A Definitive Guide to E-commerce Outsourcing

The e-commerce industry is thriving. Amid the pandemic, many aspiring entrepreneurs launched online businesses. Even brick-and-mortar enterprises transitioned to click-and-order stores.

But online businesses face inevitable challenges. They struggle to optimize their operations and meet growing consumer needs. That is where business process outsourcing (BPO) comes in.

With BPO, you can delegate your sales and telemarketing tasks to a specialized service provider. You can also adopt e-commerce customer service outsourcing or hire a third party to manage your back-end functions.

But what is e-commerce outsourcing? Read on to learn more about it.

What Is E-commerce Outsourcing?

E-commerce outsourcing entails hiring a third-party service provider to handle certain front-office and back-end functions of your e-commerce business. Instead of building an in-house team, you hire a BPO partner to do the job. The most commonly outsourced tasks include sales, customer support, and administrative work.

The BPO industry has long penetrated the e-commerce market. But the pandemic further accelerated its growth as more consumers relied on online businesses. Meanwhile, entrepreneurs have taken advantage of the potential benefits of BPO. 

The BPO industry gained ground by serving various industries. It is a practical solution for optimizing business operations and meeting consumer needs. The e-commerce sector is just one segment that can maximize the advantages of outsourcing.

Learn more about outsourcing your e-commerce functions in the next section.

What E-commerce Functions Can You Outsource?

You can outsource several e-commerce functions. Usually, these are back-end tasks such as data entry and order fulfillment. Outsourcing allows you to focus on your core business—selling your products and services. You can also outsource front-office functions such as sales, telemarketing, and customer support.

Now that you understand what e-commerce outsourcing is determine which business functions you must outsource. 

1. Sales and Telemarketing

Sales and telemarketing have one ultimate goal: to sell products and services. They directly affect your bottom line and are thus among the most crucial tasks in your e-commerce operation. As an online entrepreneur, you want customers to patronize your business, buy your products, and hire your services.

By outsourcing, you can have contracted telemarketers call potential customers to offer your products or services. Sales specialists perform cold email outreach to promote your business. BPO companies also have the technology to facilitate these operations. 

2. Customer Service or Support

Customer support is a critical component of your e-commerce operation. Outsourcing provides you with a team of representatives to assist your much-valued customers. They answer product inquiries, process order requests, provide updates, and even handle complaints.

Outsourcing customer support is an excellent business strategy if you have a limited workforce. BPO agents undergo stringent hiring processes and training programs. They have the product knowledge and soft skills to help your customers. Ultimately, outsourcing is a viable solution for tapping into knowledgeable and skilled professionals.

3. Data Entry

Data entry might seem an easy job; data entry specialists must simply encode information into your database for recordkeeping. But the details should be accurate, especially billing and bank information. 

In an e-commerce operation, you deal with massive amounts of customer data. Outsource data entry services if you want to ensure data accuracy and protection. BPO agents collect customer data, verify its accuracy, and store it in a secured network.

4. Order Fulfillment

Order fulfillment is integral for successful e-commerce sales. It involves receiving, processing, and delivering orders. It also entails coordinating with other departments to ensure speedy shipment to customers. 

A BPO service provider employs contact center as a service (CCaaS) platforms to enhance order fulfillment. Consider outsourcing email support, live chat, and phone service for customer orders and updates.

5. Inventory Management

You require inventory management to procure, store, produce, and sell your inventory. The process also involves managing raw materials and components needed for your online business. More importantly, it entails turning raw materials into finished products and tracking them.

Understand what e-commerce outsourcing is to guide your inventory management strategy. Inventory management outsourcing is ideal because it lets you focus more on marketing your business and selling your products.

6. Supply Chain Management

Supply chain management (SCM) is related to inventory management and order fulfillment. Inventory management involves keeping track of raw materials and finished products, while order fulfillment is more concerned with processing purchased products. SCM focuses on managing the flow of your goods, from acquisition to shipment.

Hiring a BPO service provider can optimize your SCM. It can help streamline your e-commerce operations, create quality products, and ensure fast delivery. Efficient SCM translates to high customer trust and increased sales revenue.

7. Product Returns and Customer Refunds

Product returns are inevitable in e-commerce businesses. Not all customers end up satisfied with the goods or items they purchase. They return products and often request refunds. An outsourced customer service team can handle such situations easily. 

One tip for outsourcing customer service is to focus on the workforce. Ensure your third-party service provider hires and trains the best people for your return/refund management. These agents should not only process product returns and refunds; they should also win back customer trust.

8. Digital Marketing

Sales is the most important function in e-commerce operations. But there is another vital process—marketing. Sales focus on selling your products or services; marketing promotes your brand and engages with customers. To better reach your target audience, digital marketing is the key.

But what is e-commerce outsourcing able to do for digital marketing? Outsourcing can optimize the following online marketing strategies:

• Search engine optimization (SEO)
• Pay-per-click (PPC) advertising
• Email marketing
• Content creation
• Social media management

Get the benefits of a full marketing team by hiring outsourced SEO specialists, PPC specialists, content writers, and social media managers.

9. Web Creation and Development

According to Forbes, every business should have a website, and obviously, this is essential for e-commerce stores. Having a strong online presence has a massive impact on your overall success. But what if you have no expertise in web development? 

A third-party web agency can help you create your e-commerce website and maintain it. They employ user experience (UX) and responsive web design principles. The goal is to ensure your site’s aesthetics and functionality attract and win customers.

10. Administrative Functions

Every company requires administrative departments fundamental to its operation. Even e-commerce businesses need people to perform administrative tasks. Consider outsourcing human resources (HR) for recruitment, payroll for salaries, and information technology (IT) for system management.

Entrusting administrative functions to a reliable third-party provider is ideal for online startups and small businesses. This lets them prioritize core functions such as sales and marketing and plan growth strategies for their e-commerce business. 

Why Do Online Businesses Outsource?

E-commerce businesses outsource for various reasons, from reducing operating costs to boosting sales revenue. 

Here are the main reasons businesses outsource:

• Prioritize Core Functions: E-commerce outsourcing lets you focus on growing your business. You can do this while entrusting non-core functions to a third-party service provider. Your BPO partner handles time-consuming tasks such as data entry and inventory management.

• Save on Operating Costs: Deloitte cited cost reduction as the top reason for outsourcing. Building a warehouse, hiring employees, and investing in shipping vehicles are all costly endeavors. Entrusting e-commerce functions to a third-party vendor is more practical and helps you save money.

• Ensure Business Flexibility: The e-commerce sector constantly evolves due to changes in consumer behavior and technological advancement. Your online business should be flexible to keep up with these changes. Outsourcing provides flexibility as long as you are clear on the contract terms.

• Access Human and Material Resources: What is e-commerce outsourcing? It is a business strategy that gives you access to a skilled workforce and the latest technology. Clutch reported that small businesses outsource to work with experts and leverage flexible resources. So if you want to scale your e-commerce business, start looking for a talented BPO partner.

• Increase Service Efficiency: Increased efficiency is key to a successful e-commerce business. You should process orders and deliver products to customers on time. You must also provide customer support as seamlessly as possible. A BPO partner helps you achieve these goals by providing a solid workforce and advanced technology.

• Improve Service Quality: About 90% of service teams agreed that customers today have higher expectations than ever. They are highly critical in choosing products and demand quality services. A BPO partner usually has a quality analyst (QA) team. They monitor agents and audit operations to ensure compliance and high-quality service.

• Ensure Customer Satisfaction: In e-commerce, your customers are your most important stakeholders –  your online business exists because of them. That is why you should do what it takes to meet their needs. A BPO service provider considers customer satisfaction (CSAT) its most critical metric.

• Boost Business Profits: Outsourcing is a viable solution for increasing sales revenue. But how does it help? A reliable BPO vendor improves your operations and satisfies your customers. Your agents help win and keep customers for your online business, which translates to a boost in your profits.

• Achieve Scalability and Growth: Clutch reported that 90% of small and mid-sized enterprises (SMEs) are looking to outsource this year. Among them, 19% plan to outsource to achieve business growth. A BPO service provider can help scale and grow your business.

• Attain Global Competitiveness: The world has become a global village, and the e-commerce sector has helped make this possible. Amazon caters to a worldwide market, and even it relies on outsourced services. If you want to operate globally, then employing e-commerce outsourcing gives you a competitive edge.

How Do You Get Started With E-commerce Outsourcing?

Planning your e-commerce outsourcing investment involves a lot of crucial steps. It is a journey that requires examining your current operations to optimize BPO.

But understanding e-commerce outsourcing is one thing, and getting started with it is another. To ensure you navigate your BPO strategy in the right direction, follow the steps below:

1. Examine Your Current E-commerce Operations

The initial step is to study your e-commerce operations in depth. Factor in the various aspects that make your business run smoothly, from suppliers and the workforce to technology and resources. Take note of your processes, too, from inventory management to product shipping. 

Review your business operations to see what steps you need to take to achieve your goals. If areas that need improvement to exist, consider outsourcing them.

2. Identify Specific Problems and Unmet Goals

While examining your e-commerce operations, identify the problems you currently face. Common problems include limited supplies, bulk order requests, staff shortages, and outdated technology. These result in high operating costs, poor customer engagement, and low sales revenue. 

This step helps you determine which e-commerce functions will benefit the most from outsourcing.

Note: Refer to What E-commerce Functions Can You Outsource?

3. Find and Hire the Right BPO Service Provider

After understanding what e-commerce outsourcing is, it is time to look for a BPO partner. Consider the following factors:

• Experience and Expertise: Hire a BPO partner catering to the e-commerce sector. Ensure it has the industry experience and a proven track record for handling online businesses.

• Workforce and Technology: Work with a BPO vendor with a trained and skilled workforce. Ensure it employs the latest technology, such as automation, artificial intelligence, and cloud computing.

• Facility and Resources: Tap into a BPO vendor with world-class facilities and resources. Those two factors will help optimize your e-commerce operations.

• Outsourcing Cost and Pricing Structure: Start by researching the average cost of outsourcing. Then, check your prospects’ pricing structure and confirm whether they use a fixed price (FP), staffing, or time and materials (T&M) model. Remember to strike a balance between affordability and quality service.

• BPO Credentials and Reputation: Do not forget to check your prospects’ credentials. Choose a BPO partner with standard certifications and licenses to operate. You can also opt for one with relevant awards and recognitions. Your hired vendor must have a good business reputation.

4. Create a Service-level Agreement (SLA)

An SLA is a contract between you and your hired BPO service provider. Generally, it defines the relationship between the two parties. It details your obligations as a client and your partner’s responsibilities. Furthermore, it includes the following:

• Business Goals: Specify what objectives you hope to achieve for your e-commerce business. You might want to boost customer engagement, increase lead generation, or augment sales conversion.

• Key Performance Indicators (KPIs): Set key metrics your hired BPO partner must meet. These include service efficiency, quality control, and CSAT.

• Clear BPO Instructions: Provide your contracted BPO vendor with clear instructions. They serve as a guide to how they should perform your outsourced e-commerce tasks.

5. Kick-off Your BPO Operation

Start your BPO operation after understanding what e-commerce outsourcing is. Take note of the crucial steps above to get off on the right foot. But to optimize your e-commerce outsourcing, consider the following:

• Provide thorough and strong support at the onset.
• Give your BPO service provider the liberty to operate.
• Ensure constant communication and collaboration.
• Be open to language barriers and cultural differences.
• Set security measures and data privacy policies in place.
• Incorporate digital tools and technologies.
• Track BPO performance.
• Have regular business reporting.
• Audit your BPO operation regularly.

The Bottom Line

Online businesses should harness the power of BPO. They should learn more about what e-commerce outsourcing is. They should leverage the business strategy to optimize their operations and meet consumer needs.

Remember to do your due diligence before you sign a contract with a BPO provider. Follow our practical steps for outsourcing your e-commerce operations to reap all the benefits mentioned above.

The right BPO partner will satisfy your customers and boost your profits. It will also help scale and grow your e-commerce business.