop in-house. But interestingly, we’ve found that a majority of developers who first try to tackle web shops internally, eventually choose to outsource. It almost always comes down to resources, expertise, and time to market. 

Obviously, we’re biased. So to help you make a decision, here are five reasons game developers gave us on why they decided to outsource their web shop.

1. Save costs and drive more revenue

Let’s address the elephant in the room first: the cost. A web shop provider takes a 5% fee on top of channel fees (credit card, PayPal, etc), which can seem like a good reason to build your own in-house. But we’ve done the math - and found that the hidden cost of staffing in-house adds up to more than that 5% fee. There are a whole bunch of engineering, product, and art costs that come along with developing and maintaining your web shop in-house - in addition to making sure your hires have the right expertise in all the topics that we’ll go over next. 

Let’s say you hire 4 engineers to build your web shop at a rate of $30/hr. Once your shop is launched and live, it generates $100K each month. Then factoring in an average rate of 7% for your vendors, your cut at the end of each month is $73,800. Now let’s say you use an external webshop provider instead. You still have the 7% service costs - and the additional 5% of the web shop partner. But by saving on development costs, the net revenue that ends up in your pocket is $88,000 - a 19.24% higher margin than the in-house option. In both cases, the revenue earned through your web shop avoids the 30% commission of the app stores. However, just the development costs of building in-house mean less revenue in your pocket at the end of the month. 

The reality is, the amount of spend you need to capture to cover the 5% cost of outsourcing a web shop is not much at all compared to the ROI it yields. Just shifting 3% of players to your webshop means significant incremental revenue, since their purchases are free from the 30% commission fees of the app stores - which translates into higher margins for you. And since you can get to market more quickly by outsourcing a web shop, you can start enjoying those higher margins and earn a return on your investment more quickly.

How well you do that depends on another piece of expertise an in-house team or external web shop partner needs to have: whether it’s designing loyalty programs, launching engagement hubs of content, or constructing limited-time, exclusive offers - they need to understand the best web shop design and offers that get your players to spend even more. For example, a few of the offers, rewards, and traffic drivers we’ve helped our partners implement in their webshops include:

• Web-exclusive offers
• Discount codes
• Volume-based and BOGO discounts
• Daily login rewards
• Loyalty and progression tiers
• VIP stores
• Mission systems
• Referral programs
• Creator codes
• Virtual currencies

2. Web development expertise

Your specialty is designing games and focusing on giving players the best in-game experience possible. But a web shop is exactly how it sounds: it’s a web-native channel. Rendering UI on the web is pretty specific to this platform - mobile development and game engines use completely different languages to write user interfaces. So a deep understanding of web development is a must if you’re going to provide the premium webshop experience your highest-value players are looking for. 

If your engineering team is experienced in writing UIs in a different tech stack (e.g. Swift / iOS, Java / Android), it’s possible you can pick up web development and push out an MVP for a demo web shop that accepts payments. But for anything beyond that, you’d need to hire someone (or a few someones) well-versed in web shop design and creating UIs to handle:

• Creating a component system that makes the code able to scale with your game
• Web accessibility (a11y)
• Web I18n (internationalization)
• Mobile responsive design
• Performance optimization and QA 
• Staying up-to-date with the tech stack and web development landscape
• Building up a knowledge bank of best practices to make future updates and optimizations faster and easier

This is especially important if you have strict IP guidelines - meaning everything that appears in-game needs to appear exactly the same on the web shop, regardless of the screen size and type of device the player is using. This was the case for one of our game developer partners who chose to outsource their webshop to us. To help, our web development team separated the asset layers so the offer cards adapted for different aspect ratios - without any distortion. Though a subtle tweak, it’s the little details like this that add up to create a seamless online shopping experience for your players. 

3. Ecommerce knowledge

Though the end result is the same (making a purchase), players’ motivations visiting webshops vs. when they’re presented with in-game offers are quite different. On a web shop, users are browsing - they’re not playing. So how you format the web shop design and the experience you provide is more similar to traditional ecommerce. It requires a specific knowledge base and experience in the ecommerce industry, including knowing how to apply the following three best practices:

Translate in-game offers for the web shop

There are a bunch of offers that work well in-game but not on the web (like a rolling offer) and discounts that work on the web but not in-app, like volume-based discounts in a cart (e.g., spend $100 and get 20% off). 

Let’s say you want to reformat a rolling in-game offer into one for your web shop. What you need to do is recreate it in fewer steps with higher upfront prices, while still generating the same “cost” to you and “value” to the players. It’s a complicated calculation to say the least - and one that yields the best results when someone with expertise in both ecommerce and web shop design is handling it. 

Apply ecommerce UI to web shop design

Similarly, the way you present your offers in-game doesn’t always translate well to a web-based browsing experience. For one of our partners, their players were used to seeing offers formatted for their mobile device’s small screen - meaning they often tap into an offer and see a popup of the details. But on a web shop, features like popups and tooltips feel awkward. So our ecommerce product team built product pages: when players click on an offer, they’re taken to a new page with all the details and tooltips expanded clearly - just like would on an ecommerce site. This is the type of product thinking and iteration needed to transform your game’s shopping experience to the web. 

Use the right combination of ecommerce analytics

Webshops have a different set of metrics than what you’re tracking in-game - and many of these are specific to ecommerce. 

You should look to either create a dashboard in-house or work with an external provider that already has the most important webshop metrics integrated and ready for tracking, including:

• Average order value (AOV)
• Session duration
• Cart abandonment rate
• Repeat purchase rate
• Account linking conversion rate
• Product refund rate

4. Payment compliance and infrastructure

In-game, Apple and Google handle compliance for you - and they have systems in place for processing payments (Google’s billing system for Android or Apple’s system on iOS). 

Staying compliant

But bringing your in-game shop to the web comes with a whole new set of local and international compliance measures to follow and payment infrastructure to set up. These include:

• Implementing payment rails
• Setting up PCI DSS (Payment Card Industry Data Security Standard)
• Calculate, collect, and remit taxes
• Detecting and preventing fraud
• Abiding by data protection laws
• Following payment network policies

There are also comprehensive compliance measures that Apple and Google impose regarding D2C channels like webshops - and they are subject to a bunch of regulations and data policies that impact how they operate. These regulations are always changing, and keeping up with them to know what you can and can’t say in-game about your web shop can be a challenge. If you opt for the in-house solution, you’ll need to hire experts in fields like compliance, tax, and data policies. 

Developing the infrastructure

You’ll also need to choose and integrate an online payment gateway to start processing transactions - then keep updating it. Beyond the integration work needed to add new payment methods, this requires connecting your payments infrastructure to your game. This means you’ll need to build custom tech to:

• Grant user items in real time
• Link player accounts in the web shop to their device IDs
• Connect your catalog to the web shop 

Or you can use an external web shop that has all of this is already set up and integrated - ready to handle transactions across different payment methods and geos while ensuring you remain compliant with the app stores over time.

5. Provide customer support for a web shop experience

You likely already have a part of your operation devoted to answering customer questions and feedback regarding in-game issues. For your in-game shop, you can opt into the integrated services offered by Apple (meanwhile Google puts the burden of support on the developer).

But in your web shop, you need to deal with requests like answering payment questions and issuing refunds - all on the web. Otherwise, you might find your chargebacks spike (which can impact your relationship with major payment methods) or that players stop using your game webshop.   

To provide this top-quality customer service, you should consider:

• Being available 24/7
• Resolving refund requests quickly so you can avoid chargebacks

An external web shop partner handles all of the above so you don’t have to. 

What’s your decision?

If you have the resources to hire an entire team in-house and know which types of experts you need to hire, then building your game webshop in-house can work. But if you’ve either tried the in-house route already or don’t have these kinds of resources (or time to find and hire the right people), then outsourcing is the move.

D2C providers like Stash know what it takes to build the best desktop and mobile web shop - because it’s our sole focus. Our specialization means we have the experience and knowledge to drive higher conversions, boost the average order amount, and keep driving repeat purchases.

Leave the development, maintenance, and optimization of your web shop in the hands of those that know it best. And instead, spend more time and money focusing on your own operations to provide the best in-game experience possible for your players.

If you want to work with a D2C provider that can bring all the expertise you need for a premium webshop experience, talk to us today.