Ecommerce Options for Volusion Customers Post-Bankruptcy

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Isaac Herman

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Ecommerce Options for Volusion Customers Post-Bankruptcy

23/09/2020 Categories: ARTICLES

  Volusion launched in 1999, riding the first dot-com boom as an "all-in-one" eCommerce platform. Their goal was to create a simplified, easily implemented dashboard for managing online stores. The platform gained a loyal following and widespread popularity as it grew over the course of two decades, which is why it was surprising to see that Volusion filed for Chapter 11 bankruptcy in July 2020. How did it get to this point? A Lack of Innovation A Chapter 11 bankruptcy is a "reorganization" bankruptcy under the United States Bankruptcy Code. Put simply, Chapter 11 is one of the best ways to keep your business afloat while paying off debts over a long period. When companies opt for Chapter 11 bankruptcy, typically the goal is to regain solvency and to continue operations. Volusion was one of the first commercial eCommerce platforms, but it hadn't demonstrated a commitment to ongoing improvements and enhancements. It was technologically surpassed by other significant players such as BigCommerce, Magento, and Shopify. As a result, Volusion had been leaking customers to its competitors for some time. A big contributing factor was Volusion's lack of integrations. Most eCommerce platforms use open API structures, which makes it easier for those platforms to communicate with other systems and makes it easier for developers to build, deploy, and scale Cloud services. Volusion never offered a dedicated API, so there were very few integrations available, which limited the ability of merchants to add customized functionality to their stores. Features such as abandoned cart functionality and 3rd-party integrations are fundamental expectations for many merchants. But for Volusion customers, obtaining these features required custom coding, back-end workarounds, and 3rd party fixes. Although these all contributed to Volusion’s financial woes, none were the primary catalyst for the Chapter 11 filing. The Volusion Security Breach The tipping point came when Volusion fell victim to a breach in 2019. Hackers compromised its cloud infrastructure and stole credit card details, impacting over 6,500 stores on Volusion. According to Gemini Advisory, nearly 20 million customer records were exposed. The estimated damages ended up being approximately $133.98 million. After weighing their options, Volusion decided to file for Chapter 11 in order to remain operational. Through this protection, they have time to recapitalize the company, finance future developments, and improve the cash flow. Volusion has reassured its customers that the bankruptcy will not affect their level of service and has even expressed optimism for the future. It’s not unreasonable to think they could pull through. Many companies have emerged from Chapter 11 stronger than before. However, Chapter 11 is still an expensive and complex form of bankruptcy, so there are risks. It's reasonable to question whether they have the resources to shore up their defenses, add

piggy bank

platform gained a loyal following and widespread popularity as it grew over the course of two decades, which is why it was surprising to see that Volusion filed for Chapter 11 bankruptcy in July 2020. How did it get to this point?

piggy bank

A Lack of Innovation

A Chapter 11 bankruptcy is a "reorganization" bankruptcy under the United States Bankruptcy Code. Put simply, Chapter 11 is one of the best ways to keep your business afloat while paying off debts over a long period. When companies opt for Chapter 11 bankruptcy, typically the goal is to regain solvency and to continue operations.

Volusion was one of the first commercial eCommerce platforms, but it hadn't demonstrated a commitment to ongoing improvements and enhancements. It was technologically surpassed by other significant players such as BigCommerce, Magento, and Shopify. As a result, Volusion had been leaking customers to its competitors for some time.

A big contributing factor was Volusion's lack of integrations. Most eCommerce platforms use open API structures, which makes it easier for those platforms to communicate with other systems and makes it easier for developers to build, deploy, and scale Cloud services. Volusion never offered a dedicated API, so there were very few integrations available, which limited the ability of merchants to add customized functionality to their stores.

Features such as abandoned cart functionality and 3rd-party integrations are fundamental expectations for many merchants. But for Volusion customers, obtaining these features required custom coding, back-end workarounds, and 3rd party fixes.
Although these all contributed to Volusion’s financial woes, none were the primary catalyst for the Chapter 11 filing.

data thief

The Volusion Security Breach

The tipping point came when Volusion fell victim to a breach in 2019. Hackers compromised its cloud infrastructure and stole credit card details, impacting over 6,500 stores on Volusion.

According to Gemini Advisory, nearly 20 million customer records were exposed. The estimated damages ended up being approximately $133.98 million. After weighing their options, Volusion decided to file for Chapter 11 in order to remain operational. Through this protection, they have time to recapitalize the company, finance future developments, and improve the cash flow.

Volusion has reassured its customers that the bankruptcy will not affect their level of service and has even expressed optimism for the future. It’s not unreasonable to think they could pull through. Many companies have emerged from Chapter 11 stronger than before.

However, Chapter 11 is still an expensive and complex form of bankruptcy, so there are risks. It's reasonable to question whether they have the resources to shore up their defenses, add new features, and support customers, all during a bankruptcy reorganization. Even if you're a Volusion loyalist, it might be time to reconsider, especially right before the holiday season.

laptops

Should You Migrate To A New Platform? 

For Volusion store owners looking to re-platform, we offer a couple of exceptional options. BigCommerce and Magento are financially stable, well-funded, feature-rich, and are unlikely to vanish any time soon. These eCommerce solutions offer excellent customer support, integrated inventory management tools, and a vast range of customizations available via the extension marketplace.

If you're looking for a hosted solution, BigCommerce is the closest option with the most significant upside. BigCommerce's API is very convenient to work with, and the total cost of ownership is cheaper than Shopify in the long run. BigCommerce offers valuable features such as a user-friendly interface, reasonable pricing, no transaction fees, and hundreds of other goodies that help make your store-building experience as smooth as possible. You won't be charged any additional fees for bandwidth or gateway, which isn't the case for Volusion.

Magento 2 is a fit for more mature businesses that may have detailed B2B requirements and operate multiple websites. It's more complicated than BigCommerce, which is why need you need to work with a partner. Magento is by no means a platform for beginners, and it's best to work with outside consultants and Magento-certified developers to optimize the Magento 2 platform. The platform offers a massive selection of certified add-ons through the Magento Marketplace, a bustling community centered around new app development. Magento 2 provides over 5,000 add-on extensions.

SaaS laptop

Replatform to BigCommerce or Magento in Only 6-8 Weeks

This year's peak selling time is rapidly approaching, so it may be a bit daunting to be considering a new platform. If you're a current Volusion customer, you may have spent a lot of time and effort implementing Volusion for your business. But the hard truth is that you will eventually reach a ceiling on functionality and scalability, and you need to weigh your options to find something more advanced and stable than Volusion.

However, Kensium can fast track your migration to a new platform. We offer the BigCommerce Accelerator program and the Magento Express Deployment package, each of which can get your site live in as few as eight weeks. If you think you are ready to move off of Volusion and onto greener pastures, contact Kensium and get started on transforming your business today.

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Volusion launched in 1999, riding the first dot-com boom as an "all-in-one" eCommerce platform. Their goal was to create a simplified, easily implemented dashboard for managing online stores. The platform gained a loyal following and widespread popularity as it grew over the course of two decades, which is why it was surprising to see that Volusion filed for Chapter 11 bankruptcy in July 2020. How did it get to this point?

piggy bank

A Lack of Innovation

A Chapter 11 bankruptcy is a "reorganization" bankruptcy under the United States Bankruptcy Code. Put simply, Chapter 11 is one of the best ways to keep your business afloat while paying off debts over a long period. When companies opt for Chapter 11 bankruptcy, typically the goal is to regain solvency and to continue operations.

Volusion was one of the first commercial eCommerce platforms, but it hadn't demonstrated a commitment to ongoing improvements and enhancements. It was technologically surpassed by other significant players such as BigCommerce, Magento, and Shopify. As a result, Volusion had been leaking customers to its competitors for some time.

A big contributing factor was Volusion's lack of integrations. Most eCommerce platforms use open API structures, which makes it easier for those platforms to communicate with other systems and makes it easier for developers to build, deploy, and scale Cloud services. Volusion never offered a dedicated API, so there were very few integrations available, which limited the ability of merchants to add customized functionality to their stores.

Features such as abandoned cart functionality and 3rd-party integrations are fundamental expectations for many merchants. But for Volusion customers, obtaining these features required custom coding, back-end workarounds, and 3rd party fixes.
Although these all contributed to Volusion’s financial woes, none were the primary catalyst for the Chapter 11 filing.

data thief

The Volusion Security Breach

The tipping point came when Volusion fell victim to a breach in 2019. Hackers compromised its cloud infrastructure and stole credit card details, impacting over 6,500 stores on Volusion.

According to Gemini Advisory, nearly 20 million customer records were exposed. The estimated damages ended up being approximately $133.98 million. After weighing their options, Volusion decided to file for Chapter 11 in order to remain operational. Through this protection, they have time to recapitalize the company, finance future developments, and improve the cash flow.

Volusion has reassured its customers that the bankruptcy will not affect their level of service and has even expressed optimism for the future. It’s not unreasonable to think they could pull through. Many companies have emerged from Chapter 11 stronger than before.

However, Chapter 11 is still an expensive and complex form of bankruptcy, so there are risks. It's reasonable to question whether they have the resources to shore up their defenses, add new features, and support customers, all during a bankruptcy reorganization. Even if you're a Volusion loyalist, it might be time to reconsider, especially right before the holiday season.

laptops

Should You Migrate To A New Platform? 

For Volusion store owners looking to re-platform, we offer a couple of exceptional options. BigCommerce and Magento are financially stable, well-funded, feature-rich, and are unlikely to vanish any time soon. These eCommerce solutions offer excellent customer support, integrated inventory management tools, and a vast range of customizations available via the extension marketplace.

If you're looking for a hosted solution, BigCommerce is the closest option with the most significant upside. BigCommerce's API is very convenient to work with, and the total cost of ownership is cheaper than Shopify in the long run. BigCommerce offers valuable features such as a user-friendly interface, reasonable pricing, no transaction fees, and hundreds of other goodies that help make your store-building experience as smooth as possible. You won't be charged any additional fees for bandwidth or gateway, which isn't the case for Volusion.

Magento 2 is a fit for more mature businesses that may have detailed B2B requirements and operate multiple websites. It's more complicated than BigCommerce, which is why need you need to work with a partner. Magento is by no means a platform for beginners, and it's best to work with outside consultants and Magento-certified developers to optimize the Magento 2 platform. The platform offers a massive selection of certified add-ons through the Magento Marketplace, a bustling community centered around new app development. Magento 2 provides over 5,000 add-on extensions.

SaaS laptop

Replatform to BigCommerce or Magento in Only 6-8 Weeks

This year's peak selling time is rapidly approaching, so it may be a bit daunting to be considering a new platform. If you're a current Volusion customer, you may have spent a lot of time and effort implementing Volusion for your business. But the hard truth is that you will eventually reach a ceiling on functionality and scalability, and you need to weigh your options to find something more advanced and stable than Volusion.

However, Kensium can fast track your migration to a new platform. We offer the BigCommerce Accelerator program and the Magento Express Deployment package, each of which can get your site live in as few as eight weeks. If you think you are ready to move off of Volusion and onto greener pastures, contact Kensium and get started on transforming your business today.