Magento 2 (Adobe Commerce) Pricing Explained

Adobe Commerce (formerly known as Magento 2 Commerce) is one of the most popular e-commerce platforms on the market. But what does it actually cost to use it? We reveal the truth about Magento pricing below. You will learn what the actual Magento 2 price is, including various hidden expenditures associated with running an e-commerce website on this platform. We focus on three different editions of Magento from the most budget-friendly to the most expensive tier. After that, you will find a comparison of Magento Commerce pricing with other competitors. We show the gap between Magento Commerce Cloud pricing and the cost of using rival platforms. If you are thinking about starting an e-commerce business and consider Magento as your foundation, you’ve come to the right place. Let’s see what Magento is and how the platform is divided into three products.

What is Magento?

Magento is an open-source e-commerce platform that was first released in 2008. It was created by a company called Varien, which later became Magento, to provide a flexible, customizable, and scalable platform for businesses wishing to build their online stores. 

After a series of minor and major tempests, Magento becomes a part of Adobe in 2018. The software giant integrates Magento Commerce into the Adobe Experience Cloud and renames it to Adobe Commerce. 

Today, the platforms can be used to build an e-commerce store of any size. As a store owner, you can customize its themes, functionality, and integrations with external systems, implementing brand identity and improving the default e-commerce experience of both administrators and customers. 

What Magento editions are available?

Magento 2 exists in two editions: Magento Open Source and Adobe Commerce (Magento Commerce). Open Source is available for free. Commerce is provided for an annual fee that depends on the size of your gross merchandise volume. This edition is divided into two products: On-Premise (Adobe Commerce Pro) and Cloud (Managed Services). 

Magento Open Source brings all the basic e-commerce capabilities of the platform (you can get more with third-party extensions) and allows you to build a unique online store from scratch. 

Adobe Commerce, in turn, is associated with a full e-commerce experience available from scratch. The platform uses AI and advanced data-sharing capabilities to create end-to-end personalized e-commerce experiences for both B2C and B2B. This platform is flexible, extensible, and scalable no matter whether you decide to choose On-Premise or Cloud. 

In general, the difference between the available editions looks as follows:

In other words, Magento Open Source is a free software solution for tech-savvy merchants, while Magento Commerce On-Premise (Adobe Commerce Pro) is a powerful e-commerce platform that delivers enterprise-class native features and support. As for Magento Commerce Cloud  (Adobe Commerce Managed Services), it is like the On-Premise version with advanced hosting capabilities. You find more information on each Magento 2 version in the table below:  

Magento Open Source and Adobe Commerce Pricing Plans

Now that you are familiar with available Magento 2 versions, let’s talk about Adobe Commerce prices. Understanding how much it costs to use Magento Open Source and Adobe Commerce is crucial for businesses considering these platforms as a solution for their e-commerce needs. This includes knowledge of Magento pricing tiers and the differences between Magento Open Source and Magento Commerce pricing, including Magento Commerce Cloud pricing and Magento Commerce On-Premise pricing.

Knowing the distinctions between the various pricing plans allows businesses to make informed decisions about which plan best suits their needs and budget. For example, Magento Open Source is a free platform (but still associated with lots of expenditures), while Magento Commerce pricing is tiered and includes additional features and support. The annual Magento licensing cost structure looks as follows:

Although the price of Magento Open Source is $0, it doesn’t mean that you can create your store for free. The license costs nothing, but running a Magento Open Source store is associated with multiple other expenditures that we describe below.

Understanding Magento pricing can help you properly budget your project and anticipate additional costs, such as implementation and hosting, which may occur in the course of store development and maintenance. Therefore, let’s be more specific on all Magento pricing tiers

Magento Open Source Pricing: Is Magento Free?

In terms of licensing, you can use Magento Open Source out of charge. So, technically, yes, Magento is free. 

You get all the essentials and the customization options that Magento is known for entirely out of charge. Its core functionalities are enough for any basic e-commerce storefront. 

Because the platform is open-source, there is a thriving Magento Community at your disposal. It offers thousands of extensions that close the gap between Open Source and Commerce, adding things like marketing tools, gift cards, and advanced site search. Apart from that, Magento Open Source comes with such necessities as basic analytics and reporting, catalog management, mobile-optimized shopping, and flexible coupons and promotions.

However, you will need a Magento-savvy developer or even an entire team to set up, configure, and maintain your e-commerce website. It is one of the main disadvantages of Magento Open Source. At the same time, your administrators and managers will need time to master all the backoffice processes. 

As for third-party extensions and services, some of them are subscription-based, adding up to the ongoing costs. A hosting solution is also required. And since your only technical support is associated with Magento forums, Github, and StackExchange, you may need to pay for external consultancy. 

Although Magento Open Source is free, your project development and maintenance may increase your expenditures dramatically. The more demanding your e-commerce website is, the more extra money to harness the platform you’ll need. 

However, average expenditures associated with this version are not as huge as the ones Adobe Commerce On-Premise and Cloud charges. The “get what to pay for” approach lets you carefully calculate your budget and exclude features and services that you don’t need from the cost list.

Adobe Commerce Pro Pricing: How much does Magento 2 cost?

As we’ve shown above, you deal with multiple Magento pricing tiers with Adobe Commerce Pro or On-Premise. Its tiered pricing is based on sales volume, starting at $22,000 per year. However, if your GMV exceeds $25M+ per year, the Adobe Commerce Pro price rises up to $125,000. So, if we speak about Adobe Commerce Pro, Magento 2 costs from $22k to $125k per year. 

Considering such a huge price, Magento Commerce On-Premises is designed for retailers with more advanced needs and budgets. This powerful platform incorporates the foundations of Magento Open Source along with exclusive Magento Account Management and Technical Support services.

Due to the expanded native functionality, you get more control over your e-commerce website along with numerous new possibilities without the need for extensions or additional subscription services. For instance, advanced Business Intelligence Dashboards let you make data-driven decisions, while rewards and loyalty programs, gift cards, and private sales can help you build brand loyalty. Still, you may need to install third-party extensions with specific functionality that is not available in Adobe Commerce, like advanced import and export.

Along with that, Adobe Commerce Pro lets you establish efficient marketing strategies backed up by such outstanding functionalities as customer attributes, segmentation, upsells, cross-sells, and related products, etc. Magento’s page builder, integrated CMS, content staging, and extended admin permissions can help your team reduce the time and effort required for daily business processes.

Support is another premium feature of Adobe Commerce. You can get help when you need it straight from highly-qualified specialists.

But the on-premise version of Adobe Commerce is not yet all-inclusive. Commerce Pro lacks hosting. However, many businesses consider it as an advantage. Since hosting isn’t included, you get extra flexibility and control.

The real disadvantage of this Magento version is that you may still need customizations. Adobe Commerce is one of the most advanced e-commerce platforms, but your business may demand more than that. You will need a team of developers to set up, configure, and optimize your online storefront. You pay a huge annual fee and need to hire developers, install third-party extensions, and establish integrations. Since hosting is not included, get ready to pay for it too.

Adobe Commerce Cloud Pricing: How Expensive Is Hosting Outsourcing? 

If you don’t want to deal with hosting and other aspects associated with the on-premise e-commerce model, pay attention to Magento Commerce Cloud. Starting at $40k per year, this Magento license delivers the ultimate bundle of Magento services and features – everything you’d get with Magento Open Source and Adobe Commerce Pro – along with hosting options. It may be the most expensive hosting outsourcing in the entire e-commerce universe. If your GMV exceeds $25M+ per year, the Adobe Commerce Cloud price is $190,000. 

However, you deal with a few essential advantages, including a website setup, which is relatively easy from a development perspective compared with Open Source and On-Premise. Note that Adobe Commerce Cloud utilizes Git for version control. And with the Magento Cloud CPI tool, you get simple deployment processes.

It is also necessary to mention that Commerce Cloud is built on an AWS cloud server and performance monitoring tools like New Relic and Blackfire.io. These benefits should cut down additional expenses, delivering best-of-breed functionalities. 

Another advantage of Commerce Cloud is that you are no longer responsible for critical incidents. It’s Magento Support’s duty. Although the responsibility shift may seem attractive, It’s not that good. 

You need to submit a ticket with your problem. Adobe will prioritize it in the existing queue according to the problem scale and current ticket volume. As you might have already guessed, it may result in an unwanted delay for smaller clients or clients with minor issues.

Yet, it’s not the most essential disadvantage. The Magento Commerce Cloud pricing itself is the most notable drawback. You have to spend a huge amount of money to get advanced functionalities, support, and hosting. 

The lack of flexibility and freedom of choice is also something that many merchants don’t want to deal with. Although AWS hosting and Magento’s integrated tools are great, there are no alternative options. Not to mention the possibility to leverage any solution you desire. 

Moreover, you may need to install third-party extensions to exceed the platform’s default functionality.  

How much does a Magento 2 project cost? Additional Costs to Consider

When you want to launch a Magento website, you need to keep the following additional costs in mind:

• Implementation Costs: In addition to yearly fees associated with the Magento Commerce price, there may be additional costs for the initial setup and customization of the platform. This can include costs for design and development work, as well as any third-party integrations or extensions that need to be installed.
• Hosting costs: If it is Magento Open Source or Adobe Commerce On-Premise, businesses are responsible for hosting and maintaining their server environment, resulting in additional costs for hardware, software, and IT personnel.
• Transaction fees: Depending on the selected payment gateways and processors, you may deal with transaction fees associated with each sale made through the platform. These hidden costs usually include fees for credit card processing or other payment methods.
• Support and maintenance costs:  It’s important to consider the ongoing costs of maintaining and supporting the platform. While both Adobe Commerce options offer support, you need to include the costs for software updates, security patches, and technical support if you choose Magento Open Source. In some cases, Adobe Commerce requires additional costs for maintenance.

Let’s try to calculate a budget for running a Magento website based on Adobe Commerce:

• Development: Magento 2 development costs can range somewhere from $1,800 to $15,000+. 
• Hosting: Magento 2 hosting price varies between $15 and $500+ per month.
• Domain: Get ready to spend between $10 to $20 per year for your domain.
• SSL certificate: The price of all improvements associated with an SSL certificate varies between $50 and $1000 per year.
• Transaction fees: Usually, payment platforms and credit card processing fees vary between 2% and 4% per transaction.
• Support and maintenance: The developer hourly rate for Magento varies from $35 to $100 per hour. 

Let’s suppose that your annual turnover is less than $125,000, all other expenditures are associated with the lower bound, and you need 10 hours of development per month. You need to spend $22,000 on a Magento license, $1,800 on development, $15×12 on web hosting, $10 on a domain, $50 on an SSL certificate, 0.02x$1M on transaction fees, and $35x10x12 on support and maintenance. 

So, your Magento website costs $48,240 per year, whereas additional costs associated with the development and maintenance of your e-commerce store are $26,240.

Let’s do the same calculation for the upper bound: $125,000 + $15,000 + $500×12 + $20 + $1,000 + $25Mx0.02 + $100x10x12 = $659,020, where your additional costs associated with the development and maintenance are $534,020.

As you can see, the cost of running a Magento website on Adobe Commerce varies between $48,240 and $534,020 per year, depending on the gross merchandise value and other factors. You need to do your own calculations to figure out the exact budget for your project. 

Note that our calculations exclude marketing costs and money necessary to purchase goods and pay salaries. 

Magento 2 Pricing: Comparison with Other E-Commerce Platforms

By comparing Magento 2 (Adobe Commerce) pricing with other e-commerce platform prices, you can better understand which system best suits your budget. Note that our comparison covers only annual licensing plans. Therefore, pay attention to other aspects of your calculations when planning a budget for your future e-commerce business,  including development and maintenance costs, hosting expenditures, the money necessary for third-party extensions and integrations, etc.

As you can see, Magento’s competitors look more attractive when it comes to pricing. However, their use is associated with hidden costs. For instance, WooCommerce has no setup charge and no monthly fees, but you need to pay 2.9% + $0.30 for each transaction made with US-issued cards and an additional 1% for cards issued outside the US. Also, building a store on this platform requires you to pay for hosting, extensions, and integrations. The situation with other e-commerce systems is more or less similar. 

Bottom Line

What does the understanding of the Magento 2 pricing bring to you? It is the most essential knowledge if you are looking to build a powerful e-commerce website. 

While Adobe Commerce plans offer enterprise-level features and scalability, they come with a higher price tag. If your budget is tight, then consider Magento Open Source as your option. However, it is always crucial to keep various additional costs, such as implementation, hosting, transaction fees, support, and maintenance, in mind, when you try to calculate e-commerce total cost of ownership. Even when you decide to stick to the free Magento version.

Looking to the future, the pricing of Adobe Commerce is likely to continue to grow as e-commerce technology advances. It doesn’t seem that the ongoing economic recession may decrease the current costs. Therefore, it’s vital to stay informed about new pricing models and options as they become available.

Compared with other e-commerce platforms, Magento Open Source and Adobe Commerce offer a higher level of customization, flexibility, and scalability. However, they require more technical expertise and resources to set up and maintain a fully-functional online storefront. Shopify, Bigcommerce, WooCommerce, and Shopware, on the other hand, are more user-friendly and cost-effective for smaller businesses with less complex needs.

If you considering Magento 2, it’s important to carefully evaluate your specific needs, budget, and technical expertise before making a decision. If your e-commerce business has complex demands and, at the same time, the resources necessary to support them, Adobe Commerce may be the best choice. For smaller businesses, other platforms are usually a better fit.

No matter how big or small your business is, choosing the right e-commerce platform is a critical decision for any company. By carefully evaluating the pricing, features, and other factors, you can build a powerful online storefront that satisfies your specific business requirements.

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