Written by Dion Jay Tality
As an entrepreneur, you know that capitalizing on the e-commerce market is a great way to make money. Business process outsourcing (BPO) is one way to ensure your non-core tasks run smoothly, enabling you to focus on selling products or services.
BPO companies offer a wide variety of services. Some of them handle back-end functions, while others tackle human resources (HR) and information technology (IT). Some BPO companies even specialize in e-commerce customer service outsourcing.
But how do you outsource e-commerce services without losing business control? Read on to find out.
How To Outsource While Maintaining Control Over Your E-commerce Business
First, what is business process outsourcing? BPO involves hiring a third-party service provider to handle certain business functions. You outsource front-office and back-end tasks instead of building in-house teams.
The BPO sector has penetrated various industries, including the e-commerce market. Hence, many online stores consider outsourcing e-commerce services. They tap into BPO firms for help with tedious and mundane tasks such as order fulfillment and inventory management.
Online entrepreneurs also entrust their customer service and administrative tasks to BPO vendors. That way, they can prioritize selling products and services and growing their businesses.
But one major challenge of e-commerce outsourcing is losing managerial control. Consider the following tips for maintaining control over your business.
1. Focus on Your Core Operations
E-commerce operations involve a lot of processes. There are front-office (customer-facing) and back-office (administrative) functions.
Some e-commerce functions are highly critical for your return on investment (ROI). They make up your core operations and require undivided focus and attention. You should prioritize these high-ROI tasks.
Meanwhile, some e-commerce processes are less important. They are non-core functions that are usually repetitive, tedious, and mundane. But these low-ROI tasks affect your entire e-commerce operation, so you should not neglect them, either.
The most significant benefit of outsourcing is that it lets businesses focus on their core operations. About 65% of businesses outsource non-core functions to prioritize their primary functions.
When you outsource e-commerce functions, you entrust your low-ROI tasks to a BPO partner. To have complete control of your online business, concentrate on improving the following high-ROI activities:
- Sales or telemarketing entails selling products or services. Telemarketers call potential customers, while other sales representatives perform cold email outreach. Ultimately, your e-commerce business exists to generate income. Optimize your revenue by building a skilled in-house team for sales and telemarketing.
- Digital marketing involves promoting brands and engaging with customers via digital platforms. Implement online strategies, such as search engine optimization (SEO) and pay-per-click (PPC), to get your business in front of potential customers. Add email, content, and social media marketing to your strategy to maximize your reach.
- Order fulfillment directly impacts your sales revenue. It involves processing orders, taking payments, and shipping products to customers. Pay close attention to this e-commerce function by keeping it in-house.
2. Outsource Non-core Functions
We have underscored the importance of focusing on core operations when outsourcing e-commerce services. But while you are busy with these high-ROI activities, you can entrust non-core functions to a third-party service provider. That way, you have peace of mind knowing your other less important tasks are taken care of.
So what are the non-core functions you can outsource for your e-commerce business? Here are a few examples:
- Data entry records customer information by encoding data in digital format. Data includes personal details, billing information, and bank accounts used for e-commerce transactions. Outsource data entry services to ensure data privacy and accuracy.
- Customer service assists customers with various concerns. E-commerce customer service representatives answer questions about products, process order requests, and provide status updates. Consider outsourcing this to a BPO vendor as your customer base grows and expands.
- Returns and refund management involves returning ordered products and processing customer refunds. This e-commerce function is crucial to appeasing customers and winning them back. You need a solid team with excellent soft skills to handle this task. BPO providers regularly train their contractors for such situations.
- Supply chain management focuses on the flow of your products. The supply chain team tracks your goods and oversees all processes, from material acquisition to product delivery. Hire a third-party service to handle this e-commerce function.
- Inventory management monitors your raw materials, required components, and finished products. Supply chain management focuses on processes, while inventory management prioritizes regulating your stocks. Employ inventory management outsourcing to balance cost efficiency and product quality.
- Web creation or design entails creating and designing an e-commerce website. It also involves maintaining and updating your site for the long term. If you lack web knowledge and skills, consider outsourcing this task to a web developer or web design agency.
- Administrative tasks are fundamental to business operations. These include accounting, payroll, procurement, HR, and IT support. Consider outsourcing administrative work to a third-party vendor so that you can prioritize the sale of your products and services.
3. Orient Your BPO Partner to Your Business Goals
E-commerce businesses exist to sell products and services. They seek to win new customers and gain their loyalty. The ultimate goal is to generate revenue, but you have other business objectives linked to this primary goal.
When outsourcing e-commerce services, let your BPO partner know your business goals. This allows the provider to align its operational strategies with your end goals. So despite outsourcing, you determine the flow of the engagement.
Below are common business goals in ecommerce:
- Optimize front-office functions. You aim to improve your customer-facing tasks so that your customers get full support and have the best experience.
- Streamline back-end operations. You seek to optimize your operations by scaling your technical support and administrative capabilities.
- Improve customer engagement. Outsourcing customer support allows you to boost customer engagement for enhanced customer experience.
- Increase lead generation. You want to generate more leads for your e-commerce business to increase your chances of converting them into sales.
- Boost sales conversion. You aim to have more people buy your products or hire your services.
- Ensure customer acquisition. You seek to win new customers through telemarketing and cold email outreach campaigns.
- Achieve high customer retention. Aside from acquiring new customers, you want to keep them for good. You hope to build a community of loyal supporters.
- Scale and grow your online business. As an entrepreneur, you want to scale your e-commerce business. The ultimate goal is to grow your online store over time.
4. Create a Service-level Agreement (SLA)
Outsourcing e-commerce services requires creating an SLA. This agreement gives you control over your online business while outsourcing work to a third party.
An SLA is a contract between two parties—you as the client and your hired BPO partner. It defines your relationships and sets your commitments to each other. Specifically, it details your and the BPO partner’s obligations and responsibilities.
Here are the items you should include in your SLA:
- Business objectives. Start by defining what you aim to achieve from e-commerce outsourcing.
- Key performance indicators (KPIs). Set the key metrics your BPO service provider must meet.
- Scope of service. List and define the e-commerce functions you want to outsource.
- BPO company’s responsibilities. Be highly specific with the duties of your third-party agents and management team.
- Client’s obligation. Define your responsibilities, including compensation, as determined by the agreed-upon pricing model.
- BPO policies. Outline guidelines that your BPO service provider must strictly follow.
- Outsourcing instructions. Have detailed, clear instructions to guide your hired BPO partner.
- Service exclusions. Highlight what should not be covered in e-commerce outsourcing to avoid confusion.
- Breach of contract. Include corresponding penalties, legal consequences, and contract termination for any violations.
5. Set Key Performance Indicators (KPIs)
KPIs consist of several metrics aimed at measuring performance. They assist businesses in making informed financial or operational decisions. These metrics help improve processes, leading your business to success.
Setting critical metrics for your BPO operation is imperative when outsourcing. Defining the KPIs for your contracted service provider is one way to keep a close eye on your business.
Below are the fundamental metrics for outsourcing e-commerce services:
- Service efficiency measures how efficient BPO agents are in accomplishing e-commerce tasks. The faster they work, address concerns, and resolve issues, the better.
- Quality control measures the quality of the services BPO agents provide. BPO service providers have quality analysts (QAs) to monitor agents and measure performance.
- Customer satisfaction is the most important KPI. This vital metric measures how happy customers are with the services they receive. The goal is to always achieve a 100% customer satisfaction score.
6. Balance Between Allowing Ownership and Providing Support
Outsourcing e-commerce services requires entrusting particular functions to third-party service providers. It allows your hired BPO partner to take ownership of some aspects of your e-commerce operation.
As such, outsourcing inevitably means losing some control. It is one of the potential drawbacks of BPO. Forbes even highlighted the lack of control as one of the consequences of outsourcing.
To avoid losing control of your operation, strike a balance between allowing ownership and providing support. Give your BPO partner the freedom to run and operate certain functions, but take part in the operation by offering extremely strong support.
7. Ensure Constant Communication and Collaboration
Some companies leave functions entirely to their BPO vendors. They entrust their partners with these tasks and adopt a hands-off approach during the engagement. But that is one way to lose control of your e-commerce business—a recipe for business failure!
When outsourcing e-commerce services, ensure an open line of communication with your BPO team. Interact and coordinate with them regularly. Track their progress, ask for updates, discuss reports, and offer help and support.
Outsourcing requires constant communication and collaboration. Both factors help you take control of your business. Remember: a BPO engagement is a partnership between two companies working toward common goals.
8. Monitor BPO Operations and Track Outsourcing Progress
In line with communication and collaboration, conducting a BPO operation audit is imperative. Monitor your workforce performance and track your outsourcing progress constantly. Ask for monthly business reports and discuss them with your management team.
What is your SLA in the first place? What are those KPIs for? You set them for your contracted BPO vendor to follow and meet. Therefore, you must regularly monitor their performance to ensure their alignment with your business goals. This also helps you make necessary changes to areas that need improvement.
9. Hire the Right BPO Service Provider
Successfully outsourcing e-commerce services boils down to hiring a reliable BPO service provider. To ensure you maintain business control, choose a BPO partner suited for your e-commerce operation, business size, and needs.
Opt for a service provider that is easy to deal with. Your relationship with your BPO partner should be smooth and seamless. You should both work together toward achieving common business objectives.
But what qualities should you look for in a BPO company? In the next section, you will learn about the factors to consider when hiring a BPO partner.
What To Look for in a BPO Company for Your E-commerce Business
Outsourcing e-commerce services comes with several benefits. Primarily, it frees up your time and allows you to focus on promoting your business. It also helps reduce operating costs and saves money in the long run.
Moreover, it scales your e-commerce operations and improves your business performance. E-commerce outsourcing ultimately leads to customer satisfaction and increased profits.
But hiring the right BPO service provider is key to e-commerce success. Consider our tips for outsourcing customer service, back-end functions, and administrative tasks. And when looking for a BPO service provider, factor in the following:
- Proven BPO track record. Check your prospects’ history of providing outsourcing services. The longer they have been in the BPO sector, the better. Consider not only their experience but the quality of their services. Ask for references, review case studies, and check awards and recognition.
- E-commerce experience and specialization. Hire a BPO vendor serving the e-commerce market. Narrow down your list of prospects to those specialized in the industry. They should already have experience working with online businesses and handling e-commerce tasks such as order fulfillment and data entry.
- Advanced digital tools and technologies. Digital transformation is imperative for business success. Look for BPO prospects with the latest technology, such as automation, artificial intelligence (AI), big data analytics (BDA), and cloud computing. Consider outsourcing email support, live chat, and phone service for customer support.
- Solid BPO workforce and management. Make sure to vet the people you will be working with. Get to know the customer service representatives since they will assist your customers. You should also have a competent management team; they will mediate between you and your contractors.
- Streamlined e-commerce workflow. Besides workforce and technology, factor in the e-commerce processes. Examine the workflow for such e-commerce tasks as order fulfillment and inventory management. See whether your BPO prospects provide training programs and production updates.
- Robust security and privacy policies. Sharing customer data with third-party vendors risks exposing your business to cyberattacks. Note: About 55% of companies outsource to reduce their security risks. So join the bandwagon by hiring a BPO vendor with comprehensive security and privacy policies.
- Constant monitoring and reporting. Look for a service provider serious about SLA and KPIs. Trustworthy BPO partners conduct regular performance monitoring and business reporting to help you track your outsourcing progress.
- Favorable pricing model. BPO companies usually offer pricing structures when creating contracts. These include fixed price (FP), time and materials (T&M), and consumption-based models. Hire a BPO partner with a pricing structure suited to your business. Remember: Cost reduction is the top reason for outsourcing.
- Customer-centric operation. In ecommerce, your customers are the most important stakeholders. Your online business exists to meet consumer needs and serve customers. When outsourcing e-commerce services, look for a BPO partner with a customer-focused operation. They should always make your customers their priority.
- Good business reputation. In business, reputation is everything. Make sure your prospective BPO partner has a good reputation by checking online reviews and customer feedback. This will help you decide whom to hire.
The Bottom Line
E-commerce is the present and future of business. Consumers have become comfortable doing business online because of the convenience it offers. Thus, many entrepreneurs have capitalized on the e-commerce market to generate more income.
Outsourcing e-commerce services is a viable solution for boosting your business. It allows you to entrust your non-core tasks to a third-party service provider, frees up your time, and lets you focus on your core functions. You can explore many other benefits of BPO.
When outsourcing e-commerce services, consider the practical tips recommended above so that you can outsource your non-core functions while maintaining control over your core operations.