Entrepreneurs are used to wearing many hats: founder, CEO, director of marketing, customer service representative, accountant … The list goes on.
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When you first launch your ecommerce business, handling everything on your own might be feasible. But it won’t be long until you find yourself spending time maintaining your business instead of growing it. (Tweet this!)
Outsourcing is a $76.9 billion USD industry in the U.S. alone, and for good reason. It frees up your valuable time so you can focus on propelling your business further.
Here’s how to outsource work and, more importantly, maximize the benefits:
What Is Outsourcing?
Outsourcing is when you pay an external vendor to provide goods or services instead of performing those tasks internally.
Outsourcing isn’t to be confused with automation, though. Automation is when you use tools to automatically fire off specific actions, according to established variables or prerequisites.
Outsourcing is less of a “set it and forget it” deal. Instead, it requires more trust due to a hand-off of certain business functions to an external resource to handle independently.
Benefits of Ecommerce Outsourcing
For ecommerce retailers, learning how to outsource work — and doing it — has a number of potential benefits:
Grow your business
Perhaps the biggest and most obvious benefit of ecommerce outsourcing is how it gives you more time to focus on bigger ideas. Instead of weighing yourself down with day-to-day tasks or tasks with a big learning curve, you can hand them off to someone else and spend minimal time of your own.
Craig Wolfe, founder of CelebriDucks, has learned how to outsource work in his ecommerce business from the start. “It has enabled us to have dramatic growth,” he says. “Outsourcing creates a level playing field for any business and allows a safe and stable growth trajectory that otherwise would have been very difficult and time-consuming.”
Other etailers have capitalized on the benefits of ecommerce outsourcing, too. “It helps me avoid being in a creative bubble and has freed up a lot of time to focus on improving my site and selling,” Lindsay Vaughan, founder of VAUGHAN, says of figuring how to outsource work so she can grow her business.
Focus on your strengths
Instead of spending time on tedious or time-consuming tasks, ecommerce outsourcing allows you to further develop and use your strengths for the good of your company.
“Outsourcing has allowed me to focus on what I do best, which is sales and customer support,” Bob Ellis of Bavarian Clockworks says. He has learned how to outsource work; specifically, he outsources digital marketing for his ecommerce store while he focuses on customer support.
“Many of our customers have questions about our products and industry,” he says. “Because our online marketing is taken care of, I’m able to devote the necessary time to providing each customer with personal attention.”
More affordable than a full-time employee
To hire a full-time, in-house employee, you’re paying for more than just a salary. There are recruitment expenses, employment taxes, benefits and other employee-related costs to account for as well.
In fact, it could cost you almost 1.5 times the employee’s base salary. So, an employee with a $40,000 USD annual base salary will actually cost you between $50,000 USD and $56,000 USD.
Ecommerce outsourcing allows you to get extra help without all the overhead of a full-time employee — especially when it comes to the etailer who is just starting out. “Outsourcing is awesome for a small company without the head count to hire multiple full-time employees,” Vaughan says. Ecommerce outsourcing has allowed her to acquire team members with desirable skills, but for a more affordable and sustainable cost.
Hire for expertise
Many ecommerce entrepreneurs have figured out how to outsource work to specialized experts, including Vaughan. “My successes have been pretty awesome, and I have a few key people on my team who can help with very specific tasks,” she says.
These tasks may not require a lot of time or attention, but they do require a level of experience that only qualified individuals have. Some examples of these areas of expertise could be developing your website or setting up your inventory management software.
If your business is facing a specific problem — such as high rates of inventory loss — you can also outsource that problem-solving to someone specifically equipped to address that issue.
When You Should Outsource
There are a few circumstances that might necessitate ecommerce outsourcing:
- Overwhelm with your existing workload
- Highly repetitive and tedious tasks
- Need highly skilled expert at a budget-friendly cost
Whatever the reason, make sure the cost of outsourcing is less than what it would cost you to do yourself. You have to give your time a specific value and calculate from there.
Remember: Ecommerce outsourcing isn’t the go-to solution for all your problems. Sometimes, ecommerce outsourcing might not even make sense. Vaughan understands this from experience, when she tried to hire someone to set up her Amazon account and store.
“Ultimately, I couldn’t give them the type of administrative access to my account to ensure it went live properly,” Vaughan says. “I would need an in-house person for this responsibility.”
If you can’t equip your outsourced contractor with the access and tools they need to be effective, you might want to consider looking internally.
What Tasks You Can Outsource as an Ecommerce Retailer
One significant commonality between ecommerce retailers is that they often figure out how to outsource work related to marketing tasks.
Michael Folling, founder of Hula Soap, is one of those. For him, outsourcing has helped drive more brand awareness. “Outsourcing has really helped with getting PR from doing email outreach,” he says. “It’s helped build connections and get mentions on blogs, as well as networking opportunities.”
Don Barlow, founder and owner of Finyl Vinyl, has learned how to outsource work that’s similar: content creation. Similar tasks are often candidates for ecommerce outsourcing, including copywriting, design, content creation, SEO/SEM and social media, to name a few. In fact, the two most-outsourced content marketing tasks are writing and design.
“If you are not willing to hire a full-time marketing or copywriting professional in-house, it’s best to look for a professional who is willing to work for you remotely,” Barlow suggests.
Finyl Vinyl outsourced the creation of compelling blog and social media content, as seen in the example above.
The result? “Today, we’re top-ranking for many vape-related keywords,” he says. “The agency puts a ton of hours in each month.I couldn’t imagine how we’d be able to focus on anything else in our business if we had to provide that level of marketing without outsourcing it.”
Ellis also outsources SEO and content marketing. “Our overall online traffic has increased over 400% the past year, and sales have followed suit.”
For Barlow, “finding leads [is] extremely time-consuming and require[s] hiring additional staff.” The value of doing it in-house doesn’t outweigh the cost of determining how to outsource the work.
From his experience, Barlow recommends “using a lead agency to feed leads to your sales force.”
Use caution — outsourcing your lead generation may not always yield positive results. Ellis tried to outsource his company’s PPC lead generation and saw dismal results. “While this helped us gain momentum when we first started, the strategy was expensive and not sustainable over the long term,” he says.
If you can’t automate your business’s accounting functions, it might be a good idea to learn how to outsource the work related to bookkeeping and other finance-related tasks.
The benefits of hiring a qualified professional to handle payroll, taxes, accounts payable and other related tasks go beyond simply saving you time. It can also help you find the best tax breaks, manage your expenses smarter, and avoid any potential penalties for not correctly handling finances.
A virtual assistant, or VA, is somewhat of a catch-all. There are so many VAs available, and they can do a wide range of tasks. VAs are great not just for ecommerce outsourcing, but for figuring out how to outsource work in a number of industry verticals (if not all).
Whether you need social media management, basic website updates, help scheduling meetings or other mundane tasks, there’s likely a VA you can hire for your ecommerce outsourcing needs — and, at an affordable rate. Wise Advise virtual assistants, for example, have VA services available for just $25 USD/hour.
Inventory and fulfillment
Outsourcing someone to do the inventory management and order fulfillment tasks is a smart decision if there’s not enough work to warrant a full-time employee or you’re skeptical of automation. “If you want to avoid automation in the area of inventory, try to outsource it to a company that does inventory management,” Barlow advises.
You can outsource someone to receive orders, handle drop shipping, manage your warehouse, verify payments and other fulfillment-related tasks. If you’re looking for a fulfillment service, this site compares and reviews various fulfillment service options.
The downside here is that you could potentially lose control over shipping, handling, processings and other associated fees — and lose control over the rates in general.
“Website” is a generic term, but that’s because we’re referring to many types of tasks related to your website. These relate to outsourcing:
- Product description copywriting (which could also fall under the marketing umbrella)
- Website design
- Website development
- Live chat and customer support
One no-brainer is to outsource the development and building of your site. “I’ve outsourced development as it doesn’t make sense to have a full-time person on staff for these types of tasks,” Folling says of his experience diving into how to outsource work on his website. He wouldn’t use an in-house employee frequently enough to justify the expense.”
Data entry is probably the most tedious task any business owner can face — and it’s a great candidate for ecommerce outsourcing.
Data entry for the ecommerce entrepreneur could span anywhere from invoicing and taxes and administrative-related duties to making website updates (such as inventory, new products, etc.) and managing your customer database.
Determining how to outsource this work depends on your specific needs. For example, bookkeeping and taxes should be left to a qualified professional, whereas website updates could fall to someone with less experience and credentials.
As it relates to the product images on your site and marketing channels, there are many ways you can outsource to ensure the highest-quality images.
First, you can outsource the photography itself. Often, this is a great idea, as professional product photographers will capture assets that are probably more likely to convert than the ones you shoot yourself.
If you can’t afford to hire a professional photographer — or even if you can — you can also outsource the photo editing. “I had some very simple photo retouching jobs that I was able to hand off,” says Vaughan. “(It was a) complete no-brainer. I don’t need to waste my money on a senior graphic designer when a basic knowledge of Photoshop will do the trick.”
For Vaughan, outsourcing the photo editing meant she was able to sell more quickly. “I needed to change the background on my images to sell on Amazon, and a freelancer was able to do this so quickly,” she says. “It was that classic ‘better, cheaper, faster.’”
Wolfe has also found success in ecommerce outsourcing with his product images. “The absolute biggest difference-maker has been the creative,” he says. “The staff who handles my pre-production artwork — it was huge for me. (It) lets me compete with anyone, anywhere.”
Product photoshoot styling is another task you might want to consider learning how to outsource the work. Much like the professional photographer, they’re likely to create images that are more effective at generating sales and engagement.
Tips for Ecommerce Outsourcing
Ecommerce outsourcing still requires a certain level of work and effort. Not all ecommerce outsourcing attempts are successful, but there are ways you can increase your likelihood of success.
Know your strengths and weaknesses, and approach ecommerce outsourcing strategically. Just because you don’t particularly enjoy a specific task, it doesn’t mean you need to figure out how to outsource the work.
Here’s a hypothetical scenario to think about:
You might be really great at making relationships with manufacturers, something that doesn’t require too much of your time. And this strength brings a ton of value to your business — you were able to negotiate a 25% discount on materials last year. But, you can’t stand it. Even though you don’t enjoy it, it brings a ton of value to your company. If you were to outsource this task, it’s absolutely imperative that the individual is as skilled in this area as you are.
Make sure your needs don’t warrant a full-time employee. You might have to crunch a lot of numbers — expenses, time needed to do the job, etc. — but it’s important to make sure ecommerce outsourcing is better than in-house.
Learn to let go of control and how to delegate, which can be a challenge especially for the self-made entrepreneur. If you’re micromanaging, it won’t be worth your time or money.
This is especially hard for entrepreneurs who are used to running the show and wearing all the hats. Do your due diligence and find someone you trust, so it will help you release the reigns a bit.
Cover all the bases
Document everything, including follow-up emails after video or phone calls. There are two main reasons:
- Protection for yourself and your business
- Make sure everyone is on the same page
For the ecommerce outsourcing relationship to work, you must make sure the expectations are clear to all parties involved. Contracts and nondisclosure agreements are also essential to ensuring nothing happens that could hurt your business.
Vaughan also advises a clear definition of the role with a comprehensive brief. Write a full description of the duties and expectations for this person(s).
Know who to hire
“The key is finding the right person or party to outsource the work to,” Ellis says. “You should use the same or a very similar process to the one you use for interviewing and vetting employees.”
If you hire the wrong person for your ecommerce outsourcing needs, you might find yourself more in the hole than when you began.
“The biggest challenge to outsourcing for us has been finding the right people,” Vaughan says. “There are millions of [options] out there, but only a small handful can really make a major impact on your business. We have had to do some extremely deep vetting to make sure we were outsourcing to the right people.”
Impulse hires are going to be tempting, but avoid them. “It’s easy to get caught up in the moment and test someone out. It’s better to wait until you find the perfect person or people,” she says.
It’s best to clearly define what you need before you begin your search. “Know what qualities you require in a freelancer or company before making the leap,” says McLaren. “Outsourcing to the wrong team can be a nightmare, but when you find the right team for the right task, it’s golden!”
Ethan Parsa, CEO of Black Note, suggests scheduling a one-on-one chat. “Actually talking to a person via Skype or on the phone is essential for us,” he says.
Check references, look at the testimonials on their website, and read customer reviews to get a better grasp on their strengths, weaknesses and capabilities.