Sep 02

Should you build your online store in-house or outsource it

The global eCommerce market is expected to reach US $6.07 trillion in 2024. Increase in disposable income, internet penetration, the ever-increasing base of smartphone users, and the convenience and multitude of choices that online shopping offers are a few factors contributing to the growth of the eCommerce market. From the data, it is amply clear that you cannot steer clear of eCommerce for long. Once you have decided to take the leap you are then faced with the most important and difficult question. Do I develop my eCommerce store in-house or outsource it to an Agency.

In-house Vs Outsourced: 3 main factors to consider

  1. The scale of the project
  2. The business line you are in
  3. Anticipated revenues and growth

The scale of the project

The scale and complexity of the project is one of the most important factors to consider when choosing to go the in-house route or outsource. If the project is simple then the outsourcing model works perfectly well. To develop a project in-house you will need to invest time and resources in identifying the right people, invest in hardware, office space for the team, etc. Another point to consider is how much maintenance work will be required to keep the store running smoothly once it goes live. If you do not foresee enough work once the store is up and do not have other projects in the pipeline then keeping the team engaged might be difficult. In short, hiring an in-house team for a small project and then dismantling it once the store goes live may not be the right approach.

The business line you are in

If you are a retailer trying to expand your online presence by setting up an eCommerce store or you are a non-IT enterprise, say an industrial distributor, it’s not advisable to add a large web/eCommerce development team to your existing IT department for this single project. In such a scenario the best option is to outsource the project to an Agency that can develop the solution and maintain it for you once the store goes online.

Company size, revenue and expected growth

Your company size, budgets you have set aside for the e-store, and the forecasted revenue play an important role in the decision to develop an in-house team or outsource to an Agency. If you are just starting your business you should keep overhead costs to a minimum. That’s why outsourcing is a good fit for startups and small businesses. While we all want dedicated employees to work on our projects it is advisable to partner with an Agency so that you can avoid the expenses related to recruitment, retention, etc. This also allows you to free up your resources and concentrate on your core business.

Developing an in-house team is best suited for medium and large enterprises, where budget is less of a constraint and large revenues are expected from the online business. But even in this scenario, the companies need to make sure that there is a detailed plan in place for product upgrades, adding new functionalities to the store and marketing campaigns that will keep the team busy after the store goes online.

In this article, we will take you through the pros and cons of having an in-house team or outsourcing and we will also put a framework for implementing it in practice.

In-House Development

No one knows your business as well as you do. What are people looking for while making a purchase, why certain products sell better than others, your customers’ purchase behavior and pattern – all these are rich customer insights that you have gained by doing business all these years and if you can translate these learnings into your eCommerce store then you are set for success. If you have an equally informed and committed team to back you then developing the eCommerce store in-house might be the best option.

Advantages of In-house team  

Easier to implement your vision

Your team will know how your business functions, have a clear understanding of your goals and can come up with a fully customized site that is geared to meet your business needs. No need to communicate all this to a third party and rely on their understanding.

Faster turn-around time

When you have a readily accessible team at your disposal then the turnaround time is much faster. Maintaining your site daily for optimal performance is the biggest challenge that an eCommerce site faces. A dedicated team can help you handle emergencies as and when they arise, fix bugs easily, make product changes, add new listings, etc ensuring that your site is up and ready for business 24/7.

Full control of the project

With an in-house development team you will have full control of the project and can assess the progress daily. Face to face meetings allows you to communicate more effectively, understand gaps in the project, take corrective actions, and put your project on fast-track.

Disadvantages  

Lack of expertise and skill gaps

Finding good talent is always a challenge in this field especially when the skill sets required are vast and varied. It is highly improbable that you will find people who are good and have all the skills required for your project and if you do chances are they are way too expensive. Lack of expertise and skill gaps are problems you encounter while putting together an in-house team and many a time you end up spending more money on training them or even hiring new people as and when new skills are required for the project.

Time-consuming

Identifying the right talent, mapping his/her skills with your project requirements, and onboarding them can be a time-consuming affair. That’s not all. When your team is lean and inexperienced you are most probably spending time reinventing the wheel and learning how to do new things – all this can hamper the progress of your project.

Employee turnover

Technical talent is in very high demand and the chances of losing your star team member is a risk that you will face throughout. In such an instance your project gets stalled until you find a replacement.

Lack of Security

With all the user data available online, eCommerce sites have been a favorite target of hackers. Hence ensuring security is one of the most critical aspects in an eCommerce business and if security breaches happen the cost can be too heavy for small businesses to bear. You need to invest in both knowledge and technology and train employees to be vigilant about online security – having an online security specialist on board can be costly.

Outsourcing

eCommerce solution providers live and breathe eCommerce technologies.  They are abreast of the latest market trends, have access to the latest technologies, and can come up with solutions that are apt for your business.

Advantages of outsourcing  

Broader skill set

To develop an eCommerce solution you need people with multiple skill sets.  It requires system architects, visualizers, web designers, app developers, content writers, etc. to come together to implement a project successfully. A single person can’t have expertise in all these fields and that’s where an Agency fares better. In an Agency all these people work together as a team to develop the best solution for you.

Single-window solution

Agencies have access to a larger knowledge pool and can offer you a single-window solution for both back-end eCommerce solutions and front-end web design.

Faster to market

The experience and expertise that eCommerce solution providers bring to the table are invaluable. Having worked on multiple projects, they know the various platforms like the back of their hand. This essentially means they can get your web store live in a much shorter time.

Disadvantages  of outsourcing

Dependence on the vendor

When you partner with a good agency you start to rely on them completely and forget to build the critical knowledge regarding the back-end technology and applications used. For best results, you should try to minimize the over-dependence and be able to take control of your project.

Lack of transparency

One of the biggest problems with outsourcing is the lack of transparency. Very often you are not aware of the progress of your project and issues are not notified on time and discussed. An effective communication process can eliminate this issue to a large extent and instill trust between the two teams.

Security and confidentiality of data

When you outsource you entrust the agency with confidential and sensitive data about your company and customers. Despite standard NDAs, companies constantly worry whether the confidentiality will be maintained and their data will be secure with the partner. The recommended approach is to do a proper background and reputation check when selecting an agency to work with.

A framework to develop your online store with an in-house team / outsource to an agency

In-house team  Outsource to an agency
Step 0Define the eCommerce goals, project scope and technologiesStep 0Define the eCommerce goals, project scope and technologies
Step 1Identify the person in the organization who will drive the eCommerce businessStep 1Scan the market for eCommerce Agencies specializing in your sector
Step 2Identify number of people and the skill sets required to implement your planStep 2Once you have shortlisted a few names, you should set meetings to understand the agencies’ area of expertise within eCommerceprojects undertaken so far their client baseplatforms they work onhow big is their teamresources they can allocate to your projectwork methodologies, etc.rough price estimate
Step 3Put a team together – identify, recruit and onboard talent with the right skill setsStep 3Sign NDA with shortlisted agencies and provide them with detailed project scope to get formal offers  
Step 4Create a team charter which will outline the final objective, each team member’s role and desired outcomesStep 4Evaluate the offers and negotiate the final deal with the agency you prefer. Draw up and sign a contract with clear deliverables, timeframes, and  pricing (or use the agency’s contract template after your adjustment)
Step 5Set the go-live date and work backward to create milestones for the project and each team member Continuously evaluate progress, make corrections and move forwardStep 5Initiate work on the project as per the agreed format: Allocate resources from your end to manage the Agency teamIdentify collaborative tools and establish communication processes

About Sorcible

At Sorcible we provide comprehensive and cutting-edge development services to build online stores that fully match your specific eCommerce requirements. We work with popular eCommerce platforms like Magento, Salesforce Commerce Cloud, BigCommerce, etc. and can design an online store with features and functionalities that turn your website traffic into conversions and repeat customers. In the last 12 years, we have helped set up multiple eCommerce stores for both small and large enterprises, so if you are looking for a new or better online store please send us a message through the form below.

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