I was wondering how you guys who do custom e-commerce web development compete against the hosted solutions like Shopify. I obviously know the advantages of a custom site using Drupal or Magento, but sometimes potential customers just don't get it. It's tough to try to sell a $3,000-$5,000 custom website when they can pay for some hosted solution for $50-$100 a month. Any ideas on how to improve sales in this area?
It depends on what you want to do. Self-hosted solutions tend to be more flexible and customizable.
On the other hand, hosted solutions are more likely to be PCI compliant so customers might have the option of storing credit card numbers (note: not all hosted solutions are PCI compliant, so you will have to ask and do your own research).
If customers "don't get" what you're trying to sell them, make a short bulleted list of actual features/benefits that is easy to understand and doesn't read like a press release.