The Benefits of Outsourcing Your Ecommerce Business
Ecommerce outsourcing and associated tasks is a business practice that has many different definitions and comes in many different forms. However, the one thing that is certain is that it’s the most effective ways for ecommerce businesses to reduce their costs and become more efficient, both of which are essential if they want to stay competitive. This article describes the benefits of outsourcing and what it can do for your business finances, revenue, and workflow. We will also dispel a few of those disadvantages people believe outsourcing brings with it.
Ecommerce Outsourcing - What is?
Ecommerce outsourcing is the practice of using a third-party company, products and services to create goods and provide services, rather than doing the work in-house. The practice started in the 1970s and grew popular in the 1990s as a way for companies to reduce their internal cost structure and is still a popular option today.
The term “outsourcing” typically refers to tasks usually performed by in-house staff. With an ecommerce business, these tasks can include things like marketing, order management, stock control, writing product descriptions, handling support tickets, website development, technical support, and more – sometimes even handing the complete responsibility of eCommerce to a third party.
Many businesses outsource their ecommerce services to cut current costs or save on new resources they want to add to their workflows when they can’t afford or don’t wish to hire dedicated employees.
Smaller stores may have the business owner and one other employee handling multiple tasks, but eventually, all businesses need to hire an individual or an entire department to handle each task. This is the point when the owner of the eCommerce business must decide whether they want to outsource or insource the task. They can insource a task has become too overwhelming for the business owner to handle themselves.
This can become a major task in itself. On average every job offer attracts approx. 250 applicants, so are you willing to sift through them yourself or do you spend money on recruitment agency?
An in-house employee can be more expensive as you will be paying benefits on top of a basic salary. Although its likely believed to be much easier to keep track of an employee, providing you insist on an office-based employee. However, with the introduction of more home working being a major factor in peoples decision making when taking a job, you may have to consider a more flexible approach. Then there will also be a time where their services are not available save for illness and holidays.
Its also said a full-time employee, contracted to work 5 days a week on average is physically only working for 3 of those days. So, it may make more sense to outsource roles and tasks in cases where the business output does not justify hiring a full-time employee or you are looking to be more cost effective.
Why Would a Company Choose to Outsource Work?
There are two basic reasons why organisations prefer to outsource ecommerce services.
- Outsourcing saves businesses money.
As an eCommerce business, you can save money by outsourcing tasks such as marketing, social media, web development, technical support, administration, and even shipping tasks to a third party.
- The other reason is time.
Outsourcing gives you, the business owner, more time to focus on tasks that will help you grow and expand the business as a whole. It can also lead to a better quality of life for you and current employees as it’ll remove a few tasks from everyone’s daily list of responsibilities.
Ecommerce Outsourcing - The Benefits
Now that you know what outsourcing is, let us talk about what it can do for your ecommerce business. Let’s expand on the two key benefits that all Ecommerce businesses want to improve and has been mentioned a few times already—saving time and money—plus also a few additional advantages you’ll experience.
The Advantages of Outsourcing eCommerce Tasks
1. Save Money
Simply, this has to be one of the the biggest motivators for allocating tasks to companies and contractors outside of an in-house team. Employees require a full salary, benefits, taxes, time to train and equipment. You may also need to set up a new department or even a new office depending on the task that needs to be outsourced.
Without outsourcing, your options are either to continue handling the task yourself, pass off the task to an employee, which will only add to their workload and negatively impact their efficiency, or hire a new employee.
Take for example you decide you should be more active on Social Media, you look around your team, often business owners will settle on the youngest person believing that because they are active on Social media they can manage the company accounts, but are they fully up to date with all the changes the social media platforms are constantly making, are you putting this on top of their current workload. If an additional duty, they might become disillusioned that their workload increased without compensation. It is actually a time-consuming task creating compelling engaging content, engaging in consumers in conversations and tracking competitors. So should you trust this to an inexperienced employee.
With outsourcing, you can allocate certain tasks you and your employees do not have the time or skill for now without needing to cut costs in other parts of your business. You’re hiring a company that has experience in that field.
2. Save Time
As previously said, outsourcing eCommerce tasks saves you and your staff time. When you can outsource duties, you can devote more of your time to consumer research, development, outreach, and other activities that will help you expand your brand’s influence.
You’ll see a boost in productivity and morale when your employees are able to save on time and be much more efficient with the tasks they were originally hired to do.
Which will eventually turn into more sales and satisfied customers. Employees won’t be looking to cut corners when up against deadlines.
3. Enjoy a More Flexible Hiring Process
You will find yourself mainly outsourcing tasks you need performed year-round but not often enough to justify hiring new employees. However, there will be times where you will need short-term help as well. This is the case for projects that have expiration dates, seasonal work or perhaps even maternity leave.
For example, if you want to add 500 new products to your store, you will need someone to write optimized product descriptions for each. If this is something you don’t normally do, then adding that many new products to the store at once, you’ll need to ask a few employees to take care of it on top of their daily tasks or take care of them yourself. Plus, you need to consider the SEO benefit of the descriptions. Outsourcing this task, on the other hand, would allow you to hire a freelance copywriter or copywriting agency to handle the task as a one-off project.
As for seasonal work, you may have seasonal product launches or busy times for retailers can be events like Black Friday, Cyber Monday, and Christmas. You will hopefully see increased sales, significantly higher than normal, but this revenue boost brings with it other challenges, more orders to process and more customer queries.
Outsourcing eCommerce tasks may allow you to hire seasonal workers to cover the holiday rush with the money saved. For example, customer service could be managed quite easily on a few hours a week, but outsourcing would allow you to quickly increase the manpower to cover the extra enquiries, with the without the hassle of finding extra people yourself.
4. Stay Competitive
The internet breeds competition, you and your team can work yourself around the clock all you want, but if you only accomplish the bare minimum you will struggle to expand. Outsourcing allows you to complete tasks more efficiently and take on new projects while spending less. This will allow you to keep up with competition without needing to hire new employees.
5. Increase Your Profits
The basic aspect of business is you have to spend money to make money.
This rule never changes no matter how successful your business gets. You will always need to spend money on products, hosting, employees, marketing, and advertising to keep the business running. Take a look at some of the most successful brands such a Coca Cola or McDonalds how often do you see ad advertisement? They have reached a level, but to stay there they know they must keep promoting themselves.
However, referring to that basic principle one more time, spend more to earn more, which essentially means expanding the number of products you sell, the types of products, expanding into new countries and launching new marketing strategies, all of which require, more money.
Outsourcing, as explained above, allows you to expand the business and take on more projects without needing to spend money on recruiting new employees. This will allow you to earn more revenue and a higher return on investment
6. Start Projects Quicker
It takes a considerable time to recruit and onboard new personnel. You will need to post job ads, conduct interviews, assess which people are the best fit for the job and your organisation, and then train them. If all you want to do is start a new project for your marketing strategy or reshoot all your product photographs, this can be a long and difficult process.
Outsourcing simply cuts right through this process and gives you immediate access to qualified candidates and agencies. You can get to work on your new project at a much more efficient rate, all while spending less.
By outsourcing you can reduce the risk and test the idea without worrying, lets be honest not every idea works, another rule of business is test, test, and test again. An outsourced agency provides and cost-effective solution to launching and testing a new plan and the ultimate goal if successful is then to look at an internal employee.
7. Staff Members’ Individual Skills
You might be able to outsource indefinitely without having to convert contract work into full-time work. If you have employees who work directly with outsourced labour, you may be able to train them in the skills you need to outsource.
As said in the previous point, the long-term, goal might be to move the task to an internal team and once at this point you can use the agency to train and develop that employee to take over the tasks without any loss in performance.
8. Less Red Tape
Hiring staff can be fraught with red tape and regulations. This is particularly challenging if your business fluctuates throughout the year and you need to up staff and down staff depending on the demand. There can be a lot of rules and process you need to follow in order to downsize your headcount.
However, one of the advantages of ecommerce outsourcing is that you can up size and downsize your staff without any associated red tape, allowing you much more flexibility in how you manage your business and costs.
Dispelling the Disadvantages of Outsourcing
1. Believed Lack of Control
It is often believed a big drawback you can experience while outsourcing eCommerce jobs is a lack of control over the tasks you allocate to third parties.
They are not your employees. Instead, you will be operating in a business-to-business manner, so while you can certainly provide descriptions and leave feedback on how you want things done, you’re not able to manage these types of projects in the same way you could if they were performed by in-house employees.
However, here are Focus Ecommerce and Marketing we always operate the manner the customer requests and any other respectable agency of freelancer should be doing the same. Make sure you define the role and tasks to be actioned, set sensible timescales and KPIs.
Communication should not be something that gets in the way, your outsourced ecommerce agency should be willing to take your call at any time. Although just like an employee if you are constantly phoning or email to ask for an update, essentially that task ends up taking long. Agree regular times for updates, schedule calls and zoom meetings in advance.
Build a rapport with your agency, essentially the relationship is a two-way thing, if your setting unrealistic timelines or constantly hassling the relationship will breakdown, treat them like an employee, to which I hope everyone is treating their employees with the utmost respect. Have an open dialogue with your agency, use their experience to help guide your business.
2. Working in Different Time Zones
If you outsource work to individuals and companies from around the world this can be one of the greatest challenges you will face with your eCommerce store. An urgent messages and project updates may not receive the instant response you were looking for and you may have to wait for several hours, depending on the time difference.
Its important to plan and have clear communication of expectations and time scales. Agree time in advancer to communicate in real-time wherever possible.
Fortunately, on the plus side outsourcing to a different countries and time zones does have its upsides This including being able to operate around the clock. When your in-house employees clock out, outsourced workers are clocking in overseas. So perhaps your looking to expand into a new territory, having a localised outsourced agency allows you to respond to consumers in a timely manner and manage Social Media and Marketing that is relevant to that market.
3. Privacy Issues
Privacy should be a major concern for businesses and consumers especially in the light of GDPR and increasing government regulation. When you outsource areas, such as payments, data storage and customer service, you’re inviting third parties to view your customers’ personal information. You must ensure that the company you engage to outsource are trustworthy, GDPR compliant and take security seriously.
Often the issue can be reversed, At Focus Ecommerce and Marketing we often see gaps in a business’s GDPR practices and as an engaged agency would always make recommendations to help make improvements so that a business if compliant. Again, choosing the correct e-commerce outsource partner is key to getting the best service.
Most businesses will at some point engage in some form of outsourcing, without even realising it and certainly, for most small to medium businesses, the benefits of outsourcing eCommerce tasks, outweigh the negatives.
Still, you need to examine your business closely and decide whether it is the right move for you. You should also consider all the various tasks you may already be or looking to outsource to gain a sense of its value. Often by combining a number of tasks with one agency can lead to a further reduction in costs. You should also consider your Outsourcing partner carefully and focus on using trusted outsource partners.
Start by breaking down the tasks you and your team are already responsible for to see if there are things you could be outsourcing to a third parties. Tasks you and your employees spend too much time doing should be prime candidates. Tasks you and your employees are either overqualified or underqualified for should be prioritized as well. Do you currently have a vacancy, consider this as an opportunity to re-evaluate the need for an internal employee, now could be the perfect time to explore using a 3rd party agency.
Next, determine which tasks and projects you’d like to implement in your business but don’t have the workforce to tackle.
Now that you understand the tasks you want to outsource, do your research to determine how much outsourcing is going to cost. You may need to actually reach out to contractors and companies to find out this information.
Alternatively, now may be the right time to bring an agency that can assess how your business tasks are being run, giving you a non-biased objective review is often the best thing for a business, it could be that a new piece of software could streamline your process. However, staff don’t like change so that detail is unlikely to come from within your team.
Outsourcing Ecommerce Services with Focus Ecommerce & Marketing
An ecommerce store owner cannot afford to have their time and money stripped away by technical issues, as this post has clearly demonstrated. You can save yourself a few headaches when it comes to the technical aspects of running a store by outsourcing those tasks to us.
We are a trusted outsource partner to eCommerce stores in the UK, EMEA, US and Canada.
We can offer dedicated staff for your ongoing eCommerce support, website development, administration needs, Social Media and Marketing. Our team have over 30 years of experience in areas such as Retail, E-Commerce, Marketing, Government, and the Charity sector.