Choosing an eCommerce platform always comes down to understanding the real cost of running it well. Magento Open Source does not have a license fee, which sounds simple, but the license is only one part of the overall picture.
Total Cost of Ownership gives a clearer view so teams can see how the investment works, where money actually goes, and what the long-term financial outlook looks like.
Here is what this guide will help you understand:
- What Magento Open Source includes by default and why it matters
- The core cost categories behind a proper build
- How open source avoids unnecessary recurring fees
- When Magento becomes the more cost-effective option
- What teams often get wrong when comparing platforms
Let’s dive in!
What Magento Open Source Includes Out of the Box
Magento Open Source offers a flexible foundation that supports businesses that want control, customization, and room to grow. It is more capable than many expect, and the feature set covers what most mid-sized merchants need before adding anything custom.
You get:
- Strong product and catalog management
- Configurable, grouped, bundled, and virtual products
- Custom product attributes and advanced catalog logic
- Multi-store and multi-language capabilities
- A fully customizable checkout
- Full access to the codebase for frontend and backend customization
This matters because the more functionality you get upfront, the less you rely on recurring-fee apps that can drive up long-term costs on SaaS platforms.
The Major Cost Categories Behind a Magento Build
Total Cost of Ownership for Magento Open Source comes from a handful of predictable areas. These are normal for any serious eCommerce operation, but open source gives you more control over how each cost grows.
Build and Implementation
This covers everything required to get the store running properly. That includes design, theme development, catalog setup, integrations, custom workflows, and checkout configuration. A solid build avoids headaches later and creates a stable foundation that can scale.
Hosting
Magento Open Source requires reliable hosting. This is not a platform that runs well on low-cost shared environments. The upside is that you choose the provider and the cost structure. Hosting scales based on real usage instead of platform-controlled subscription tiers.
Extensions and Integrations
Most Magento extensions use a one-time purchase model. That alone keeps recurring fees lower compared to SaaS ecosystems that lean heavily on monthly app subscriptions. Integration costs depend on how complex your business systems are, but you are not locked into any specific app marketplace or pricing model.
Maintenance and Improvements
Magento Open Source needs periodic updates, security patches, and performance work. This is normal for any open source system. Regular maintenance keeps the store stable and avoids expensive issues down the road.
Payment Processing
This is a major cost difference between platforms. Magento lets you choose your payment processor and your rates. You can negotiate fees and switch providers at any time. Some popular SaaS platforms take a cut of every transaction and penalize merchants with even more fees unless they use the preferred gateway. Magento keeps transactions between you and your processor, nothing more.
Where Magento Saves Money Long Term
The initial build is only part of the equation. The long-term cost curve often favors Magento Open Source once a business starts generating meaningful volume.
Here is where the savings appear:
- No revenue-based fees. Some platforms take a percentage of each sale or add fees unless you use their processor. Magento avoids this entirely, which saves higher-volume brands significant cost.
- No subscription tiers. SaaS platforms move merchants into higher priced tiers as traffic, catalog size, or features grow. Magento does not add fees for growth.
- One-time extension costs. Magento extensions are usually purchased once instead of stacking monthly app charges.
- Custom features become assets. When you build something in Magento, you own it. You are not renting functionality from an app store.
- Hosting scales based on real demand. Infrastructure grows at your pace instead of jumping to a new tier set by someone else.
Over a multi-year period, these factors usually create a more predictable and cost-effective path for brands that plan to grow.
When Magento Becomes the More Cost-Effective Choice
Magento Open Source is not designed for the simplest stores. It becomes the smarter financial choice when a business needs flexibility or has outgrown the limits of entry-level platforms.
It is usually the better option when:
- Order volume or average order value is rising and transaction fees are cutting into margins
- Your workflows require customization that template-based platforms cannot support
- You operate multiple stores, multiple languages, or complex catalog structures
- You want ownership of your code, data, and integrations
- You prefer to invest once rather than rely on paid apps charging monthly fees
A SaaS platform is still a fit for small, simple stores with limited customization needs. Magento is built for teams that want control and long-term stability.
What Teams Often Get Wrong About TCO
A lot of the confusion around Magento’s total cost comes from assumptions that sound reasonable but fall apart once a business starts growing. These beliefs create blind spots that almost always lead to the wrong platform decision.
Here are the three that cause the most trouble:
- Teams assume Magento must be inexpensive because the license is free, which hides the real investment needed to run it well
- SaaS pricing is treated as predictable even though subscription tiers, app fees, and payment penalties often climb fast as sales increase
- Replatforming is seen as the biggest cost, when the more expensive path is staying on a platform that restricts growth or becomes more costly over time
The real distinction shows up after the first year. Once a business starts scaling, the cost curves between open source and SaaS move in opposite directions.
Magento stays tied to intentional choices, while SaaS costs rise with revenue and complexity. That is why understanding TCO is less about the first month and more about where the business is heading.
Where This Leaves You
Magento Open Source is built for teams that want control, flexibility, and predictable long-term costs. It is not the platform for every store, but it becomes the stronger financial decision once a business needs more than a template storefront or wants to avoid rising subscription and transaction fees.If you want help evaluating whether Magento Open Source fits your business or you want a clear roadmap that matches your growth plans, the team at Bighorn can walk you through it. We help brands build platforms they can rely on as they scale, without the limits of rented ecosystems or unpredictable fee structures.