Running an online business can be the thrill of a lifetime. It’s also a labor-intensive endeavor that can eat up huge amounts of time. But did you know that not all ecommerce businesses hire in-house staff? Some use ecommerce outsourcing services, where a third-party company with specialized expertise handles tasks like digital marketing or inventory management.
Here’s how online businesses collaborate with outsourcing companies to avoid the effort and cost of hiring a permanent workforce.
What is ecommerce outsourcing?
Ecommerce outsourcing refers to delegating particular ecommerce functions to a specialized service provider. It’s part of a larger industry known as business process outsourcing (BPO). BPO companies typically serve many businesses, applying the same specialized skills across their client portfolio.
An ecommerce business can assign some duties to its in-house team and delegate others to an outsourcing company. For instance, an online store may focus on a few core competencies, like order fulfillment and customer service, while handing over technical web development to an outsourcing partner.
Ecommerce outsourcing companies can fulfill a wide range of functions, including but not limited to the following ecommerce services:
- Website development and design (including optimizing for mobile devices)
- Website maintenance
- Inventory management
- Order fulfillment and shipping
- Ecommerce customer service and support
- Digital marketing services (including SEO, SEM, and social media management)
- Content creation (including blog posts and product descriptions)
- Photography and graphic design
- Payment processing and fraud prevention
- Return and exchange management
- Data analytics and reporting
- Data security
- IT support and maintenance
- Marketplace management (Amazon, eBay, Instagram, etc.)
Advantages of ecommerce outsourcing
- Cost savings
- Focus
- Access to expertise
- Lean management
- Scalability and flexibility
- Reduced time to market
- Improved customer experience
Optimize your ecommerce business by outsourcing various business processes to third-party experts. Here are the benefits of outsourcing services:
Cost savings
Outsourcing lets you access specialized services without training employees and managing labor. This helps lower labor costs while maintaining high-quality output. You can save money on machinery and office equipment if outside teams handle certain tasks.
Focus
Delegating non-essential ecommerce tasks to external experts lets you concentrate on your core business functions, such as product development, brand building, and creating a positive customer service experience. This promotes better use of resources and greater efficiency.
Access to expertise
Outsourcing offers access to a global talent pool of specialists who excel in their respective domains. Whether it’s digital marketing, logistics, or customer service, outsourced employees can deliver better performance and outcomes.
Lean management
Strategically outsourcing certain ecommerce operations lets you tap into the lean management method popularized by Toyota, now used by businesses worldwide. Lean management entails maximizing value for customers while minimizing resources, time, effort, and costs. Outsourcing acts as a catalyst for these efficiencies.
Scalability and flexibility
Outsourcing partners can often scale to meet fluctuating consumer demands within the ecommerce industry. They can quickly adjust resources, staffing, or services during peak seasons, unexpected growth periods, or slowdowns.
Reduced time to market
Working with specialized service providers can expedite processes such as website development, marketing campaigns, or inventory management. Swift execution can speed up product launches to start selling online quickly.
Improved customer experience
Outsourcing sales support and customer service to experienced providers can increase customer satisfaction. Access to round-the-clock customer support, multilingual assistance, and efficient search tools can improve your company’s reputation among online shoppers.
How to choose the right outsourcing provider
Before outsourcing various tasks to third-party providers, consider the following tips:
1. Seek expertise
Ensure that potential vendors offer expertise specific to your ecommerce platform needs. You may find a vendor who excels in digital marketing services, like creating ads for Google and social media platforms, but falls short in order fulfillment or inventory management. If so, consider hiring an alternative outsourcing partner for these other ecommerce tasks.
2. Look for cost savings
The right outsourcing partner can help you reduce costs as you streamline your operations. Their flexible hiring process eliminates the need to hire your own staff for every task.
Shop around for competitive price offers, and ask potential vendors if they offer introductory price promotions or special rates for bundled services.
3. Prioritize data security
Securing customer and company data is critical. Assess potential providers’ security measures, data protection protocols, and compliance with ecommerce laws. Ensure they adhere to necessary standards (like GDPR, HIPAA, etc.) and can suitably protect online customers from hacking and data theft, and use SSL certificates to encrypt data transmission.
4. Seek scalable options
To thrive in the ecommerce space, you need the ability to scale up to meet increased demand. Look for a solid outsourcing partner that can upsize their services as required. Assess their ability to accommodate growth, handle fluctuations in demand, and adapt to changing demands.
Ecommerce outsourcing FAQ
Is outsourcing good for ecommerce?
Third-party ecommerce service partners can offer competitive pricing on everything from digital marketing to technical tasks like web server management, which can help online stores hold down costs. This lets your in-house team focus on what it does best.
What is the difference between ecommerce insourcing and outsourcing?
Ecommerce insourcing involves hiring in-house staff to handle the business operations of your ecommerce business. Ecommerce outsourcing involves hiring outside companies to oversee specific operational tasks.
What are the types of ecommerce outsourcing?
The types of ecommerce outsourcing include functions like logistics, customer service, digital marketing, IT support, content creation, and online marketplace management.
