I'm trying to suggest a solution for a friend who owns an existing web shop. The current solution isn't cutting it.

The new solution needs to have a few things that look like they're enterprise-only if I go with Magento, and $12k a year for a store with maybe $20k in stock just doesn't work.

The site should have items, which have one or more categories. Each category may have a parent category. Items have MSRP, and a discount rate by supplier, brand, and sometimes additional discount by product.

When a user buys something, it should automatically setup a shipping label with UPS or USPS, depending on user's choice, and build two invoices; one to go in the box, one to go into records. This is crucial; it's low profit per item, so it needs to minimize labor here.

Need to be able to have sales (limited by time), discount codes/coupon codes. Ideally would have private sales and/or members-only rates as well.

It needs a payment gateway; Paypal/GCheckout-only isn't going to fly. Must be able to accept Visa/MC.

Suggestions? I'm debating just building this myself in Java or PHP, but wanted to point my friend to a reasonable-cost solution that already exists if I can. This all seems pretty straightforward to code, save working with the UPS/USPS/Visa/MC APIs, and doing CSS for it.