The Ultimate Guide to Outsourcing Ecommerce Development: Risky or Worth It?

Business strategy
15mid read July 1, 2024
Business strategy
How to Outsource Ecommerce Development
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When the biggest online mother and child marketplace in the Middle East was building out, it seemed like they’d never roll the website out on time. Their in-house team was buried in tasks; and hiring another engineer was too long.

“We’re drowning. Our team can’t keep up, but short-term hires feel too risky. What if they don’t fit?”, CEO vented in a casual LinkedIn chat.

“Why not outsource ecommerce development? We could give it a try, no strings attached”, suggested their business partner.

We’ve seen these stories far too often at Elogic. Founders and ecommerce managers are wary of partnering with an agency, worrying about code ownership, process control, time differences, cultural fit, and whatnot.

But ecommerce outsourcing can be a game-changer. Read on to learn how outsourcing compares to in-house, who will benefit from each, and what results the marketplace achieved after taking the plunge into the unknown.

In-House vs Outsourcing Ecommerce: What’s the Difference?

When you’re figuring out the best way to develop your ecommerce website, it usually comes down to two choices: build an in-house team or outsource ecommerce development. 

Read more: Building an Ecommerce Team: A Best Practice Guide

While sourcing for an employee in-house, you recruit, train, manage, and pay your new hire all on your own. In  ecommerce outsourcing, this responsibility falls on the shoulders of a third-party vendor.

While in-house development offers greater control and cultural alignment, outsourcing ecommerce development can provide significant cost savings, access to a wider talent pool, and greater scalability. 

Both options have their pros and cons. 

In-house development is best for companies that require full control, cultural alignment, and have the resources to invest in long-term team building. On the other hand, outsourcing is ideal for businesses looking to save costs, access specialized expertise, and scale quickly without the overhead of hiring an in-house team.

Here’s a detailed comparison:

AspectIn-House DevelopmentOutsourcing Ecommerce
ControlHigh level of control over the development process, direct oversight and decision-making.Less direct control, but with clear communication channels to maintain project direction.
CostHigher upfront costs (salaries, benefits, infrastructure), ongoing overhead expenses.Typically, lower costs with flexible pricing models, pay-as-you-go without overhead.
ExpertiseLimited to the skillset of the in-house team, may need ongoing training and development.Access to a broad range of expertise and specialized skills without training costs.
ScalabilityMore challenging and time-consuming to scale, requires hiring and training new staff.Easier to scale up or down based on project needs, can quickly adjust team size.
Time to MarketPotentially slower due to hiring, onboarding, and ramp-up processes.Faster due to established processes and experienced teams ready to start immediately.
Quality AssuranceIn-house quality control, but may lack specialized skills in testing and bug fixing.Professional QA practices with experienced testers, often following industry standards.
InnovationMay be limited by internal capabilities and resources, depends on the team’s creativity.Access to innovative solutions and latest technologies from diverse projects.
FlexibilityLess flexible, bound by internal policies and schedules, harder to adapt to changes.High flexibility in terms of contract and project timelines, can easily pivot as needed.
Risk ManagementDirect oversight, but higher risk if the team lacks experience or faces unexpected issues.Shared risk, with the vendor responsible for meeting deadlines and handling issues.
Cultural FitEasier cultural alignment and communication within the same organizational culture.Potential cultural differences, mitigated by clear guidelines and established protocols.
Resource AvailabilityDepends on the local talent pool, may pose challenges in finding specialized skills.Global talent pool access, easier to find specific expertise for unique requirements.
Focus on Core BusinessIn-house teams may be distracted by multiple responsibilities and company priorities.Outsourcing allows internal teams to focus on core business activities and strategy.
Technological UpdatesRequires investment in new technologies and tools, ongoing learning curve.Outsourcing partners often have the latest tools and technologies, reducing your investment.
Project ManagementRequires strong internal project management skills, risk of internal conflicts.Experienced project managers provided by outsourcing firms ensure smooth workflow.

Benefits of Outsourcing Ecommerce Web Development

Outsourcing ecommerce web development can be a game-changer for businesses looking to optimize their resources and enhance their online presence. 

Perceived benefits of outsourcing have changed over the past years, although cost efficiency is consistently ranked in the first place:

3 BENEFITS OF OUTSIRCING_light
Top benefits of outsourcing. SSON Global Market Report 2024.
primary drives of outsourcing intiative

By leveraging the expertise of external professionals, companies can achieve significant advantages in cost, time, and scalability. Let’s delve into these benefits in detail.

Save money

Outsourcing ecommerce development can lead to substantial cost savings. The Deloitte survey shows that 70% of executives indicated cost was a primary reason for outsourcing, making it a compelling strategy for businesses of all sizes.

By partnering with external teams, you can avoid the high expenses that come with hiring, training, and maintaining an in-house development team. This approach offers flexible pricing models like fixed-price, time and material, or dedicated team arrangements. These options help you manage your budget better and keep costs predictable.

Read more: How Much Ecommerce Website Costs: Set the Right Budget for Your Project 

Outsourcing reduces overhead costs related to office space, equipment, and benefits, freeing up financial resources to invest in other areas of the business.

Save time

As trivial as it sounds, time is money. Outsource ecommerce development services to speed up the process: external teams have established workflows and experienced pros ready to dive in immediately. You can launch your ecommerce platform faster and stay ahead of the competition.

Remember the case of the online mother and child marketplace in the Middle East mentioned earlier? They have managed to speed the development time x2 and reduced the cost of hiring by one third. 

Learn how the marketplace leveraged the benefits of a dedicated Magento PWA team in the case study

Plus, outsourcing partners usually operate in different time zones, which means round-the-clock development and quicker turnaround times. This continuous workflow keeps projects moving steadily, avoiding the delays that can come with in-house teams.

Access the expertise of a team, not just one person

When you outsource ecommerce development, you’re not just hiring a single developer; you’re getting a whole team of skilled professionals. These teams have tons of experience across multiple projects, bringing deep expertise and proactive problem-solving skills to the table. They cover everything from frontend and backend development to UI/UX design, quality assurance, and project management.

Experienced teams will spot and fix potential issues early on, guiding your project to success with strategic insights and innovative solutions.

Scale and grow

According to Clutch, in 2023, small businesses are increasingly turning to outsourcing as a key growth strategy. 

83_ (1)
Small businesses using outsourcing for growth in 2023, Clutch

Ecommerce outsourcing provides the flexibility to scale your development efforts according to your business needs. You can easily adjust the headcount of your team without the hassle of hiring or letting them go. This way, you have the right resources at the right time, without long-term commitments or minimum team sizes. 

As your business grows or prepares for the sales season (like Black Friday), you can quickly ramp up your development team to meet increasing demands. During lower seasons, you can scale the team down, optimizing costs and maintaining efficiency. 

This dynamic scalability is crucial for businesses operating in volatile market conditions and varying project requirements.

Stay flexible

Managing an ecommerce business can be overwhelming, but outsourcing technical tasks to professionals lets you focus on your core activities. 

By handing off development to experts, you can concentrate on driving revenue, investing in marketing, and building your brand. This flexibility helps you adapt quickly to market changes and make strategic decisions with confidence.

Plus, outsourcing gives you access to the latest technologies and industry best practices, keeping your ecommerce platform competitive and up-to-date. By offloading technical responsibilities, you can maintain a lean structure, reduce complexity, and enhance overall agility.

Read more: How to Find a Professional Magento Partner: 10 Things to Consider 

Outsourcing ecommerce web development can save you money and time, give you access to expert knowledge, and let you scale efficiently while staying flexible. These perks make outsourcing a smart choice to boost your online presence and achieve long-term success.

Drawbacks of Outsourcing Ecommerce: What to Watch Out For

While outsourcing ecommerce development offers many benefits, there are also potential drawbacks.

You’ve all heard stories about developers delivering crappy code that slows your time to market, and some other engineers who speak broken English and can’t understand the final task. 

These challenges are real, but understanding them and knowing how to address them can ensure a successful outsourcing experience.

Time zone

One of the primary challenges of outsourcing is managing different time zones, which can complicate scheduling and coordination. Time differences can lead to delays in responses and might make it difficult to find the meeting time. 

However, if you set a clear communication plan, you might actually leverage different time zones to your advantage. For instance, if you’re based in the US and leave the edits to your dev team in Eastern Europe, you might actually wake up the next morning to all the changes you’ve requested. 

Solotop, the Finnish industrial automation manufacturer, actually saved time partnering with us at Elogic: the project was delivered with 125% accuracy! 

Check out the details of Solotop <> Elogic partnership in the case study. 

Communication difficulties

Communication can be a real challenge in outsourcing, especially if the English skills of your external team aren’t great. This can lead to mix-ups and setbacks in your project. 

To deal with this, make sure your outsourcing partner is top-notch at communicating. Use clear project docs, stay updated, and hop on video calls to keep everyone in sync and avoid costly misunderstandings.

Culture fit

Cultural differences can really affect how well a project flows. When work ethics, business practices, and how we talk don’t line up, it can cause serious friction. 

For instance, some Middle Eastern companies hesitate to team up with Western or European outsourcers, thinking we won’t click culturally. Still, values like transparency of processes, work ethics, alignment of values are universal across the globe. The best ecommerce development agencies will go the extra mile to ensure a smooth delivery process and excellent communication. 

See more about Elogic partnership with Kaneen, a beauty store in Saudi Arabia. 

Sharing our values and culture helps us sync up better, making work smoother and relationships stronger.

Quality of code

One big worry with outsourcing is the quality of code—it’s often tough to gauge until you’re knee-deep in the project. Bad code can hike up maintenance costs and stall progress. 

To tackle this, we set up a strict quality assurance routine: regular code checks, automated and hands-on testing, all to ensure top-notch quality. We keep you in the loop with transparent progress reports and real-time access to code repositories, so you can track every step.

Raise your ecommerce development projects with Elogic.

Ensure smooth ecommerce development with clear communication, cultural understanding, and strict quality checks.

Reach out to us!

How to Effectively Manage and Collaborate with an Outsourced Ecommerce Development Team

Managing and collaborating with an outsourced ecommerce development team requires clear communication, detailed planning, and consistent oversight. 

Here are ten essential strategies to ensure a successful partnership with an outsourcing ecommerce website development team.

  • Set clear expectations. Have a clear and concise written agreement outlining what you expect to receive. Deliverables, timelines, and quality standards will prevent misunderstandings and ensure both parties are on the same page.
  • Provide specific and concise goals. Detailed requirements help the outsourcing team understand exactly what needs to be achieved, reducing the risk of errors and misalignment.
  • Establish clear communication channels. Establish clear communication channels and protocols. Agree on the tools like Slack, Microsoft Teams, or Zoom for regular updates and discussions. 
  • Provide detailed documentation. Clear and comprehensive documentation is key to a successful outsourcing partnership. This includes technical specifications, design guidelines, and process documentation.
  • Schedule regular progress meetings. Regular progress meetings are vital for tracking the status and addressing issues. For instance, at Elogic, a dedicated project manager oversees the project progress and is included in the price.
  • Collaborate on testing and quality assurance. We ensure high-quality outcomes by establishing clear testing protocols and involving both teams in QA. We use tools like Jira, Trello, or Asana to track tasks, deadlines, and milestones, enhancing project visibility and team coordination.
  • Foster a collaborative environment. Look for proactive partners who prioritize open communication and mutual respect. The right vendor will naturally integrate into your organizational culture, making collaboration seamless and effective.
  • Monitor and evaluate performance. Monitor and evaluate the performance of the outsourcing team. Use KPIs to assess productivity, quality, and adherence to deadlines. Provide constructive feedback and address any issues.

By following these strategies, you can effectively manage and collaborate with an outsource ecommerce development company, ensuring a successful partnership and high-quality results for your ecommerce project.

How to Outsource Ecommerce Development: First Steps

Finding the right outsourcing partner requires careful planning and consideration. Here are the essential steps a founder needs to take to find their ideal outsourcing partner.

Define your project requirements

The first step is to clearly define your project requirements. Understanding what you need will guide your search and help you communicate effectively with potential partners.

  • Identify the scope: Determine the features, functionalities, and goals of your ecommerce platform. Consider whether you need a simple storefront or a complex multi-vendor marketplace with advanced features like analytics and CRM integration.
  • Set a budget: Establish a budget that includes development costs, maintenance, and potential contingencies. Ensure the budget is flexible enough to accommodate unexpected expenses and future scalability.
  • Timeline: Define the project timeline, including key milestones and deadlines. Be realistic about the time required for each phase of development, from initial planning to final deployment and testing.

Research potential partners

Conduct thorough research to identify potential outsourcing partners. Look for companies with a strong track record and expertise in ecommerce development.

  • Check reviews and testimonials: Utilize platforms like Clutch, G2, and Trustpilot to read client reviews, case studies, and testimonials. This will give you an insight into the partner’s reputation and reliability.
  • Evaluate portfolios: Review the portfolios of potential partners to assess their experience and the quality of their previous work. Focus on projects that are similar to yours in terms of complexity and industry.
  • Industry experience: Prefer partners with experience in your industry or similar projects. This ensures they understand the unique challenges and requirements of your market.

Assess technical expertise

Ensure that the potential partners have the technical expertise required for your project. This includes their proficiency in relevant technologies and platforms.

  • Technical skills: Assess their proficiency in ecommerce platforms like Magento, Shopify, WooCommerce, or custom solutions. Verify their experience with the specific technologies you need.
  • Certifications and accreditations: Look for certifications from recognized organizations that demonstrate their technical capabilities and commitment to quality.
  • Development practices: Inquire about their development methodologies, such as Agile or Scrum, and their approach to coding standards and quality assurance processes.

Evaluate their approach to project management

Effective project management is crucial for the success of your outsourcing partnership. Assess how the potential partners manage their projects and teams.

  • Project management tools: Ensure they use reliable project management tools like Jira, Trello, or Asana to keep track of tasks, deadlines, and milestones.
  • Team structure: Understand their team structure, including the roles and responsibilities of each team member. Ensure there is a dedicated project manager to oversee your project.
  • Progress reporting: Ensure they provide regular progress reports and updates. This will help you stay informed about the project’s status and any potential issues.

Request proposals and conduct interviews

Narrow down your list of potential partners and request detailed proposals. Conduct interviews to further evaluate their suitability.

Read more: RFP for Ecommerce Website: Hunting Out the Best Vendor to Replatform 

  • Detailed proposals: Ask for proposals that outline their approach, timeline, and cost estimates. Ensure the proposals are comprehensive and tailored to your specific requirements.
  • Interviews: Conduct interviews with the project managers and key team members to understand their working style and expertise. Discuss their problem-solving approach and how they handle challenges.
  • Reference checks: Contact previous clients to verify their experiences and satisfaction with the partner. Ask about the partner’s reliability, communication, and ability to meet deadlines.

Legal and security considerations

Ensure that the outsourcing partner complies with legal and security standards to protect your business and customer data.

  • Contracts and agreements: Have clear contracts that outline the scope, deliverables, timelines, and confidentiality clauses. Include terms for dispute resolution and project termination.
  • Data security: Ensure they have robust data security measures and compliance with relevant regulations like GDPR or CCPA. Verify their data protection policies, encryption practices, and access controls.
  • Intellectual property: Clarify the ownership of the code and intellectual property rights. Ensure that all deliverables, including source code and documentation, will be transferred to you upon project completion.

By following these steps, founders can effectively find and collaborate with an outsourcing ecommerce website development partner, ensuring a successful and productive partnership.

Afterthought

Outsourcing ecommerce development can be a strategic advantage for businesses of all sizes. 

Startups and small to mid-sized companies benefit from cost savings, access to specialized expertise, and the ability to scale quickly without the overhead of an in-house team. Large enterprises, on the other hand, can use outsourcing to enhance flexibility, innovate faster, and focus internal resources on core business activities. 

Whether you’re aiming to optimize your budget, accelerate growth, or drive innovation, outsourcing can be a powerful tool to achieve your goals.

Are you ready to take your ecommerce to the next level?

Let Elogic`s extensive ecommerce development and consulting experience help your businesses overcome obstacles and grow.

Contact us today!

Ecommerce Outsourcing FAQs

What is ecommerce outsourcing?

Ecommerce outsourcing involves hiring external professionals or companies to handle various aspects of your ecommerce business, such as development, marketing, and customer support.

What is the difference between offshoring and outsourcing?

Offshoring refers to relocating business processes to a different country, often to leverage lower labor costs, tax benefits, and access to a larger talent pool. While outsourcing involves hiring external organizations to perform tasks, which can be within or outside the country.

Should I hire in-house instead of outsourcing ecommerce?

Hiring in-house offers greater control and cultural alignment, while outsourcing can provide cost savings, access to specialized expertise, and scalability. It depends on factors like your budget, the need for specialized skills, time to market, project flexibility, and your focus on core business activities.

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