Advantages and Disadvantages of Outsourcing an eBay Business
Selling on eBay is a fun way to earn money from home on your own schedule. One of the best perks of eBay is that there are no barriers to entry and the sky is the limit on how much money you can make.
eBay is just like any other business in that there are limits to what one person can accomplish alone. At some point, the solo entrepreneur, or team of two people, is going to max out the amount of work that can be done.
Entrepreneurs have a motto, "You can never get more time, but you can always get more people." This is where scaling the business comes into play.
When is it time to hire more people?
Some eBay sellers hit a wall and are happy with the revenue at a certain point, like this mom who makes $3,000 a month selling thrift clothing. It may be time to hire help or outsource parts of your eBay business if:
- Your numbers are stuck. You have plateaued at a certain level of revenue or profit and can't seem to push it higher.
- You find yourself working more and more — there is little time for family, hobbies, or things you enjoy. You can't unplug from the business. There is no work-life balance.
- You are getting behind. It has become harder and harder to keep up with the demands of your growing business.
- You want to get to the next level with your business and realize you can't do it alone.
What parts of an eBay business can be outsourced?
Since they have been running their business alone for so long, eBay sellers may not realize there are parts of the business they can outsource to someone else.
Just about every piece of an eBay business can be delegated to someone either on-site or virtually. Keep in mind that outsourcing doesn't always have to be virtual. Some tasks that can be outsourced include:
- Procuring/finding inventory
- Cleaning/prepping inventory
- Photographing items
- Listing items
- Managing other employees or independent contractors
- Inventory management
The biggest problem most eBay sellers have it actually letting go of a task and delegating, and rightly so. They have build their business from the ground up and are passionate about what they do and don't want the business to be adversely affected by allowing other people to manage parts of it.
Disadvantages of Outsourcing
It can be uncomfortable to delegate parts of the business to another person, and things will go wrong until you work out a system. The major disadvantages of outsourcing are giving up control and taking a risk. A good entrepreneur knows when it is best to let someone else handle a task or process so he can focus on what he does best. When you add more people to the mix, there will be errors, miscommunications, and problems. The most successful entrepreneurs didn't get where they are today by doing everything themselves. They took risks, and some paid off.
- Cost is a disadvantage of outsourcing. It may cost money up front to hire the right help. Growth requires investments — it takes money to make money, and it takes money to grow.
- Helping the competition is a by-product of outsourcing that eBay sellers might fear. What if you hire someone to come to your home to help you photograph and list items, teach them everything you know, then they decide to open their own eBay store and become your competitor? This is one scenario that keeps sellers from hiring on-site help. They fear that the employee will become a local competitor and encroach on their inventory sources.
- Language barriers can be an issue when outsourcing to India or the Philippines. When everyone was jumping on the outsourcing bandwagon years ago, companies advertised how cheap the labor is in other countries. But cheap labor comes with problems, and a language barrier can sink a business very fast.
- Loss of quality. No one is going to do the work as carefully or as passionately as you will.
- Inconvenience is a major issue with at-home workers. It is invasive to have someone come to your home to work. At-home workers are used to doing things on their schedule, makeup and chasing out of pajamas is optional, and you've got to create a workspace for another person, which is often a challenge.
Advantages of Outsourcing
The New York Times explains outsourcing well:
Outsourcing is the practice of using outside firms to handle work normally performed within a company — is a familiar concept to many entrepreneurs. Small companies routinely outsource their payroll processing, accounting, distribution, and many other important functions — often because they have no other choice. Many large companies turn to outsourcing to cut costs. In response, entire industries have evolved to serve companies' outsourcing needs.
An eBay business is a little different than most businesses, but the game is still the same. Here are some ways that outsourcing can help an eBay business.
- Increased productivity. By delegating specific tasks, you can make the overall process more efficient and profitable. Perhaps hire a photographer only. She won't learn the "eBay" part of the business and run out and become a competitor.
- Division of labor. Rather than doing every single task yourself, you lessen your workload by having a virtual assistant list your items for you. A virtual assistant is not local and therefore cannot become a competitor, they are available on demand so you don't have to hire a full-time employee, and they don't come to your home so you don't have to worry about the mess in your kitchen or listen to the dog bark at them all day.
- Reduced stress. Imagine sending your assistant an email each morning with what you need to be done and spending the rest of the day doing the parts of the business the way you want, rather than doing tasks you don't like.
- Scalability of the business. One person can only do so much. A team of people can produce much more overall in the same amount of time.
Outsourcing may or may not be for you. If your business has stalled, consider testing outsourcing on a small part of your business to see if it is a viable solution. Sometimes, it takes some experimenting to find the right solution to move forward.