If you are truly looking at a small ecommerce site, I believe a hosted solution would suffice for day to day business needs. Now... if you're looking at things that require real time automation, for example, please consider that a hosted solution is limited to your connection speed and as such might be an additional bottleneck in your business flow. Consider that you are shipping packages from your a warehouse, your flow might look like this: your shipper will need to pick the products (are you considering barcoded products with serialized inventory?). Scan the invoice, Scan the items (are you able to connect a bar code reader to the platform you're choosing?), seal the box, print the label and go to the next invoice. In general, this might take up to 20 seconds. If you're using a hosted solution, the data transfer over the web might take 20 seconds in itself, not withstanding the physical labor desribed above. Also consider automation, a HUGE request from our clients. Does a hosted solution offer Business Process Management (BPM) or Business Activity Monitoring (BAM)? Consider that in today's market, business is most always time of the essense. Does your system automatically react to situations? Can you build intelligent automation in a hosted solution? Consider a real world scenario... We have a client with a 5 man crew that ships over 1000 packages a day. I cannot imagine how to accomplish this without automating a multitude of processes. Mind you that this company started 3 years ago with only a husband and wife team. Take care of your bottlenecks by automating your processes. Not only will this increase your capacity but will lower your costs and most likely increase your customer satisfaction! A hosted solution is a bottleneck in itself.

I hope this help,
Gil
Devix Group LLC
http://www.devix.com