Ready to expand? Eight e-commerce functions you can outsource
There comes a point in the life of any business where it doesn’t make sense to do everything in-house. That point may be right at the beginning, simply because the time, skills or other resources aren’t available within the company. Or it may come later on as the company grows and starts looking for ways to become more efficient, essentially scaling up while keeping costs down. If either of these scenarios applies to your e-commerce business, it may be time to consider outsourcing.
What is e-commerce outsourcing?
Outsourcing refers to contracting out certain tasks or processes to a third party, usually on an ongoing basis. The third party may work either on your business premises or their own, depending on what they are doing for you.
Traditionally, especially for e-commerce businesses, it was mainly fulfillment that was contracted out. In today’s competitive environment though, you may decide to outsource many more tasks.
There are two main aspects to consider here:
- What are all the tasks you could outsource?
- Which of these would be better to outsource than to keep in-house? We investigate this next month.
Let’s look at the possibilities for the first question.
What can be outsourced for e-commerce?
As a starting point, we provide some functions you could outsource below. There may be others that apply to your specific business and it’s worth working through your process flows to identify them.
Then, for each possibility, consider the pros and cons of outsourcing that for your business, along with possible alternatives.
1. E-commerce platform and IT infrastructure
Technology is a specialised field and it’s constantly evolving. Running an e-commerce business requires the design, development and maintenance of a website, as well as hosting solutions and back-ups, amongst other things.
Unless you have dedicated in-house resources available to do all these things, as well as keep up with the latest developments, it makes sense to outsource your e-commerce platform to a SaaS provider . A specialised provider can also advise you on other solutions, such as integrations and plugs-ins, to save you even more time and money.
While you may be able to do some aspects of basic marketing yourself, there are others which require specific expertise and/or plenty of time to implement. You may be better off outsourcing these, especially if your business is fairly new and you have limited in-house resources. Also bear in mind that experts are likely to do them better and more quickly, saving and in fact making you more money in the long run.
Some of the marketing areas you could consider outsourcing are the following:
- Social media marketing: To do this well requires a certain amount of passion for social media, a well-planned monthly schedule, ongoing monitoring of the results and time to respond quickly to customers connecting on social media. If you are taking care of this yourself, Hootsuite makes scheduling social media much less time consuming.
- SEO/SEM: This definitely requires specialised expertise and experience, as well as the right tools.
- PPC: Ads that go out via Pay-Per-Click, display or print are usually part of a marketing campaign with a beginning and an end. Especially when you’re starting out, these are particularly good to outsource, so they only cost you money when the campaigns are running.
- Email marketing: Get expert advice up front on how best to do this. Then automate as much as possible by integrating your e-commerce site with email marketing software, like ContactPigeon , for example.
- Analytics and reporting: Integrating Google Analytics or other analytics software with your site will give you a lot of data about your site’s performance. You may need a marketing specialist to interpret it for you though.
- Merchandising: Knowing exactly how to display products can make a big difference to conversion rates and order totals.
- Reputation management: Keep an automatic eye on what’s being said about your brand with “listening” software such as SocialMention. A PR expert can then help you manage your reputation on an ongoing basis or just during a crisis
- Graphic design and artwork: A creative designer can ensure your branding and promotional material really make an impression. A freelancer or your web development company should be able to take care of that for you.
- Market research: Doing this well requires an objective eye, an understanding of research methodologies and access to a lot of accurate data.
- Content creation: At the very least, you need content for your website and marketing material. If blogging, social media and/or newsletters are also part of your acquisition or marketing plan, you need a continuous flow of well-researched and well-written content for those channels too. This is a time consuming job, but very necessary in today’s competitive market.
- Images: High quality photos and videos make a huge impact on sales, and these may require specialist editing too.
There are many aspects involved in fulfilment, including receiving new stock, storing it and managing the inventory, processing orders and then packing and shipping them. How much of this you can comfortably do in-house depends on your resources and your logistical expertise.
You will also need to carefully analyse the cost impact of contracting out some or all of your fulfilment needs. When you take into account indirect costs though, such as rental of storage space, paying picking and packing teams and managing the process, it may well be worth outsourcing this area.
At Comalytics, we already offer automation of one part of the fulfillment process through integration with SmartFreight, which is a very effective delivery outsourcing solution.
4. Product information management services
Running a successful e-commerce business requires keeping all your product information up to date on an ongoing basis. This involves managing stock status and product images, as well as creating unique SEO and customer-friendly product descriptions. This is an ideal job to outsource to freelancers or to do using a bulk product data entry service.
Integrating your e-commerce site to your ERP system will eliminate many of these manual processes, essentially ‘outsourcing’ them to software.
5. Customer service
Great service is one of the most critical aspects of customer satisfaction, and hiring specialists in this area ensures you do it well. Outsourcing also takes the job of dealing with routine enquiries and order issues off your hands.
Think about which aspects of this area you’d like to outsource, such as phone, email and/or live chat, then consider options like Zendesk , for example. Also consider outsourcing this service at certain times, for example, on public holidays, after hours or over weekends, so your customer can have 24/7 contact with you.
6. Order processing
Order processing involves validation, placement and tracking of orders, as well as dealing with cancellations, changes and refunds where necessary. When you first start your business, you probably won’t have that many orders and a Virtual Assistant could handle it if you don’t want to do it yourself. As your company grows though, you might consider upgrading to a Business Process Outsourcing (BPO) company to take care of all or part of the process.
There are some areas of your finances you may well be able to handle yourself, especially at first. As your company grows, using appropriate software for functions like accounting and payroll will make this much easier. When it comes to strategic financial decisions or tax compliance though, it’s best to consult an expert right from the start.
Your e-commerce site can be integrated with your finance or accounting system. Just like an ERP integration, automating most of the ordering and invoicing process makes your life much easier.
Likewise, you can probably do your initial hires yourself, and train up your first line of staff. As your staff needs become more complex though, outsourcing the recruitment, training and contractual side of human resources makes a lot of sense.
The bottom line…
Outsourcing those areas of your e-commerce business that are too time-consuming, or that you don’t have the resources or expertise to deal with in-house, makes good business sense. After all, efficient processes that make the most of your available resources can only benefit your bottom line.
What areas of your business have you outsourced and never looked back? Share any tips or comments below