Amazon has come a long way since Jeff Bezos launched it in his garage in 1994. 25 years after that, it has become the world’s largest retailer and a household name when it comes to online shopping. Today, there are 119,928,851 million products available on Amazon as of April 2019. In addition, it ranks as the most popular shopping apps in the United States with 150.6 million mobile users.
Amazon is trusted by customers. In a recent survey involving more than 2,000 US customers, 89 percent of buyers say they are likely to buy products from Amazon rather than other ecommerce sites. Without a doubt, Amazon is the king of ecommerce shopping. Proof of this is the fact that there are an estimated 103 million US Amazon Prime subscribers. This is up from 95 million in June 2018.
However, as popular as it is, learning how to operate an Amazon business can be a little tricky. If you have an online store on Amazon’s platform, it involves more than just listing your products on the Marketplace. It involves other tasks like fulfilling orders, tracking inventory, coordinating with shipping companies, suppliers, and others.
These tasks are simple but it can take your focus away from what you need to do and that is to manage your business. It can become even tougher if you will also be assuming the role of accountant, marketing specialist, SEO, customer service, etc. You want to be “ON” the business instead of “IN” it.
With this in mind, you need to learn how to outsource your Amazon operations. In any business, the owner cannot be a “jack-of-all-trades.” You have to accept the fact that you may not have the technical skills or expertise to answer customer queries or editing images to suit Amazon’s standards for product pages. Bottom line is it may not be as simple as you thought it was.
Every business has its pain points which could hinder you from growing your business. The solution is to focus on business growth and outsource the tasks that stop you from becoming successful as an ecommerce retailer. This article will delve on the following topics:
- Why Outsource Your Amazon Business?
- Tasks You Can Delegate To A Provider
- Freelance or In-House Employees: Which to Choose?
- Steps In Outsourcing Amazon Operations
- How To Outsource Fulfillment: Questions To Ask When Looking For A Fulfillment Partner
Why Outsource Your Amazon Business?
Outsourcing your Amazon business to an experienced provider makes sense if you are just starting out on the platform. Before learning how to outsource your Amazon business, here are some reasons you should be outsourcing your Amazon business:
You are just starting out on Amazon
Okay. You already have a brand name, you’ve listed your products on Amazon, and have already created an account. However, you may be having the same problem that other starting Amazon business owners experience: lack of time and lack of operating and marketing strategies. If getting started with your online store is a problem, outsourcing your business may be a good option.
By outsourcing, the agency will handle all the aspects of your operation. They can also come up with a distribution strategy and help with your distribution needs and implement a custom sales plan for your brand. You should choose a provider that knows the in’s and out’s of Amazon.
You’re just starting to build relationships with Amazon
If you are just starting out on Amazon, it is likely that you are just starting to build relationships with the Amazon Support Team. Likewise, running an Amazon business entails being updated with Amazon policy changes. Keeping up with these changes may come as a surprise to you and you may not be able to handle it.
With Amazon outsourcing, you don’t have to worry about it anymore. The outsourcing company may already have established a good relationship with the Amazon support team. Aside from that, they are always updated with any policy changes. They will keep you informed of these changes so you can make adjustments to your operations.
You’re losing money
You know you’re losing money but you don’t know where. Could it be on FBA fees or ad spend? You’ve checked all your accounts but could not find where the money drain is coming from. If you can’t pinpoint where the problem is, it can be difficult to find a solution.
Hiring a company that specializes in Amazon FBA outsourcing will help you find where the money drain is coming from. They are familiar with FBA fees, ad spending, and hidden costs. When they are able to trace the source of the money drain, the outsourcing agency will guide you on what to do next to prevent money drain.
You haven’t invested in branding or marketing yet
Amazon is not a platform for those who just want to make quick money. It supports businesses looking to grow on the platform. However, growing your business means you need to have knowledge of social media marketing, SEO, brand awareness, and comprehension of the smartest tools and apps for brand building. This requires investing in advertising and marketing to grow your brand and get your products noticed.
If you’re just learning the ropes of how to outsource your Amazon operations, you will need to invest in branding and/or marketing. The outsourcing agency will have a clear understanding of advertising, sales, and marketing. By outsourcing, your internal product listings can be optimized and will make your external marketing strategy more efficient.
You have no time for ads
Advertising will be good for your Amazon business. However, you aren’t sure how to get started. You also know that your product would do well on Amazon search or on the sidebar of a page but don’t have enough knowledge about the Headline Search Ads or the Buy Box. You’re ready to throw in your hat on advertising but still don’t know how to do it.
When learning how to outsource your Amazon business, you should realize that most providers have the experience and expertise in managing advertising campaigns. They have a team that understands creative design, ad optimization, and SEO research and can integrate it into your campaign. With the help of the outsourcing company, you will become a better Amazon seller.
Tasks You Can Delegate To A Provider
Amazon has become a competitive marketplace for sellers. In 2018 alone, Amazon saw an addition of 300,000 sellers and a plethora of new entries into the marketplace. If you are just starting out, it can be extremely challenging for you to break through the noise. From figuring out the right products to sell, dealing with suppliers, inventory management, running advertising campaigns, fulfillment, shipping, addressing customer queries, etc.. That’s a lot of work.
There is an expression that goes “you have to spend money to make money” How you can make money if you are already drained with tasks you shouldn’t be doing in the first place? You need to rid yourself of tasks that keep you away from doing what you are supposed to be doing – managing your business. Here are some of the tasks that you can delegate to an outsourcing company.
Product Listing and Optimization
Once you have a seller account, you need to list and catalog your products to comply with Amazon guidelines. The more products you plan to sell, the more time consuming it becomes and the more complicated it becomes for you to list them.
A virtual assistant can help you with listing and optimizing your product with the right title, description, product specifications, and images based on Amazon guidelines. They can also constantly monitor, tweak, or update the listing to improve results. The VA will have a better understanding of the constantly changing policies of Amazon and help improve visibility of your product in search engines. The VA can also create an impactful, high quality detail page/enhanced brand content which will further improve SEO and promote brand value.
Product Sourcing
In a competitive marketplace like Amazon, you need to find ways to stay ahead of the competition. You need to find a product that will stand out to your customers. At first, you would think that you are the best person for the job but it is not always the case.
Customers are always looking for new and interesting products. You need the help of someone who is not only keen for high-quality products but also has an understanding for the buying patterns of consumers and recent trends. A product sourcing expert has vast knowledge of what, where, and how to get products. They have a wide network of wholesalers and manufacturers. They can get good deals from sales managers.
Product Photography/Graphic Design
An amazing product listing isn’t enough to impress potential buyers. You also need to have detail-oriented, eye-catching product images to grab their attention and attract more visitors to your page. An eCommerce product photographer is an expert in image editing and knows about the Amazon marketplace guidelines for image uploads. They use advanced software to help drive more sales to your e-commerce store.
You don’t only need images in your product listings but also in your website, landing pages, and social media pages. A graphic designer can help ensure that you have a professional looking and appealing design for all these sales channels.
Amazon PPC Management
Having great products and appealing images does not always translate to increased sales. You have to maximize every opportunity for getting your products out there. Pay-Per-Click (PPC) or Sponsored Product campaigns are just two ways you can boost your ranking in the Amazon Marketplace and increase traction to your products. Hiring a PPC manager for your Amazon business allows you to control and appropriately allocate your marketing budget. They have the right tools for tracking the performance of your campaigns and take the right action.
Customer Service
As an Amazon business owner, you need to keep in mind the importance of customer satisfaction. You need to immediately respond to any questions as it can have a huge impact on your business. Unfortunately, you don’t have the luxury of time to wait and answer these customer emails. A request for replacement can be a cause of worry if you are a business owner. This is where a customer service expert can come in handy.
The outsourced customer service can help you with answering calls and emails promptly. They are knowledgeable with answering emails and possess good language skills. A customer service specialist is able to pacify negative emotions and can turn them into positive feedback.
FBA Management
Fulfillment By Amazon (FBA) can be another time-consuming task that requires the help of an outsourced provider. Order fulfillment is a long process that goes from Point-of-Sale at your site to the time the product is delivered to the customer. Managing all the orders yourself can be overwhelming. An FBA manager has experience in multiple e-commerce platforms, shipping and tracking orders, and resolving shipping issues promptly. They can handle all order-related issues so you can focus on business-related tasks.
Processing Orders
Order processing can be a staggering task if you are running a big store on Amazon. Outsourcing this function can be most helpful during peak seasons like the Thanksgiving and Christmas holidays. Just imagine the number of orders that needs to be processed during these times. Order processors have the skills and experience to take and process orders and coordinate with your suppliers to ensure a seamless order processing experience for shoppers.
Feedback and Metrics Management
Reviews can have a big impact on your Amazon business. According to BrightLocal’s “Local Consumer Review Survey,” 86% of consumers read reviews for local businesses and 91% of these consumers trust online reviews as much as personal recommendations. For this reason, you will need someone who will track customer feedback and respond to them in a timely manner. Outsourcing the task will help ensure that you can respond to negative feedback and keep your feedback score as high as possible. If your Amazon metrics are below the required levels, the provider can inform you and figure out how to increase your scores.
Bookkeeping
Accounting is something that most business owners cannot do on their own. A bookkeeper can help you look out for your budget and manage your expenses. Outsourcing to a bookkeeper means you get quality service for a lower price.
Analyzing Amazon Reports
Progress reports can help you keep track of your products’ performance. You can outsource this task to someone who can check on the different aspects of sales, advertising, and other areas where you allocate your budget. They can consolidate and analyze results and provide actions for improvement.
Freelance or In-House Employees: Which to Choose?
There are two ways you can choose with Amazon outsourcing, you can either hire freelancers or in-house employees. Your choice will depend on your type of business and volume of sales. Before determining which one to hire for your Amazon business, let us first differentiate one from the other.
A freelancer will work at a slightly higher hourly rate but won’t do 40 hours of work per week. Aside from that, they may have one or two more Amazon clients and are handling several accounts. The biggest benefit of hiring a freelancer is that you can bring in an expert for a certain period of time without making a long-term commitment.
A freelancer specializes in specific tasks and focuses on those tasks. They gain more practical knowledge by working with several clients. Fulfillment, for example, is a specialized skill that is often outsourced because it often requires efficient management of large inventory of products.
However, there are several drawbacks of outsourcing to a freelancer. First, it may take time for you to find a high-quality freelancer. Second, if you do find one, the provider may tend to be very busy. Third, they generally have a higher hourly rate compared to an in-house employee.
In-house employees, on the other hand, will likely remain in your company for a longer period of time and may eventually seek higher positions. The good thing about in-house employees is that you control their time, activity, and quality.
When it comes to Amazon FBA outsourcing, you need to create Standard Operational Procedures to alleviate interactions between staff and the business owner and also to reduce the length of your on-boarding process for future employees.
How to effectively hire the right professional
Whether you choose to hire a freelancer or an in-house staff, there are certain things you need to keep in mind when learning how to outsource your Amazon operations.
Hiring means we failed to execute and need help
The first thing you need to ask yourself when hiring staff is “What don’t I do well?” There is a misconception that hiring or outsourcing is an outcome of success but it isn’t. It is a result of the inability to create enough leverage to grow on your own. It means you need outside help.
Figure out what tasks are the most important for your time
Have a plan for hiring the right staff for the Amazon tasks you will outsource. It is best that you retain the best part for yourself. Potential freelancers that will help scale your business will mostly come from Upwork and other freelance websites so make sure to validate their past experience.
So when is the best time to hire? It is when you are already using just about all of the time that you have allotted to your business.
Steps In Outsourcing Amazon Operations
As you try to scale your business, you will try to be hands on with your operations. But management and doing the menial tasks at the same time can be overwhelming and often leads to unfavorable results. But, you don’t have to be a CEO and employee at the same time. You can outsource some of the tasks and focus on the business-related aspects of your business. Here are the steps on how to outsource your Amazon business.
Check your business scalability
When choosing the task you will outsource, you need to take a look at your current business process. Which aspect of your business needs reinforcement? There might be some areas you have ignored because you lacked the time. Rank these tasks based on your personal skill set and the value your business will get from doing them yourself.
If you have a limited budget, start with simple tasks or hire lower-level freelancers whom you can train. If you have a larger budget, you can hire experienced freelancers who are ready to get to work. You can then save time and money and focus on growing your business.
Put value on your time
When running a business, every second and every dollar counts. You cannot afford to waste time and money. Ask yourself “How much do I make in an hour?” and “How much am I worth?’ Then consider the number of days you work in a week and the extra time you put during the peak season when it can get really busy.
Once you have determined your value as an Amazon business owner, the next step in Amazon outsourcing is to start prioritizing the tasks that you need to delegate to a provider. What should you be doing? What gives you the best value for your time? What can you not afford to pass off? This is what you should keep and outsource the rest.
Create Task Descriptions
Once you have identified the tasks to be outsourced, write a short description of what needs to be done for the tasks. You should provide a detailed description on what the task is all about. Calculate how much each task will take to complete. This will help you determine the number of available hours you need the freelancer to work and how much your budget will be.
Find the Freelancer
Now you know the benefits of outsourcing, the next step in Amazon FBA outsourcing is to search for the freelancer. There are several freelance outsourcing platforms to choose from. The more popular ones are Upwork and Freelancer.com. They may have a directory with freelance profiles. You can post a worker request on these platforms. Freelancers will apply and you can move them to the interview process if you liked their introductions. You can easily receive 10-15 applications per worker request that you posted on the platform.
Interview, Hire, And Onboard
During the interview process, you can ask for samples or a portfolio of work related to the task. If freelancers don’t have relevant samples, don’t discard their application. Keep in mind that freelancers sign non-disclosure agreements and may have worked on projects that are not exactly similar but require the same skills.
Does your task require specific deadlines? If so, ensure that the freelancer can promptly deliver. The freelancer may be perfect for the job but isn’t available when you need the task to be done. Working in different time zones can be beneficial in customer service but could prove disastrous in other business areas.
During the interview, you should also determine the level of onboarding you require. Some tasks may need instructions and onboarding for company-specific goals. During the onboarding, you need to establish with the freelancer the method of communication and frequency. This is key in establishing a good working relationship.
How To Outsource Fulfillment: Questions To Ask When Looking For A Fulfillment Partner
Learning how to outsource your Amazon operations does not only involve delegating tasks but could also involve expanding warehousing, inventory management, product research, marketing, customer support, sales, and other areas of your ecommerce business.
Outsourcing fulfillment can be complex because it requires building relationships with carriers, process orders, pick and pack and making sure that goods are properly labeled and shipped to the customer within a reasonable time.
As your sales grow, making timely and efficient fulfillment can become overwhelming. Eventually, costs will go up and sales velocity will fluctuate. Maintaining an appropriate number of warehouse employees becomes a challenge and order volume can quickly exceed your capacity to cope up with the demands.
When learning how to outsource your Amazon business, you realize that outsourcing fulfillment makes sense. The provider will store products in their own warehouses, use their own software and machinery, and hire the pick and pack employees. However, not all fulfillment providers are equal. Some are designed to work with smaller retailers while others are more effective with larger businesses.
In order to make Amazon outsourcing easier, asking the right questions will help you make the best decision for your e-commerce store.
Why Should I Outsource?
Meeting order demands can be difficult if you do not have a fulfillment partner. Here are some reasons you should consider outsourcing fulfillment to a provider.
Faster delivery times
Finding a good provider can help you boost your account metrics and meet promised shipping requirements. If your products are not delivered to the customer on time, Amazon FBA outsourcing can help alleviate this.
Raise conversion rates by leveraging fast shipping tags
Fast shipping tags can help your store stand out in search results and raise your conversion rate. With Amazon Marketplace becoming a competitive arena, it can be hard to stand out. Fast shipping tags can give you a leg up on the competition.
You want to avoid Amazon’s long-term storage rates
Amazon storage fees can skyrocket over the long term. Stored items take up space. Transferring excess inventory to other warehouses will allow you to maintain rapid delivery standards without paying costly storage fees.
You want to diversify beyond Amazon
Most fulfillment partners will give you the opportunity for seamless integration with different marketplaces such as eBay, Walmart and/or Shopify. They offer real-time inventory management synchronization across all your channels so that products sold on your website are updated across all marketplaces. This will help prevent backorders and improve customer satisfaction so you don’t have to split inventory.
You want to focus on growth
By understanding how to outsource Amazon operations, you are able to focus on growing your business. You can now work on improving product development, branding, and sales for example.
Questions to ask when choosing a fulfillment provider
Choosing a fulfillment partner can be intimidating and costly if you make the wrong choice. Here are some questions you need to ask when choosing a provider:
Pricing
This is a problematic area for most 3PLs. Most providers are not transparent with their pricing and most sellers are not aware of their expenses for fulfillment until the bill arrives. Knowledge of the pricing will reduce major headaches along the way. Most providers collect the following:
- Receive
- Storage
- Box
- Pick and Pack
- Label Printing
- Shipping
- Workorders
- Long Zone Fees
- Account Fees
Supported fast tags
As mentioned earlier, fast shipping tags are key to conversion. They can help you stand out from the competition. Choose a fulfillment partner that can help with getting the right shipping tag on your listing.
Supported integrations
From marketplace to tools, make sure that your fulfillment partner works with the software and channels you prefer. If you are planning to expand new channels in the near future, you should make sure that the provider also supports them.
What products can you take?
Use case specific questions based on your needs. If you are selling batteries, ask if it is supported by fast shipping programs.
Capacity constraints
If your partner does not offer quick scalability, you won’t be able to maintain a long relationship with them. Look for a provider that uses shared-space warehousing and works with multiple customers in a single space. With this option, you can easily scale your business to meet growing demands. But not every provider will give you this choice.
Warehouse locations
Look for a logistics partner who offers quick and efficient shipping of goods. Check if the locations of their warehouses are located around the country or in geographical locations where you make the most sales. Fulfillment companies will also move their goods to the nearest warehouse to a destination before handing it over to a carrier reducing shipping costs and increasing delivery speeds.
FBA prep
Most fulfillment providers will offer everything from basic freight services to full-service solutions, which includes import and freight inspection or FBA prep. Although you are likely to pay for each service, they can prove valuable to your company.
Reimbursement policy
Although we do not want it to happen, things can go wrong. Boxes will drop, items will break, and things can get lost. Make sure you know exactly how your fulfillment partner will handle it. Most providers publish their policy online in their support forums so you can check it there.
How quickly can you start?
Most 3PLs take weeks to set up and operate. During those weeks, you could be making money instead. Look for a provider with a simple signup process and easy onboarding process that can help get your business get started quickly.