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Efficient and accurate order processing is the secret to keeping customers happy and loyal. However, its complex procedures and routine nature make it a daunting task for online businesses of all sizes.
Thus, many entrepreneurs partner with an outsourcing provider or call center for e-commerce.
Keep reading to learn more about e-commerce order processing and how outsourcing supercharges this process. This article explores the practice’s different aspects, including its advantages, misconceptions, best practices, and future trends.
Enhancing E-commerce Order Processing via Outsourcing
Business process outsourcing (BPO) for order processing is the practice of offloading customer order management tasks to an external provider. It provides access to the expertise and efficiency of a specialized team, allowing internal staff to focus on other functions of your online shop.
Outsourcing providers typically cover the following order processing tasks:
- Receiving orders from various channels, such as online platforms, phone calls, email, etc.
- Verifying and processing order details, inventory availability, payments, and potential errors
- Packing and shipping orders according to customer specifications, inventory level management, and shipping partner coordination
Third-party vendors can also provide inbound call centers for e-commerce shops, as order processing plays a vital role in customer service.
If you are wondering what e-commerce customer service entails, it is the support your online business provides customers throughout their journey. BPO teams address order-related inquiries, resolve issues, and ensure a positive customer experience.
How Outsourcing Order Processing Tasks Benefits E-commerce Shops
E-commerce order processing via outsourcing can help enhance efficiency, increase profitability, and improve customer satisfaction while reducing costs. Third-party vendors provide access to specialized expertise and sophisticated technology, allowing you to focus on core activities and grow.
BPO’s many features and benefits make it a widespread practice. According to Deloitte’s 2023 survey, 60% of organizations increased their outsourcing scope from 2020 to 2023. Grand View Research predicts that the global BPO market will grow by 9.4% by 2030.
So, how exactly can your business benefit from outsourcing? Let us discuss each of its advantages in detail.
1. Boosted Efficiency Through Specialized Expertise
Outsourcing allows you access to a global talent pool of e-commerce order processing experts.
They are trained to receive orders from various channels, such as websites, online markets, mobile applications, and social media.
Affordable call center services provide customer service agents skilled in order processing and other tasks, such as:
- Monitoring stock levels
- Coordinating with suppliers
- Preventing overselling
- Securely handling payments
- Ensuring fraud prevention
- Coordinating with shipping partners
- Processing returns
- Issuing refunds
- Managing exchanges
Third-party order processing teams also learn the unique challenges of your niche. They are well-versed in the laws regulating online businesses, including data privacy, consumer protection, product safety, and financial acts.
With specialists on the job, you can ensure that your e-commerce order processing operations run smoothly. Additionally, outsourcing professionals enable your internal staff to accommodate other business matters, improving overall efficiency.
2. Reduced Errors Through Sophisticated Technology
E-commerce BPO providers carry the latest industry- and task-specific tools and software. Leveraging cutting-edge technologies helps your online shop streamline order processing tasks without compromising quality and accuracy.
Here are a few examples of tools outsourcing providers leverage that are directly involved in order processing:
- Order management systems (OMS) to track orders, automate workflows, and provide real-time inventory and order status visibility
- Warehouse management systems (WMS) for automating tasks, including barcode scanning, route optimization, and stock level management
- Inventory management software to monitor inventory levels across multiple locations, forecast demands, and prevent stockouts
- Transportation management systems for courier rate comparisons and shipment tracking
- Customer relationship management (CRM) systems to provide support related to orders, returns, and inquiries
They also use other technologies that support order processing operations, including data analytics and business intelligence. However, the most prominent tools used by outsourcing providers are artificial intelligence (AI) and cloud computing.
A study submitted to the National Bureau of Economic Research shows that AI helped increase customer service productivity by 14%. Meanwhile, Deloitte reports that cloud computing has enabled organizations to grow 26% faster.
3. Enhanced Scalability Through Added Resources
Depending on your e-commerce order processing needs, outsourcing teams can often be hired as needed. Thus, you no longer have to worry about recruiting or laying off full-time employees to meet fluctuating demands.
At the same time, the technologies you leverage through outsourcing let you accommodate sudden surges. You can scale operations up during peak seasons or product launches and down during quieter periods without incurring fixed costs.
These readily available resources empower you to operate around the clock, reducing downtime and disruptions. They also free up your internal team to focus on other aspects of your business, such as:
- Product development
- Product selection and differentiation
- Market research
- Market expansion
- Logistics partnerships
- Brand building
- Online marketing strategies
- Customer service
- User experience (UX) improvements
With streamlined workflows and optimized processes, you can enjoy faster turnaround times and time to market. BPO firms operating in different regions can also provide global market insight, allowing you to capitalize on trends and seasonal demands.
4. Improved Customer Service Through Refined Performance
Consumer satisfaction and experience are the backbones of any successful e-commerce shop. They help give your business the traction and profit it needs to gain a competitive advantage.
Order processing is key to achieving these factors because it sets the tone for the entire experience. It also impacts vital customer touchpoints, fostering trust, confidence, and loyalty.
Your e-commerce shop can excel in customer service through order processing outsourcing. The benefits of the practice help you provide:
- Reduced wait times
- Faster resolution
- 24/7 availability
- Improved accuracy
- Better order fulfillment
Additionally, outsourcing to countries that speak two or more tongues lets you tap into a multilingual team. This access ensures effective customer interactions, regardless of location or language. It reduces the risk of miscommunications and misunderstandings, which could lead to negative reviews, frustrations, and customer churn.
5. Increased Profitability Through Cost Reductions
Outsourcing helps your online business generate more revenue with faster operations, better customer service, and higher-quality outputs. The practice is also less expensive than operating in-house, allowing you to increase profitability.
Here are a few ways outsourcing helps you reduce costs:
- Lower labor rates. One of the most known benefits of outsourcing is lower labor costs. This is most prominent when outsourcing to countries with lower living expenses and compensation rates. For example, businesses that outsource to the Philippines cut labor costs by 70%–90%.
- Reduced hiring expenses. Outsourcing eliminates the need to hire, train, and manage in-house staff. Most BPO providers shoulder the costs of recruitment processes, from creating job postings to onboarding. They are also responsible for conducting interviews and assessments.
- Minimized overhead costs. Working with e-commerce BPO teams often involves remote professionals, especially for back-office tasks such as order processing. Thus, outsourcing can help you reduce office rent, equipment, technology, and utility expenses.
With more money coming into your shop than out, your online business can position itself for long-term financial sustainability and success.
What Are the Common Misconceptions About Outsourcing?
Many businesses still have reservations and doubts about outsourcing despite its many benefits. Some perceptions surrounding the practice include loss of control, communication challenges, security concerns, and hidden costs.
However, these are merely misconceptions and can easily be avoided through adequate preparation. Let us debunk common myths about order processing outsourcing below.
1. Loss of Operational and Quality Control
Offloading order processing tasks means you relinquish some control over your operations to your outsourcing provider. This can be a point of contention and cause doubt for many e-commerce businesses.
However, delegating control does not necessarily mean losing it. You can maintain authority over your outsourced processes. Partnering with a reliable provider, creating well-defined service agreements, and appointing account managers help prevent this issue.
2. Communication and Collaboration Challenges
Your e-commerce shop must effectively communicate its order processing needs to the outsourcing team to ensure smooth operations. However, effective communication becomes challenging due to time zone differences and potential language barriers. These factors could add complexity to communication strategies.
Fortunately, BPO providers offer multilingual support and can communicate through various channels, including:
- Phone
- Online platforms
- Messaging applications
- Video-conferencing applications
- Project management platforms
You and your provider can easily manage by setting schedules and having dedicated points of contact.
3. Security and Data Privacy Concerns
Order processing involves sensitive customer data, such as names, birthdays, credit card numbers, and social security numbers. It may be daunting to relinquish such information and business data to a third-party company.
However, outsourcing providers often have a shared responsibility regarding such matters, with proper contract agreements in place. They employ robust data security measures such as encryption, access controls, and regular audits.
4. Presence of Hidden Costs
Some businesses believe that the lower costs of outsourcing are too good to be true. They are wary of the possible extra fees that come after the contract is signed or during the partnership. The presence of hidden costs in outsourcing is not a foregone conclusion.
Nevertheless, it is a risk that you can mitigate with careful planning, due diligence, and ongoing communication. By cautiously approaching e-commerce order processing, you can actively manage finance-related outsourcing risks. Thus, you can unlock its potential for cost efficiency and business growth.
5. Outsourcing Integration Challenges
The complexities of order processing operations can make outsourcing integration challenging. Combining your systems and processes with those of your BPO provider can require technical expertise.
However, focusing solely on difficulties can paint an inaccurate picture of outsourcing as inherently challenging. When done right, integration can be a smooth process. Issues can be minimized through the following:
- Careful planning
- Effective communication
- Thorough research
- Clear contracts
- Dedicated project teams
- Established integration tools
How Can You Ensure a Successful Outsourcing Initiative?
An effective partnership is key to the success of your outsourcing endeavor. To maximize the benefits of outsourcing and mitigate risks, businesses must define their order processing goals, research providers, choose a suitable model, create a contract, and track performance.
Below is a quick rundown of these steps.
1. Define Your Order Processing Goals and Requirements
Before signing with an outsourcing firm, you must identify what you want to achieve through this partnership. Some common objectives include:
- Reduced costs
- Increased efficiency
- Improved accuracy and quality
- Improved scalability to handle task volumes
- Enhanced customer satisfaction
- Better focus on core business activities
You must analyze your e-commerce shop’s current order processing operations and decide which tasks to outsource. Identify critical steps, bottlenecks, pain points, and areas for improvement to enjoy maximum cost efficiency when delegating tasks.
2. Choose the Right Order Processing Outsourcing Model
Another essential step to ensuring a successful BPO partnership is implementing the right outsourcing model based on your needs. The most common arrangements include the following:
- Onshore outsourcing involves working with a BPO team within your country.
- Nearshore outsourcing involves partnering with a provider in a nearby country with similar time zones and cultures.
- Offshore outsourcing involves employing an outsourcing team from a distant country.
How you choose a model will depend on your goals and needs. Additionally, e-commerce order processing outsourcing has many types, such as microtasking, human-in-the-loop, etc. We will dive deeper into this subject in the next section.
3. Compare Potential BPO Providers
Partnering with the first outsourcing provider you see is not ideal. Short-term and unsuccessful partnerships are expensive. Research, list, and compare prospects to find the best call center for your e-commerce shop based on your goals and needs.
Here are the criteria you can use when searching for outsourcing firms:
- Industry experience and track record
- Portfolios and case studies
- Specializations and expertise
- Service inclusions and rates
- Client reviews and testimonials
You can also ask for a trial period or project proposal to better understand what it’s like to work with them. When conducting these initial trials, specify the service scope, deadline, and potential issues. Note down their proposed solutions, strategies, and rates.
4. Create a Clear Service-level Agreement (SLA)
Once you have decided on a BPO provider, you can write a contract to protect the needs and interests of your online shop. Learning how to write an SLA is crucial to ensuring an effective partnership. Here are a few factors to consider when drafting one:
- Service scope
- Order processing time
- Error rate
- Delivery time
- Customer satisfaction level
- Inventory accuracy
- Other key performance indicators (KPIs)
Remember to include communication, security, and compliance protocols to avoid potential issues. Include periodic reviews and termination clauses, such as specific circumstances that are grounds for ending the contract.
5. Regularly Track Outsourced Processes
Regular monitoring and reporting are vital to fully solidifying your outsourcing initiative’s success. This final step helps you proactively identify any deviation from contracts, determine areas for improvement, and optimize processes.
Regular monitoring is essential for data-driven insights that can help you make more informed decisions about your partnership. It will also help you renegotiate contracts, foster transparency and trust, and align goals and priorities.
What Are the Different Types of Order Processing Outsourcing?
E-commerce order processing outsourcing offers several service types for various business goals and needs, each with strengths and weaknesses. These include back-office support, microtasking platforms, human-in-the-loop, core services, content control and verification, AI operations, and hybrid.
Let us discuss each in detail.
1. Back-Office Support
This is the most general type of order processing outsourcing, encompassing many administrative processes related to the task, such as:
- Data entry
- Order verification
- Payment processing
- Customer service interactions
- Inventory management
- Shipping coordination
The back-office support model best suits online businesses with high order volumes and repetitive tasks.
2. Microtasking Platform
As the name suggests, this type of outsourcing breaks down order processing tasks into smaller, more manageable units. This model covers product data entry, image tagging, order validation, and other jobs that can be completed autonomously.
Providers who use this model distribute tasks to a large pool of online workers through a digital platform. The microtasking platform model is best for high-volume, repetitive tasks that require keen attention to detail.
3. Core Services
Has your e-commerce shop decided to prioritize the order processing tasks it wants to outsource? If so, the core services model is a practical choice for your needs. Some of the standard functions it covers include:
- Order intake
- Order fulfillment
- Customer service
Through this model, the BPO provider manages the entire process from start to finish, providing a streamlined solution. It is best for shops seeking a comprehensive approach without managing individual tasks.
4. Human-in-the-Loop
Maximizing human expertise and the flexibility of automation speeds up processes without compromising quality. Human-in-the-loop perfectly demonstrates this ability. Implementing this order processing outsourcing model allows you to combine and enjoy the benefits of both resources.
For example, you can use AI to automate the sorting of customer inquiries and still have human agents for more complex issues. This human oversight is best for tasks involving judgment, decision-making, and sensitive information.
5. Content Control and Verification
High accuracy and quality of product information, pricing, and other order-related data are best achieved through this model. Outsourcing with a focus on content control and verification helps you provide a seamless customer experience and reduce process errors.
It covers various aspects of order processing, including:
- Product descriptions
- Pricing information
- Inventory levels
- Product images and videos
- Customer reviews and ratings
- Marketing materials
If your e-commerce shop has complex product catalogs, niche offerings, or a need for data accuracy checks, you can benefit from this model.
6. AI Operations
E-commerce shops can leverage AI for order processing through outsourcing. Unlike the human-in-the-loop model, this type of outsourcing uses only AI.
It is best used to automate and streamline tasks, such as data extraction, order routing, fraud detection, and inventory management. It can significantly improve efficiency and accuracy, especially for high-volume businesses.
7. Hybrid Models
You can also combine different outsourcing approaches to create a customized solution that meets your specific business needs. For example, you could offload front-office order processing tasks while operating administrative functions in-house.
This hybrid model offers flexibility and allows you to leverage the strengths of different outsourcing models. It can be the most practical approach, depending on your existing resources and service scope.
How To Choose the Right Model for Your E-commerce Shop
Carefully considering your options and selecting the right outsourcing type is critical for optimal cost efficiency. Here are some considerations to help you make more informed decisions about how you want to outsource:
- Which order processing function do you want to offload?
- What is your budget?
- How sensitive is the information you will be sharing with BPO teams?
- Are there any specific regulations you need to comply with?
- What type of experience and expertise do you require from a provider?
By answering these questions, you can maximize the benefits of outsourcing and avoid risks that cause financial and reputational damage.
What Are the Future Trends in Order Processing Outsourcing?
The e-commerce industry is constantly evolving, including order processing. Technological advancements and changing customer expectations bring new outsourcing trends. These include automation, omnichannel integration, sustainability, and blockchain technology.
Let us do a deep dive into these upcoming trends:
- Increased automation and AI adoption. One of the leading BPO trends and predictions is digital transformation. Robotic process automation (RPA), machine learning (ML), and AI will continue to be used for routine tasks. These tools will improve predictive analytics to better anticipate customer demand and optimize inventory levels.
- Hyperpersonalization and predictive analysis. BPO providers will leverage data-driven insights to personalize order processing based on consumer preference. Advanced analytics will forecast demand, predict potential issues, and suggest proactive solutions to optimize efficiency and customer satisfaction.
- Omnichannel integration and multilingual support. Outsourcing firms will expand their capabilities to handle orders in multiple languages across different countries. They will continue to develop and improve omnichannel support for order processing, helping online shops achieve a seamless and consistent customer experience.
- Ethical outsourcing and emphasis on sustainability. The growing demand for sustainable practices will push BPO providers to adopt green logistics solutions and eco-friendly materials. Fair labor conditions and ethical sourcing practices will impact them, resulting in better management.
- Emerging blockchain technology and focus on transparency. With data breaches constantly threatening e-commerce shops, order processing outsourcing teams will implement blockchain technology. This tool will enhance transparency and security, specifically for cross-border transactions and supply chain management.
The Bottom Line
Outsourcing order processing is a cost-efficient strategy to streamline workflows, generate revenue, and improve customer service.
Unfortunately, some businesses miss out on its many benefits due to the misconceptions that plague the practice. Nevertheless, risks can be avoided through adequate goal-setting, research, contract agreements, and monitoring.
Choosing the suitable type of order processing outsourcing is the key to maximizing its features and ensuring long-term partnerships. Successful initiatives also allow online retailers to gain early experience with outsourcing trends.
Let’s connect if you want to learn more about e-commerce order processing. Unity Communications is an award-winning outsourcing provider equipped to handle your inquiries!
