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Should E-commerce site management be outsourced? Advantages and disadvantages of outsourcing

Date : 05/29/2020 12:39 (JST) Category : Blog

Aren’t there many people who have concerns such as, “I want to start E-commerce site management, but I don’t know what to start with.” or “What should E-commerce site management do?”

This article will teach you the basics of E-commerce site management, as well as the pros and cons of whether to run the operation in-house or outsourced.

What is E-commerce site management outsourcing?

Outsourcing of E-commerce site management is to outsource part or all of the operation of E-commerce site management to sell products.

It depends on the E-commerce operation agency, but the support covers some or all of the following operations.

Depending on the operating budget, it is necessary to carefully consider whether to outsource all or part of the operation.

If only part of the operation is to be outsourced, it is needed to be select which part to be outsourced.

Let’s have a look at what kind of E-commerce site management work there is.

Product planning

Product planning is to plan and study of products that can be purchased by users while trends and seasons are into consideration in order to increase profits on E-commerce sites.

In addition, it is required to make specific sales plans, such as which products will be sold and the period of sale.

E-commerce site production and operation

E-commerce site development is to build and design of an E-commerce site system.

It is important to create an easy-to-use and easy-to maintain website, and to design an E-commerce site that demonstrates the attractiveness of the products, which increase the customer’s desire to purchase.

Site management involves taking photos of products to be on the site, and registering photos and product information.

The quality of photos and reliable product information are crucial part because these affect product sales for the E-commerce site.

Promotion

Promotions are advertising activities for products that on the E-commerce site.

There are other methods, such as TV commercials, newspapers, and magazines, but the primary advertising method is web marketing for E-commerce sites.

Order

The order takes place where an order received from users, order confirmation emails, shipping instructions, etc.

The task is not complicated, but even tiny mistakes can cause complaints. Thus, it requires great attention to detail.

Inventory management

Inventory management is the management of products to make sure there is no shortage or excess of inventory.

Excess inventory costs money, but paying too much attention to overstock can lead to shortages. Accurate sales forecasts are required to prevent overs and shorts.

Dispatch / Packing / Shipping

This is the task to dispatch and pack the product following the shipping instruction, and deliver it to the user.

The key to winning the trust from users, who could lead the next purchase, is to maintain shipping tasks have done smoothly.

Aftercare service

The after-care service involves sending e-mails to customers who have purchased the product to show gratitude and ask their feedback, as well as responding to inquiries and complaints from users.

It is required prompt and polite response since the way to address complaints can affect sales in the future.

Because the after-care service interacts with the user directly, it plays a crucial part.

The difference between running an E-commerce site in-house and outsourcing

Let’s take a closer look at the differences between running an E-commerce site in-house and outsourcing to a web development company.

E-commerce site quality

In many website development companies, there are professionals such as web directors, web designers, and programmers who can take care of E-commerce site creation with the high level of expertise.

However, when creating an E-commerce site in-house, there is likely to be a lack of specialized knowledge and resources, so it is challenging to create as sophisticated E-commerce sites as the one created by outsourcing.

Trend sensitivity

Web development companies create websites in a variety of fields and accumulate information that is difficult to obtain from a single field including the latest trends in the industry.

Therefore, the website can always be updated with the latest design.

On the other hand, if creating a website in-house, it might not easy to get the latest trend information in other fields, so the trend cannot be reflected on the site, and it is likely to become mediocre site.

The advantage of outsourcing

Let’s take a closer look at the benefits of outsourcing E-commerce site operations.

Work efficiency

By outsourcing the practical operation of the E-commerce site, the enormous burden of E-commerce site management could be reduced.

In addition, by reducing the burden, the tasks required for company operations, such as marketing and product development, can be paid more attention.

Reducing operation cost

It is required for specialists who have decent knowledge and skills to operate an E-commerce site. However, the labor cost of specialists tends to be higher than the general labor cost.

By outsourcing the operation, labor costs can be reduced and overall E-commerce site operation costs can be reduced as well.

A sophisticated E-commerce site can be created by outsourcing

In the web development company, the professionals such as web directors and web designers with specialized skills are responsible for creating E-commerce sites.

Therefore, a high-quality web page with sophisticated design will be developed.

The disadvantage of outsourcing

Let’s take a closer look at the downside of outsourcing E-commerce site operations as well.

Operation progress is not 100 percent transparent

Because the operation supposed to be handled in-house will be outsourced, it will be impossible to grasp the detailed progress of all the work content, and it becomes hard to control the operation.

Practical knowledge of E-commerce site management cannot be accumulated

By outsourcing E-commerce site operations, it is not able to accumulate knowledge and experiences on E-commerce site management expertise in-house.

Should not expect prompt response to instruction

There might be multiple projects that are underway in a web development company, and it may be impossible for them to respond immediately to trivial requests such as “I want to modify it a little” or “I want to change the design a bit.”

Cost type

Let’s have a look at how much it actually costs to develop an E-commerce site by outsourcing.

The pricing plans differ from each web production company and the content of the work to be outsourced.

It is important to consider which part to be outsourced according to your budget.

Fixed cost type

The fixed cost type is a cost system that pays a fixed amount according to the period of work regardless of sales or outcomes. The advantage is that the budget is easier to set because the cost is fixed. The disadvantage is that you have to pay a fixed amount as a reward even if the sales do not increase.

Performance reward type

Performance reward type is a variable cost system that pays a percentage of sales as compensation. The benefit is that you don’t have to pay if you don’t make a sale, so you have less risk in case of failure.

The disadvantage is that the reward rate may be higher and higher than the fixed cost type in some cases.

Composite type

It is a cost system that pays fixed amount in addition to performance rewards. The advantage is that the reward rate and fixed cost amount are often set low. The disadvantage is that you also need to pay for sales reward as compensation in addition to the fixed amount.

Summary

When the size of an E-commerce site and the number of products are more extensive, the amount of work to be addressed for E-commerce site operations will be enormous. We believe that it is more beneficial to have an E-commerce site operation outsourced with specialists in order to run the E-commerce site efficiently and smoothly, rather than having a heavy burden on your own company.

By all means, we hope you will find an excellent web development company that fulfills your requirement for your E-commerce site