The Road Ahead: How Does Reaction Make Money?

Sara here! Welcome to the second installment of my blog series chronicling the road ahead. Before I get into this month’s post, let me first share with you a few company updates:

  • Since last month’s v1.13.0 release, we’ve been making great strides with improving app performance. In a recent benchmark test, page load time for the homepage averaged around 4 seconds! To learn more, read Brent’s post on performance and load testing.
  • We’ve revamped the look and feel of our docs, which now features a brand new search engine.
  • In v1.14.0, we’re introducing a new streamlined plugin management system, focusing on one package and migrating all others to reaction-contrib. We’re also introducing GraphQL to the checkout schema.
  • We are actively hiring for several positions for Engineering and Operations. Interested in joining our team? Check out our careers page for more info.

Today, I’d like to address a frequently asked question: how does Reaction make money?

We believe that a strong community is the key element to success for our business. That’s why Reaction’s codebase is GPL-licensed and freely available for any retailer to use, regardless of geography, company size, or product type.

But who do we actually sell to? And what do we even sell?

The who

The target customers for our commercial offerings are:

  1. Mid-market-to-enterprise retailers and brands—“miderprise” clients— who are outgrowing their legacy or closed platforms, and
  2. Digitally native vertical brands (DNVB’s) who are scaling beyond their initial platform.

We roughly define miderprise as retailers and brands doing $20-500M annually online.

The what

As for what we actually sell, the Reaction business model consists of multiple elements:

Managed platform (aka subscription services)

Ambitious miderprise retailers and brands need hosting solutions that give them the speed they need to take control and move faster. We partner with best-in-breed cloud providers to deliver service, security, and support. Our goal is to give our clients the keys to deploy, monitor, and manage their Reaction shops and marketplaces. At a high level, we like to say that we reduce DevOps headaches.

Optional value-added apps and services (aka open core model)

We intend to enhance our open source codebase with commercial offerings, such as Reaction Analytics or Reaction Merchandising applications. Paid features have always been a part of our company vision. Now, we’re actively working toward making them a reality.

Consulting services (aka professional services)

We offer development services or expert advisory services for key clients and partners on a case-by-base basis. For the most part, we hand off professional service engagements to our dev agency partners, since our intention is to be a software company, not a services company.

What’s the difference between Reaction’s open source vs. enterprise offerings?

Our open source codebase comes with all the table-stakes features needed to create a customizable ecommerce storefront: catalog management, inventory management, payment processing, order processing, shipping and taxes, cart, checkout, and more. This is most likely the application our users are most familiar with. It’s a powerful solution for developers and small-scale operators alike.

Our enterprise solutions are geared toward sophisticated retailers and brands looking for infrastructure that can handle the demands of their high-volume business. Depending on the needs of the partner, this offering may include DevOps support, paid features, and expert advisory services on top of our open source codebase.

Conclusion

I hope this has been illuminating! Interested in developing a partnership? Want to learn more about our professional services? Contact us at sales@reactioncommerce.com.

In next month’s product updates, I’ll give some more insight into our package migration project—why we’re doing it, how simplifying the platform will make for a slimmer, faster Reaction, and how our contributors can get involved.

Did you enjoy this post? I’d love to hear your feedback. Comment below, or message me with any of your questions, thoughts, or suggestions.

Until next time!

comments powered by Disqus