Complete Guide to Practice Ecommerce Outsourcing
It takes an idea, some startup capital, and the initiative to start an eCommerce business. Your primary goal after successfully launching your store is to recoup costs.
Once you reach break-even, your profit margins will gradually increase, but after this point, you will be faced with important decisions that will determine the direction of your online business.
Companies use outsourcing to reduce costs. With the growth of the internet and the freelancer economy, businesses have increasingly used eCommerce outsourcing to optimize operations and reduce expenses. In addition, you will have more time to focus on growing your business.
What Is eCommerce Outsourcing
You outsource services or products you would traditionally do in-house by your company's employees to someone outside your company.
Through the 1990s, this business practice became integral to business economics. eCommerce companies are increasingly using outsourcing as a means of cutting costs, reducing workloads, and ultimately, improving scalability.
Outsourcing comes with its own set of pros and cons. Yet, when properly implemented, it can be an effective way to reduce costs, and provide eCommerce businesses with a competitive advantage.
When Should You Start Outsourcing in eCommerce
You can outsource eCommerce store operations to freelancers in several situations. Here are a few common examples:
- There is too much work to do: It may be time to start outsourcing when you can't keep up with all the things you have to do. Your business will suffer if you don't since you can't do it all.
- You're buried in business operations: Imagine being able to spend more time managing emails and doing the things you enjoy in your business, rather than managing emails or completing trivial tasks. Outsourcing the rest will free up your time.
- Slow business growth: Business growth strategy is often neglected when you spend all your time on mundane business tasks. This results in you and your business becoming stagnant or, worse yet, falling behind. Reevaluate your strategy if your bottom line suffers or does not grow month over month.
- Your business is no longer enjoyable: Business owners who get caught up in the daily tasks and no longer have fun will burn out. Change is needed if you are no longer enjoying your business. Let someone else do the tasks you don't like or don't have time for so you can spend more time on what you do like!
Common eCommerce Tasks to Outsource
You need to determine which eCommerce tasks to outsource once you realize using freelancers is the best option for your business. A freelancer can handle just about any eCommerce business task, but here are a few of the most common:
Marketing your eCommerce business is crucial to your success. However, this may not always be your responsibility. In particular, outsourcing to experts in each area, such as content marketing, will provide a better result when you lack the skills and confidence to do it yourself.
The best strategies for eCommerce marketing might be proposed by a professional. The following eCommerce marketing tasks should be outsourced:
- Photographing products
- Blog posts
- Posting on social media
- Email marketing
2. Designing & Developing Websites
Web development and design are better left to the experts if you aren't an expert. Instead of spending time on tedious tasks like developing an eCommerce site, you should focus on growing your business and core strengths.
You can outsource these tasks in two ways:
· A freelance web designer or developer who works independently. It is important to reach out to different professionals in this field to have a chance to reach more and choose the ones who will assist you in achieving your goal as quickly as possible.
· Hiring an agency that will work with you. They will ensure that your projects are completed as smoothly as possible.
3. Customer Service
Salesforce research indicates that 47% of customers won't buy from a company if they receive a subpar experience. When customer service staff do not address their concerns promptly, this is one of the most common causes of complaints.
Most customers' concerns relate to product inquiries, orders, returns, and exchanges. Developing a customer service team with the necessary skills and knowledge may prove beneficial. Nonetheless, if your team cannot keep up with the growth of your business and the customer demands, your results will be negative.
4. Bookkeeping & Accounting
Profits have little to do with accounting and bookkeeping, but they are critical supporting elements of any business.
Outsourcing bookkeeping and financials is one of the most significant advantages of this process. By using it, your company can set up its entire accounting process more efficient and save a lot of money.
It is no longer necessary to hire employees or rent an office to accomplish these tasks. Outsourcing is much more affordable and more effective.
Outsourcing bookkeeping and financials can be a time-saving solution as well since these are laborious tasks. This will free up your time for more productive activities.
5. Graphic Design
For best results, outsource design or visual content tasks unless these are your company's specialties. The first thing customers will notice about your store site is your visual materials, such as your logo, banner, product images, and videos, all of which are part of your branding.
6. Managing Inventory
You will have more products in your storage when your business expands and your marketing is successful. Your shipping and storage will grow accordingly. Your inventory will become overwhelming.
You need an inventory management outsourcing company. A third-party logistics provider can help you to meet the needs of delivery despite the inventory overload.
If you outsource inventory management, you can save a lot of money since you don't have to hire staff for inventory tasks and rent a warehouse for merchandise.
7. Data Entry
Data entry can be tedious when dealing with bulk products. Tasks include taxing, invoicing, adding new products, deleting old products, or updating websites. Outsourcing is the ideal solution for repetitive tasks.
When you have more prominent and complicated data entry, you should outsource the task to a company that offers a variety of product data entry services.
Best Practices for Outsourcing your eCommerce Business
1. Be Clear about Your Objectives
Knowing and communicating your outsourcing goals is the first best practice. It is important to know your goals if you are going to succeed at anything. The goals should include cost reductions and customer satisfaction improvements. It will be easier to find the right provider once you know what you want out of the process.
Outline your expectations of your provider after you have identified your goals. How much of the existing project would you like to outsource? The level of engagement you want from the outsourcer in terms of decision-making authority and functional responsibility.
2. Consider Hidden Costs
You should always inquire about hidden fees before you sign any contract. Additional services, software upgrades, or technical support may be charged extra by some providers. Make sure you're not being charged by the hour since this could lead to unexpected costs. Ask if certain services are included if you think you won't need them.
3. KPIs Are Important
You can use KPIs to track and measure the success of your outsourcing relationships. If you are evaluating KPIs for a particular project, you should be as specific as possible.
Depending on the tasks you are outsourcing, you will track different KPIs. Before you outsource your work, identify which KPIs are relevant to your projects and tasks. This will allow you to determine how well the outsourced work is performing.
4. Respect Cultural Differences
Next, we will look at a best practice that is often overlooked - understanding and being open to cultural differences. You will have trouble adapting to a new culture if you don't know anything about it. Cultural differences can catch businesses off guard when they outsource to another part of the world.
Outsourced projects and tasks must be successful when you understand, accommodate, and consider all relevant cultural differences that may arise. Your business may suffer through lost investment and you will earn a reputation for being difficult if you aren't.
5. Talk about Ownership Early on
You should discuss who owns what when you start working together. Before you can proceed, you must decide who owns what. If not, one party might claim credit for work done by the other. Before beginning any project or task, you will want to clarify this important issue.
6. Write a Detailed PrivacyPolicy
Data and privacy policies are a must for every company. The policy should outline how information gathered between two parties during a relationship will be handled. Whether personal information will be shared with third parties should also be addressed in the policy. Your outsourced workers' privacy can be protected in this way.
7. Communicate Constantly
Almost our entire list of best practices for outsourcing includes communication, and with good reason. Staying in touch throughout a project is essential. Regular communication prevents misunderstandings and keeps everyone informed. Both parties are also kept informed if the scope of the project changes.
There are several ways to communicate:
- Meetings regularly: Meetings will be held in person or via phone/video conference to ensure everyone is kept informed and on track.
- Status reports: Regular updates on the progress of the project as well as an overview of what has been completed should be sent.
- Project management tool: By implementing a centralized platform, you can communicate with outsourcers seamlessly. It features file sharing, progress tracking, status updates, etc.
You should deal with any issues that arise during the project as soon as possible. By delaying a response, everyone will be confused and frustrated.
Never hesitate to reach out for help if you don't know how to handle something. You should be able to get help from your outsourcer with whatever you require.
It is a good idea to check in regularly with your outsourcer, even if everything is running smoothly. It allows you to make sure that the project is on track and that they're still meeting your expectations. Additionally, you can provide feedback and make sure their work is up to your standards.
8. Know the Capabilities of Your Provider
You should understand the capacity of a provider before agreeing. How busy are they typically? At what rate do they work on multiple projects simultaneously? How many people work with them?
It is important to ensure the provider can handle a large project that needs to be completed in a short period. Don't start the project only to discover that the provider is too busy to accept any more work.
You can be more flexible with your provider's capacity if you are outsourcing a task that is not time-sensitive. Just make sure to talk about this upfront to avoid surprises in the future.
9. Don't Only Focus on Costs
Our next tip in our list of best practices for outsourcing asks you to not be overly concerned with costs. Cost should not be the only factor determining which vendor to hire, even though it may be tempting to select the cheapest option.
Be sure to consider other factors such as quality, reputation, and experience. Though it may be tempting to go for the cheapest option, it is often worth it to invest in a quality outsourcer.
10. Select the Right Provider
Outsourcing is not for everyone. Every provider has advantages and disadvantages. A good outsourcer will fit your business well.
Consider the following:
- Work types you need to be done
- Business size
- Experience level
- Services offered
- Geographical location
- Languages spoken
Finding the right provider for your business can sometimes be difficult without the help of an outsourcing broker. As an experienced outsourcer, they can assist you in finding an outsourcer that meets your needs.
A growing number of eCommerce companies are opting to outsource. These companies already have several advantages as a result of outsourcing.
When you choose eCommerce outsourcing for the first time, it is natural to fear it because it is both beneficial and risky. Consider outsourcing some of your critical tasks, however, if you are looking to increase your profits and expand your business. You'll achieve your goal much faster this way.