Should eCommerce Site Management be Outsourced? Advantages and Disadvantages of Outsourcing
Despite the economic uncertainty, eCommerce continues to grow rapidly. As indicated by Statista, for several years it has been “an indispensable part of the global retail framework”. And as the entire offline world was in lockdown for almost an entire year, we are not surprised that the eCommerce numbers are going through the roof.
Almost everyone and everything transitioned online. For retailers, the transformation to an eCommerce solution was necessary if they wanted to stay afloat. Actually, it was necessary if they were to stay on the market, at all.
All physical stores were closed and shoppers turned to online establishments to order everything – from groceries to clothes and furniture. Unfortunately, not everyone managed to cope with never-before-experienced challenges. Some lacked the digital competency that is necessary to run an online store, while others who were a bit more successful at it were still shot down by bigger, more experienced competitors.
Is there a viable solution? Of course. There are over 2 billion digital buyers in the world, which means that the target market is big enough for everyone to get a piece of cake for themselves. You just need the right approach.
For many, it was outsourcing.
Outsourcing to the rescue
Outsourcing as a business model comes with a bad rep for being overly complex and difficult to manage when, in fact, it can give your company a competitive edge on the market. If established and managed properly, outsourcing enables you to cut costs while increasing store efficiency.
The following article is composed for both startup eCommerce operations as well as the established ones that are looking to up their game. The aim is to introduce you to the most commonly outsourced processes, as well as the good and the bad you might encounter if you decide to test the outsourcing waters.
What can an eCommerce business outsource?
A part or all eCommerce operations can be outsourced, and the amount of work that you ultimately decide to relocate to an outside team is, in most cases, associated with the following factors:
- Overall budget
- Cost of establishing physical offices locally
- Local talent and expertise
But to determine which operations will be outsourced and which will be completed in-house, an eCommerce business has to enlist all processes.
They are the following:
eCommerce website design
First of all, you need a solid online establishment where your customers can enter (virtually) and get to know you and your products. With your website likely being the only place of contact with your customers, it obviously needs to be an attractive and engaging one.
Here’s what you need to bear in mind: an eCommerce site will likely attract a range of users, not all who are digitally savvy. The online store needs to be user friendly so that anyone can browse around seamlessly and discover the product they came searching for. All elements need to be strategically placed and must load properly in order to satisfy users who land on the site.
If you want to stand out and ensure visitors convert into paying customers, you will need to hire a dependable and knowledgeable dev/design team. The best approach is to search for a team that already has experience building eCommerce stores similar to yours, and such teams will not always be in your vicinity – you’ll have to start searching for talent abroad.
Moreover, depending on the e-commerce platform you choose, you might need to look for specialists that have experience working with this specific platform. For example, most successful Shopify stores outsource web design and development to freelancers from international freelance marketplaces that mastered individual programming languages and the platform’s core functionalities.
Once the online store is up and running, it is crucial to hire a dedicated team that will be fully focused on managing product listings to ensure the information is up-to-date. Product photographs and detailed descriptions largely affect the sales, which is why the website will require full-time dedication.
Hiring someone to work in-house on such matters can be costly, which can be an unnecessary expense in cases where it is not mandatory for the team to be physically close to you to do their job. Owing to the benefits of cloud technology and versatile digital communication tools, it is possible to send all materials to a remote team to manage the website just as well as a local one would.
The same goes for inventory management.
It is absolutely essential to ensure there are no shortages or excess products in the inventory. An online store needs to be overseen by sales experts who know how to predict shopping trends and make sure there is an optimal number of items in stock. Product scarcity will drive clients away (straight to competitors) while excess will cause unnecessary expenses.
The question is: can you find experts in your area who can cope with such issues or you need to broaden your search? By this point, you must know where we are going with this – getting outsourced help.
Dispatch, packaging, and shipping
Delivering products safely and in a timely manner to a particular location is of primary importance for customer satisfaction and retention. If there are no optimal properties in the area where these activities can be performed, or the available ones are so expensive they would drive you in the red, you can look for a more affordable facility across the border.
Additional problems can also arise when the package has to be shipped across a greater distance. The further it travels, the greater the chances are of delays and damages. To minimize risks, eCommerce businesses are advised to establish relationships with local dispatch/packaging/shipping businesses that are more familiar with the target market and will manage potential issues better and faster.
Customer service representatives are the key component, as they communicate with customers directly. If your online business delivers products to a range of locations across the globe, that is, operates in multiple time zones, you are expected to provide the same quality of service to all customers, regardless of their place of residence.
If your customer attempts to contact you outside your work hours or in the middle of the night, who will be there to answer their inquiry? For such situations, eCommerce decides to hire remote employees who will provide a prompt response. Furthermore, hiring a local is also beneficial when the target customer speaks a foreign language, as the remote employee will aid you in breaking the language barrier.
An eCommerce store can resort to traditional and digital marketing promotion methods, however, the latter one is becoming a much more popular option. Whichever option you go for, know that you need a talented marketing team by your side that will know the ins and outs of your business. No, they don’t have to be literally by your side at all times – they can be hundreds of miles away and still be able to get your message across and convince the target audience that you are the online store they should shop at.
Outsourcing: the good vs the bad
Considering all that’s been stated previously, outsourcing clearly has its advantages, as well as disadvantages.
If the outsourced team works in a different time zone, you actually get right-hand men who will take over while you are resting from the long day’s work. For this reason, many eCommerce establishments choose to outsource their website and customer support, as well as the team that handles orders, packaging, and dispatch. That way, shipping delays are minimal, your customers always have a service representative to turn to, and your website is up and running at all times.
Access to remote markets
A local team will aid you in getting to know a target market that you have never attempted to reach before. They will introduce you to the local customs, help you deal with cultural and language barriers, and represent the first point of contact for the local clientele.
If you decide to establish remote offices in lower-income countries, you could discover new team members who have the same (or even richer) skillset as the local talent but agree to work for a fraction of a price. Additionally, if you need to establish distribution centers, you could tap into the foreign real estate market and find a decent property at a low monthly fee.
Greater employee pool
As previously stated, you won’t always be able to hire local employees who satisfy all the employment criteria. By expanding your search to a global scale, you get to know experts who charge less and have the exact set of skills and experience you are in need of.
Lack of transparency
Managing a remote team comes with a set of challenges even managers with years of experience find difficult to cope with. Overseeing their work and ensuring all is completed in time and in accordance with the defined criteria is near impossible. And we say “near” because there are digital and software solutions that now help you gain better insight into their work, even if you are not standing over them at all times.
The further you travel, the greater the time difference will be. While we indicated this as a plus a few paragraphs ago, you need to know that different work hours trigger delays in communication. Meetings are held at inconvenient work hours, urgent questions get answers too late, and problems just keep piling up while either you or the remote team are sound asleep.
Different cultures can have a completely different view of a single situation. Even when you believe you’ve clearly stated the objective of a certain task, the other person may have their own way of dealing with it. Consequently, the results may not be what you expect.
To outsource or not to outsource, that is the question only you can answer. Jot down the pros and cons for your specific case, calculate how much you would gain and how much you would lose. Will you profit from outsourcing or will your business spiral downwards?
About the Author!
Nick Brown is a blogger and marketing expert. He is an aspiring street artist and does Audio/Video editing as a hobby.