What to Choose for Ecommerce Business: Outsourcing, Outstaffing or Freelance

It’s only when you begin managing an online shop that you understand how complex and multifaceted ecommerce business is and how much to you have to attend to. And the larger your business will grow, the more intense and uneven will be the pressure on your in-house personnel.

However, if you see your team can’t cope with everything that’s on their plate at the moment, for example, scaling up your online shop, don’t lose heart. Modern labor environment offers a variety of solutions how to save time, money and resources and get the job (development or any other) done. They are outstaffing, outsourcing and freelance, and close as they may seem, these business practices differ substantially and each is better sought for individual purposes.

The core of these three practices is hiring a third-party specialist for performing a certain scope of work. The decision to resort to such practices usually stems from the following arguments:

• shortage of in-house staff;
• accelerate scaling of the enterprise;
• make use to specific qualifications that full-time employees lack;
• desire to cut costs;
• saving time for industry-specific training or re-education of unskilled specialists.

Now let me explain in greater detail what each of the practices is about.

What is Outsourcing

Outsourcing is the business practice of hiring a specialist or the whole team of them to perform or support certain function. Traditionally, the activities that are outsourced are non-fundamental, but rather resource-consuming or demanding certain exclusive skill.
According to the statistics, the five more often outsourced activities include:

• Manufacturing;
• IT services;
• Research & Development;
• Distribution;
• Customer support (call centers).

The organizational peculiarity of outsourcing is that the scope of work is allocated completely to the outsourcing specialist, in form of a project or a full-bodied organizational activity. This way the outsourced team performance is supervised and occasionally corrected, but not truly managed. The success of their work usually depends on how high on specialist qualification is and how correctly the task was initially described. An outsourcing specialist cannot dedicate all his time and effort to one project and often participated in a number of them simultaneously.

What is Outstaffing

Outstaffing (it can also be called Full Time Equivalent), in its turn, is the business practice of hiring or “renting out” an employee remotely via a specialized outstaffing agency. The outstaffed specialist works for the agency and its the agency that pays him or her, provides insurance and pays taxes.

Outstaffing is generally better suited for enterprises that work with projects and therefore often require a wide variety of skills, sometimes very specific, for a relatively short period of time. Outstaffing allows the company to take on projects of any difficulty without spending time and resources on educating on-staff specialists to perform certain high-quality tasks.

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What is Freelance

Freelancer is a self-employed specialist who offers his / her services for a usually short period of time and a part-time activity. Freelancers rarely work for agencies; to find one, you need to go to specialized platforms where freelancers showcase their skills and set up their hourly rates. Freelance work is traditionally associated with creative activities like writing and translation, design, web-design, and illustration, etc., though of course, you can find freelance developers as well.

To set it straight, freelance is the least expensive option of all three of the business practices, because freelancers don’t pay taxes and don’t belong to any agency. At the same time, freelance is the least reliable of them all, for the agreement between the contractor and the freelancer is in most cases a verbal one, unsecured by any type of contract. What is more, the quality of service the freelancer provides can not be fully estimated until you hire the person.

So, which business practice is more suitable to apply in ecommerce? Here’s a table with the core activities you may consider giving to third-parties to perform and what type of business practice is better to reserve to in each case.

I hope I cleared out to you the differences between outsourcing, outstaffing and freelance for ecommerce. If you have any questions or comments, you’re most welcome to leave them down below.