How to Run an eCommerce Business: Outsourcing vs. In-House Work

This is a guest post from Career Karma, the easiest way to find a job training program online. They help over 1 million workers navigate their careers every month through advice and coaching. 

Running an eCommerce business can be challenging for both first-timers and established business owners. Primarily, it’s crucial to understand the market and then determine the tasks that can be outsourced and the ones to keep in-house. When making these decisions, it’s important to consider key factors including language, location, company needs, and quality of services.

Generally speaking, outsourcing is quickly becoming the go-to service for both small-scale and large-scale businesses. In fact, research shows that the global outsourcing market is valued at approximately $92.5 billion, and nearly 74 percent of businesses rely on eCommerce outsourcing services. However, to run a successful eCommerce business, you must understand the ins and outs of outsourcing and in-housing.

This article will explore the benefits of both services and determine the right tasks to outsource and keep in-house.

What is the Difference Between Outsourcing and In-Housing in Ecommerce?

The difference between outsourcing and in-housing is primarily based on the delivery model. eCommerce outsourcing involves hiring a third-party company or contractor to complete duties and responsibilities related to your company. On the other hand, in-housing or insourcing involves completing all company operations with the help of in-house staff.

Benefits of Outsourcing Work in Ecommerce

Focus on the Company

When you’re overwhelmed at work, it’s easy to overlook significant aspects of the company. Hiring third parties lets you focus on your core and uphold the company’s vision through brand-influencing activities. For example, you don’t need an entire department for content creation, as you can outsource content creators and retain a smaller sales and marketing team.

Cost-effective

Outsourcing tasks can save your company a lot of money. Full-time employees require a monthly salary, benefits, and training. You must also maintain office equipment and invest in system integration, logistics, web development, and back-office support. Investing in a third-party contractor allows you to save money because you’ll invest less capital on these necessities.

Enhances Productivity

Outsourcing tasks is an excellent approach to improving your organization’s productivity. When you rely on a small in-house team to handle all processes, you’ll typically experience less productivity. Outsourcing allows you to work with a larger team. The team handles customer needs and achieves company goals on time. You can also keep up with your competition without hiring more employees.

Offer Flexible Hiring Processes

In-house employees usually have long-term contracts. However, outsourcing tasks offers a flexible hiring process because you can find employees based on need and project type. For example, if you’re working on a three-month project, you can outsource short-term contractors without long-term obligations.

Keep up with New Technology

The eCommerce sector is growing rapidly, thanks to regular tech advancements. Outsourcing allows you to find skilled individuals in different areas, like web design, programming, data analytics, and artificial intelligence (AI). As a result, your company will maintain high standards in technology.

Five Types of Work You Can Outsource

Selecting which tasks to outsource can be challenging because you must safeguard company data. You must consider several factors and work with the right contractors. However, despite the seriousness of the process, the tasks below are perfect for outsourcing.

1. Content Creation

Blogging, social media posts, videos, infographics, and podcasts are pivotal in taking your company to the next level. However, you don’t need a full content creation department within your organization. Instead, outsourcing these duties to content creators and influencers on different platforms creates extensive brand awareness for your company.

2. Marketing

Content creation is part of marketing because it tackles an array of social media platforms like Instagram, Facebook, TikTok, and blogs. However, the marketing team also handles merchandising, email marketing, Pay-Per-Click services, analytics and reporting, brand management, and research. You can outsource all of the marketing duties of the organization to skilled contractors.

3. Order Fulfillment

You may outsource your order fulfillment duties to an experienced fulfillment partner. Usually, the contractor will store your products in their warehouse, packing and shipping them upon request.

For example, MyFBAPrep monitors inventory and handles logistics. In fact, outsourcing order fulfillment allows you to manufacture more while eliminating the stress of meeting deadlines and handling large consignments or international shipping.

4. Web Design and Maintenance

You may feel apprehensive about opening your platform to a total stranger. However, unless you’re highly skilled in web design and development, you should outsource this task. The increase in coding boot camps allows more people to sharpen their programming and web design skills, opting for freelance gigs. You can take advantage of these professionals to tackle these duties while you focus on growing the business.

5. Administrative Tasks

Virtual assistants (VAs) are becoming popular as companies seek to outsource various administrative tasks. You can hire a virtual assistant to manage your schedule, create reports, prepare travel arrangements, manage files, and organize presentations. A VA should be available around the clock and meet all of your administrative needs, despite the distance.

Factors to Consider When Outsourcing for an Ecommerce Business

While outsourcing is cost-effective and productive, you must consider the following factors before opening your business to a third party:

  • The resources and technology that are available to the third party.
  • The third-party’s rates should be within your budget to avoid spending more than you use for in-house services.
  • It’s important that you find someone fluent in your language.
  • Your contractor should be able to meet company deadlines with minimal supervision.
  • The outsourced contractor should be trustworthy and maintain good communication skills.

Benefits of Insourcing in Ecommerce

Limited Risks

Insourcing enhances your ability to safeguard company data, such as tech developments, sensitive passwords, trade secrets, and confidential documents. Employees can’t access or distribute this data to other computers when all company information is in one location.

Better Control

Insourcing makes it easier for you to manage your team in one location. For example, you can access performance, assign employees to different projects, and manage employee development. In addition, insourcing will create stronger employee relationships, leading to better teamwork and retention.

Better Communication

When all employees are in one location or linked to the same system, communication becomes easier between the management and employees. Furthermore, everyone is in the same time zone, meaning you don’t have to worry about late responses and separate meetings. You can quickly call your employee to the office in an emergency.

Quality Management

Insourcing allows you to maintain the company’s quality through direct supervision and one-on-one management. You can work with the in-house team to identify loopholes as well as correct shortcomings immediately. For example, if everyone working on a project is at the office, it’s easier to identify who dropped the ball and how to fix problems onsite.

Four Types of Work You Shouldn’t Outsource

Outsourcing is a brilliant move for your eCommerce business. Nonetheless, not every task is up for outsourcing. Below are four vital tasks that you should delegate to your in-house team.

1. Executive and Leadership Positions

You should never outsource executive roles and leadership positions that significantly impact your company’s success. The CEO and management staff should include professionals who are invested in the company and understand the vision. In addition, company leaders should have physical access to the company location and team.

2. Human Resources (HR)

Many companies work with third-party hiring companies to find competent employees. However, you should never outsource full HR responsibilities to a third-party firm. Your management team should always have the final say regarding hiring and firing your employees.

In addition, you should handle all HR responsibilities in-house, including payroll processing, disciplinary actions, benefits analysis, and employee conduct analysis. Remember, you can always invest in employee training at top management boot camps like Flatiron School, Simplilearn, and Thinkful.

3. Core Company Competencies

Your core company competencies should never be available to third-party contractors. If you value your company resources and strategies training, using a third party may not be the best fit for you. Moreover, an external contractor may provide training that doesn’t align with your vision. It will help if you use your in-house team to handle duties related to your core competencies.

4. Company Finances

You can outsource specific accounting tasks like bookkeeping, tax accounting, and financial data analytics. However, you should not give a third-party contractor access to your finances. In addition, you should only work with reputable and trustworthy external contractors when dealing with company finances.

Conclusion

Outsourcing is becoming the norm in various industries, and you can outsource various tasks to ensure company productivity. In addition, tech advancements are improving eCommerce businesses, so in turn, outsourcing opportunities are also rising. You may see this trend become more prevalent as more and more companies adopt hybrid and remote work setups.

However, you should always prioritize the company vision, whether outsourcing or using in-house staff. MyFBAPrep is ahead of the game in eCommerce outsourcing services. They offer high-quality inventory management services to ensure efficient order fulfillment.