Outsource eCommerce: The Ultimate Guide

Outsourcing refers to the practice of using a third-party contractor’s products and services to create goods and provide services. Today, many small to medium-sized businesses outsource one or two tasks in their operations.

Outsourced tasks are those that would typically be performed by in-house staff.

But for one reason or another, they are delegated to a third party.  

In eCommerce, such tasks include website development, marketing, writing product descriptions, handling support tickets, inventory management, and providing technical support. This article will explore the benefits of outsourcing for businesses and a few disadvantages that come with it.  

We will also try to put some of the controversies to bed and give you valuable tips on where you can get eCommerce services for the best outsourced experiences.

Outsourcing vs Offshoring

Offshoring is in many ways similar to outsourcing; businesses use it to cut costs, and it involves having certain aspects of a business handled by someone else. That’s why offshoring is often confused with outsourcing. And while the two can certainly be combined (offshore outsourcing), they differ significantly.

Offshoring is the practice of moving a department/section of your operations, all even your entire business operations, to another country. This is particularly common in the manufacturing industry, where the cost is relatively high in western countries.  

Thus, many companies move their operations to countries like China, Mexico, and Taiwan, where the labor costs are cheaper. During offshore outsourcing, businesses enter into an agreement with a third-party company outside their own country. This third-party contractor will provide the labor, transport, or any similar service as long as the business operates in the new country.

Why do companies outsource?

The biggest motivator of outsourcing is the cost. Generally, outsourcing is considered an alternative if the associated costs are lower than hiring/using in-house labor.  

It’s also considered in cases where the in-house labor lacks the skill to complete a particular task, and there is not enough time or money to train them adequately. For an eCommerce store, such situations arise in things such as website development and technical support. Depending on the size of the business, they may also need to outsource accounting services.  

This allows the business to save time and money and enjoy many other benefits.

Ethics of outsourcing

Most people will agree that outsourcing is a good thing. But it's still hard to ignore discussions around the ethics of outsourcing.  

These are often centered around employee welfare; most opposers claim that outsourcing prevents employees from receiving higher wages,   benefits, and enjoying job security. But is it really? For many small businesses, outsourcing is a matter of survival. They are in no position to hire full-time employees. So, without outsourcing, they would be operating at a competitive disadvantage.

Outsourcing also allows them to divert valuable resources to other areas of the business, like research and development.  

This boosts the company’s revenue in the long run, allowing them to hire more full-time workers.

Furthermore, outsourcing has certain benefits to the global economy. For instance, big manufacturing companies that practice offshore outsourcing create jobs in the countries they operate in. Some of the benefits businesses enjoy through outsourcing are transferred to the end consumer. For example, when the company cuts down on costs, they transfer those savings to customers who now enjoy cheaper product and service prices. So, unless the outsourcing companies are involved in unscrupulous practices, it is not bad.

eCommerce business roles that you should outsource

 Here are several online business roles that you should outsource to eCommerce service providers.

• Website and graphic design: If you aren’t skilled enough to design an appealing eCommerce website, why not leave that to the experts?  
• Graphics designers can also help your eCommerce business.  
• eCommerce website development and maintenance: Building an eCommerce website is complicated, and so is maintaining it. Outsourcing these tasks allows you to concentrate on other areas of your business without putting too much at stake.  
• Product information management: eCommerce stores can’t exist without product descriptions. If you don’t have enough time to write these descriptions, you can always hire a copywriter to do so.  
• Content creation: Other types of content, like blogs and videos, are also crucial to the success of an online business.  
• Digital marketing services: Effective marketing on social media is a skill that very few possess. If you want marketing strategies that will promote and grow your brand, you’ll want to have an excellent digital marketing team on your side. You may also need to outsource other aspects of digital marketing, like search engine optimization (SEO), search engine marketing (SEM), content marketing, and email marketing.  
• Customer service: Hiring a full-time customer service department can be expensive. So, until your business is big enough to afford that, it's best to outsource this service.  

Benefits of eCommerce outsourcing

Outsourcing comes with some significant advantages to an eCommerce store. Oftentimes, it’s these benefits that allow the outsourcing company to grow to the point where they can hire in-house staff for most of their work.

• Saves money

The desire to cut costs and save money is the biggest reason companies assign tasks to third-party contractors. But how exactly are these savings achieved? In-house employees carry a lot of expenditure. This is because they require a full salary and employment benefits. They also need training and, depending on the task, a new office or even an entire department set up for them. This is often worth it, especially for core business tasks you need performed all year round. But for other seasonal jobs, the cost of hiring a full-time employee is way too much. An excellent example is accounting for small businesses. Do you hire a full-time accountant, or do you pay someone to come and balance your books when the time is right? Certainly the latter. If you hire a full-time employee for seasonal work, you may find yourself cutting your budget in other areas to keep your operational costs low.

• Saves time

Outsourcing specific tasks also save you time. For instance, website design and development take time and concentration.  

When you outsource this service to a freelance developer, you can spend that time on other essential aspects of your brand, like customer research and outreach, to help grow your brand’s outreach. Having more time also improves the efficiency of your operations. Since you and your employees don’t have to handle multiple tasks, you’ll be much more efficient in the task allocated to you. This increases productivity and morale around your workplace.

Related: How To Outsource Your Entire Ecommerce Store on Legiit

• Wide talent pool

Thanks to the internet, you can access a talent pool that spans the globe.

This means that the chances of finding the particular skill or credential you’re looking for are pretty high.  

If you can match their price,   you’ll be able to grow your eCommerce store to its full potential in the fastest, most efficient way possible. This isn’t as easy with in-house hiring. Remote work is an option, but only big corporations have been able to implement such effectively so far. So, you’ll be limited to a small pool of job candidates from your local area or city; that is, unless you outsource. The good thing about outsourcing is that you can use it to prequalify candidates who are willing to move to your headquarters and become full-time employees. That way, you get to secure top talent permanently.

• Start projects quicker

Third-party contractors already know what they’re supposed to do. They are qualified candidates and agencies that will get to work immediately after you reach an agreement. This allows you to start projects quicker and more efficiently. On the other hand, hiring full-time employees means spending time recruiting and onboarding new employees. You need to post job ads on multiple platforms, interview candidates, determine those that qualify, and induct them into the workplace. This process is long, tiring, and unsuitable if you’re trying to start a project as soon as possible.

• Flexible hiring process

Outsourcing has the sort of flexibility that is absent in full-time hiring. You have a sudden surge in workload? Hire someone to help you out for a week until things get back under control. This feature is handy in eCommerce during the holiday season, when offer sales like Black Friday, Cyber Monday, and Christmas attract more traffic than the rest of the year. As a result, there will be more orders to process, products to package and ship, and support requests to handle. Outsourcing allows you to hire seasonal workers to cover such times and keep operations at optimal levels until the surge is over.

• Existing employees can learn something

Some businesses outsource because they lack the skills to deal with the current issue. But if you have employees working directly with the third-party contractor, the arrangement presents a situation where your employees can learn and develop those skills. Eventually, you won’t need to outsource anymore since those employees would have acquired the skills necessary to handle the task. Note that this works best with onsite contractors who can share their skills firsthand.

• Less red tape

There are lots of regulations around hiring staff. And although these vary depending on your jurisdiction, they can get pretty problematic.  

This is especially the case if your business’ need for labor fluctuates throughout the year, and you need to adjust the payroll accordingly. There may be a lot of regulations to deal with in the process. This is where the flexibility of outsourcing comes in. Since you’re working on a per-project basis, you can better manage the ups and downs that come your way throughout the year.

The disadvantages of eCommerce outsourcing

Outsourcing isn’t all petals. Like with every rose, there are some thorns that, if you’re not careful, will sting the hell out of your business.

• Privacy issues

Privacy is one of the biggest concerns in the digital age.  

And considering that eCommerce websites typically store their customer's location and payment information, a data breach that puts this information in the wrong hands is enough to sink your entire business. When you outsource areas like data storage, payment, and customer service, you’re exposing your customer’s data to a third party. Similarly, when you outsource your research and development, there’s a risk that your product ideas and strategies will be stolen. So, you must ensure that your outsource partner takes security seriously, is trustworthy, and is GDPR compliant.

• Communication can get difficult

Outsourcing brings the global talent pool right to your door. But with this comes the issue of timezones.

If you’re working with individuals or a company from another country, instant replies can be pretty rare. You may have to wait a couple of hours to get a response to urgent messages and project updates. Fortunately, this is an issue that you can efficiently deal with. All you have to do is tweak your schedule so that you can have some time crossover to enable real-time communication as much as possible. You should also remain understanding and keep your expectations in check regarding the communication time frames.

• Lack of control

Outsourcing will have you operating in a B2B environment.  

So, you won’t have much control over the third-party company since they’re not your employee; they’re more of a partner. Of course, you can always communicate your expectations and set the standards you want the project to meet. But how exactly your outsourcing partners go about it will be out of your control. This is why clear communication between both parties is crucial to the success of outsourcing.

• Issues with employees

Your in-house team won’t always approve when you decide to outsource, even if it's with good intentions.  

This is especially true when you outsource duties that they typically handle. They may feel that their job is under threat from the third-party contractor, causing their morale to drop. As a result, their efficiency drops over time. Others will try to take on as much work as possible to prove that they don’t need the outsourced help. If this goes on long enough, they’ll overwork themselves causing burnout and issues in quality.

Grow your online business

Outsourcing is great; even greater if you can find the right eCommerce expert for your store. Fortunately, Legiit is home to hundreds of excellent eCommerce freelancers. Hire one today and watch your eCommerce businesses grow.