Why Outsourcing Non-Core Activities Is a Smart Move for E-commerce Businesses in Phoenix

Business process outsourcing (BPO) is a viable solution in today’s fast-changing e-commerce environment. This approach involves assigning an area of business operations to a third-party specialist.

Focusing on income-generating activities and outsourcing the rest is a smart move, especially for online retail stores that lack expertise in specific business areas. They can partner with a BPO company in Phoenix to handle auxiliary functions.

This article discusses the advantages of outsourcing non-core processes to an external service provider. Keep reading to learn valuable insights for your Phoenix e-commerce business.

Reasons Why Outsourcing Non-core Processes Is Beneficial

Some e-commerce companies make the mistake of only outsourcing when they have exhausted their maximum capacity. They treat outsourcing as a Plan B to handle work overflow.

Others even delay outsourcing non-core processes, thinking that an external team cannot do the job the way they do. However, the benefit of outsourcing extends beyond just having an extra pair of helping hands.

Outsourcing e-commerce services means partnering with data entry, order processing, and fulfillment experts. BPO companies only recruit skilled individuals to replicate or exceed your operations.

Here are a few reasons why outsourcing non-core processes is a wise decision for your e-commerce business in Phoenix:

Focus on Core Competencies

Leaders often allocate most of their workday managing and coaching team members assigned to back-office tasks. This takes away time from accomplishing tasks crucial to the company’s long-term success.

By outsourcing non-core e-commerce processes, you free up their resources and eliminate distractions related to back-end activities. You can enable your leaders to concentrate on higher-level work, such as developing the core team, finding new technology to invest in, building a positive environment, and developing new products.

You can also use the extra time to perform business audits, spot operational bottlenecks, and design improvement plans. These activities let you establish strong and unified leadership, facilitate innovation, and set your e-commerce business up for long-term success.

Minimize Costs

Outsourcing non-core processes enables company leaders to optimize financial resources and save on expenses like employee benefits, software licensing fees, office supplies, and business trips.

The strategy also reduces recruitment costs by forgoing employee onboarding, training, and retention initiatives. Lastly, it enables e-commerce businesses to save on procuring equipment and renting the workspace needed to handle non-core functions.

Reports show that outsourcing helps achieve labor cost savings of up to 70%. This figure is possible by outsourcing work to countries with cheaper living costs and, consequently, more affordable labor wages.

All these factors considered, online retailers can concentrate on their primary business, allocate resources to more critical areas, generate higher revenue, and drive growth.

Earn More Revenue

Remember that, in business, you need to spend before you earn. Suppose you run a dropshipping company. Even if you do not need to stock and ship your inventory, you still need to purchase a domain, pay for the website and hosting, and shoulder other start-up costs when launching the brand.

This business aspect is a given, regardless of the success of your e-commerce company. You must spend money on employees, hosting, and products to keep your company operational. Moreover, increasing your sales requires you to release new marketing campaigns, produce more products, and expand your item selection, all of which cost more money.

E-commerce outsourcing helps you handle more projects and grow your business without hiring more employees. It lets you generate higher revenue and realize higher returns on investment (ROIs).

Enhance Operational Capacity Without Overhead Expenses

As the workload increases, so do overhead costs, such as rent, utilities, and infrastructure. Business operations become even more expensive when considering onboarding, training, and human resource (HR) management. An offshoring provider in the Philippines handles these activities for a fraction of the cost of doing them in-house, so you can focus on selling while saving money.

Outsourcing non-core processes minimizes labor costs and cuts down on other expenses, such as shipping costs and taxes.

When you delegate tasks to an overseas partner, you can save more on materials if the BPO firm can procure the needed equipment at a lower price. Furthermore, cutting back on shipment costs is viable if the tools you need for the job are already available in the BPO provider’s office.  

Minimize Risks When Scaling Up

Expanding your company has inevitable risks; outsourcing can help you minimize them. Consider the local government regulations you must comply with or the administrative tasks you must handle when entering a new target region. Outsourcing is a practical approach to lowering legal, financial, and reputational risks.

When outsourcing non-core processes, you share some risks with the BPO company. It must deliver the outsourced work and fulfill the key performance indicators (KPIs) in the agreement you both agreed on.

Suppose the BPO provider fails to deliver the solution to the agreed-upon standard or within the stipulated time, and it causes financial damage to your e-commerce company. It is legally obligated to fix the problem as per the agreed terms. Contract breach terms often involve giving you monetary compensation.

Become More Equipped to Compete

The e-commerce business landscape is more interconnected than ever. The worldwide e-commerce market reached $16.6 trillion in 2022 and will continue to grow. Brands compete globally, where the main differentiator is meeting the ever-changing demand for excellent customer service. Failure to innovate means falling behind.

Outsourcing non-core processes gives you the resources to help your company grow without spending your hard-earned money on real estate, the newest infrastructure, or world-class technology. The BPO company owns the tools and provides access, helping you deliver effective customer service with 24/7 support and flexible work schedules.

Assigning certain functions to a third party means you can leverage a pool of qualified and skilled professionals with knowledge and experience that you may not have access to internally. Since wages are cheaper in offshore countries, they are the typical destination for outsourcing, giving you significant cost savings.

Use the Time Zone Difference to Your Advantage

Outsourcing to destinations with different time zones is initially considered a disadvantage because it can cause operational problems for the client company. However, leveraging time zone differences can prove beneficial. Here are some of its benefits:

• Round-the-clock support. Today’s global marketplace requires e-commerce shops to be available for support anytime. Businesses can achieve this by handling tickets internally during office hours and having remote agents operate at night. Agents cover phone calls, emails, and live chat so customers receive timely support.
• Shorter project timeline. Using the follow-the-sun (FTS) workflow allows online shops to minimize time to market. This approach lets knowledge production be handed off at the end of the workday, allowing the third-party team to resume the task during their work shift. This approach only works with regular team meetings and progress updates.
• Flexible staff availability. E-commerce customer service outsourcing allows companies to set up agents flexibly. BPO companies have established structures where agents may work day or night shifts to accommodate their clients. Despite the higher pay differential for night shifts, outsourcing still offers significant cost reductions compared to working in-house.

Choose From a Bigger Candidate Pool

When you hire internally, you have a limited pool of candidates. Hiring becomes more challenging when you need a specific skill or credential unavailable locally.

Outsourcing lets you choose from a more comprehensive selection of talent from all around the globe. You can increase your e-commerce sales and marketing potential with a global staff seasoned in blogging, search engine optimization (SEO), advertising, and technical development.

You may also use remote outsourcing to pre-vet talent willing to migrate and become internal team members in your home office. Outsourcing helps you find more candidates in a larger labor market without committing full-time.

Leverage a Flexible Hiring Process

E-commerce shops often find themselves outsourcing functions they need to handle year-round but cannot justify hiring full-time staff. Conversely, they may need help with short-term projects or seasonal work. As a result, these types of outsourced work have expiration dates.

For instance, you must hire someone to write product descriptions to add new products to your online shop. If you rarely add new products, you can ask internal team members to take on the role in addition to their current work. However, outsourcing allows you to offload the job as a one-off project.

Regarding seasonal work, holidays such as Black Friday, Cyber Monday, and Christmas are always busy for e-commerce brands. You will likely get more sales than normal, but this comes with more orders to pack and ship and more tickets to handle. The customer-centric outsourcing approach lets you hire short-term staff to cover the holiday rush.

Start Projects Quicker

Hiring and training new team members can be long and tedious. You must write job descriptions, post them on job listing websites, interview candidates, identify the most suitable ones, and train them. This whole process can be painful if you only need someone to help you set up your new marketing strategy or optimize product descriptions on the website.

Outsourcing non-core processes cuts through this tedious process and offers you access to skilled talent and BPO firms from around the globe. You can start working on the project more efficiently and maximize savings.

Moreover, you may outsource back-end tasks perpetually without turning contract workers into full-time employees or outsourcing indefinitely. The employees of your chosen BPO partner undergo training to develop the commonly outsourced skills.

Examples of Non-core Processes in E-commerce

An online store manages functions that range from supply chain, inventory, shipping, and returns to marketing and customer service, and all of them are important to the operation. Your business can accomplish these tasks by outsourcing non-core processes.

Here are the different activities that you can assign to a third-party vendor:

• Web development, design, and maintenance. Unless you are an expert in web development, this task is better left to professionals.
• Bulk product data entry. Outsourcing makes it easier to add new products, tag out-of-stock items, upload photos, and move your online store to another platform.
• Product description creation. As your inventory expands, writing product descriptions and titles becomes more time-consuming. You can outsource this seasonal work to a contractual worker instead.
• Administrative roles. Menial, recurring, everyday tasks are necessary but take time to complete. Outsource these tasks to a BPO company or a virtual assistant agency.
• Customer support. Failing to provide solid customer service can hinder your growth. One outsourced customer service tip is to hire a BPO company specializing in e-commerce support.

The Bottom Line

E-commerce outsourcing is a popular strategy for business owners wanting to concentrate on their core competencies, reallocate resources, and save time and money. It also allows online stores to access industry experts and expedite time to market.

The advantages of e-commerce outsourcing outweigh the risks, but you must still examine potential providers to maximize the benefits. You can save yourself some headaches by partnering with Unity Communications.

We are a trusted BPO partner for many e-commerce stores around the world. Let’s connect to discuss a solution.