Top 10 Reasons to Outsource E-commerce & Direct to Consumer Operations to an E-Commerce-as-a-Service Company

By:

Mike Fiebach

October 19, 2022

What is an e-commerce enabler or e-commerce-as-a-service company? It is a company that provides end-to-end e-commerce and merchandising services for online businesses; everything from web store design and development, to product development, supply chain, warehousing, fulfillment, customer service, and marketing services. Here are the top ten reasons we think it is smart for brands, artists, and creators to work with an e-commerce-as-a-service company:

  1. It is a ton of work to operate an e-commerce company, and your time is probably better spent elsewhere. Whether you are an artist, creator, or brand, if your core expertise is not e-commerce operations and marketing, it probably makes sense to outsource. There are only so many hours in a day, and e-commerce management is a complex, always evolving field. With new applications, software changes, and supply chains shifting endlessly, it is important that you have a team of experts that you can rely on.
  2. E-commerce fulfillment is much more expensive to do for a single brand, or small group of brands, versus going through a company that has great pricing through scale. From warehousing and storage costs, to carrier fees from UPS, Fed-Ex, and USPS, warehousing and fulfillment for D2C is a rapidly changing business, and is increasingly more expensive due to rising fuel costs and general supply chain disruptions worldwide. For any brand attempting to do this portion of e-commerce operations on their own, they will need to consider warehouse space, employee costs, shipping costs, and packaging. The reality is, warehousing in this day and age takes specific expertise, and bringing scale to relationships with entities like USPS, UPS, and packaging companies drives down costs that can be passed on to brands and clients working with e-commerce services companies.
  3. DTC Paid Marketing is Becoming Increasingly More Expensive and Complex. From the IOS 14 updates, to the never-ending changes to the back-end of ads dashboards like Facebook Ads/ Facebook Business Manager, specific expertise in ads strategy and management is more important than ever for an online brand. Most brands saw their customer acquisition costs (CAC) go through the roof when the IOS changes occurred in 2021, making ads specialists more important than ever before.
  4. Site Up-keep is Complicated and Time Consuming. With ever-changing themes, templates and apps available from Shopify, it is important to stay up to date on the latest design trends, and functionalities that will increase site retention and conversions. Simply keeping your featured products and site banners up to date is a lot of work and takes design and merchandising know-how and skill.
  5. Inventory Management is Difficult. You need the right technology and people to manage that tech to properly forecast sales and purchase inventory. Low stock is a killer for an e-commerce business with a spike in demand, and overstocking can yield cash flow issues. It is important to have the expertise to strike the right balance between supply and demand.
  6. Product Development is a Unique Expertise. Even creating a shirt can be more difficult than it seems. Do you want print on demand? Or will the margin be too low and quality too erratic? Do you want to stock up prior to putting the items on sale?  Or run a pre-oder?  Will your consumers care about longer shipping times if you run a pre-order? Are you making goods on a standard blank? Or something higher-end? What blanks are on trend right now? These are just some of the questions that can arise when making a shirt, let alone hoodies, art prints, custom toys, cookware, custom fitness accessories, and more.
  7. Building a proper e-Commerce ecosystem for your brand is much more than just your web store these days. Amazon? Google Shopping? Facebook Commerce? Instagram Commerce? Pinterest Commerce?  Ebay? Wal-Mart? Brick and mortar/point of sale? The list is ever-growing. A true e-commerce-as-service company will build a cutting edge web store for you, but will also build and manage the correct ecosystem for your business that goes well-beyond your storefront.
  8. Email and SMS is more important than ever. We covered paid media ads, but your owned audience through email and SMS is probably more important. These are your brand ambassadors, super fans, and best customers. You have to have a robust strategy to capture, reach and engage without burning these consumers out.
  9. E-Commerce tech development is never-ending. Shopify is the go-to platform, and will be for a long time most likely. But there are new apps and customization possibilities being made possible for Shopify every day. A comprehensive e-commerce enablement company will follow these trends and will work with you to update your technology stack on an ongoing basis.
  10. Have all of your e-commerce needs under one roof. Instead of working with 9+ different companies for 1-9 listed above, and instead of hiring probably 20+ people, outsourcing these comprehensive needs to an e-commerce-as-service company will centralize your communications, planning, marketing, and inventory to a core team and strategy.

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