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    1. dontstopsellin is offline

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      #1

      Anyone got tips for outsourcing?

      Ive been getting curious about outsourcing, now that my business is getting a whole lot bigger than I even actually expected. I know theres a lot I need to consider, and I really just have no idea as to where I should start.
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    2. eBaypro97 is offline

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      #2
      Wow, yeah, outsourcing is a big decision. There are indeed things you need to consider, and while I’m sure you’ve done your homework, let’s go over some of those elements individually--

      You don’t want to outsource unless,

      ● The job isn’t central to making a profit or keeping competitive.
      ● Job is routine, but wastes resources and time.
      ● Temporary job, or job that recurs in cycles.
      ● Outsourcing is less expensive than doing the thing in-house, or
      ● it can be done cheaper in-house, but occupies resources better used elsewhere.
      ● Skill is highly specialized to the extent that it’s impractical to have an in-house employee do it.

      Also, you want to make sure you have all the data you need to actually outsource, and a key element is choosing a company--

      Select a company that’s willing to work with you. Make sure the company you choose is legit, and make sure they’re willing to be flexible and accommodate your needs. Think of this less as a partnership and more as engaging the outsource contact to provide you with a service. Situations change, and you don’t want to work for a company that isn’t willing to flex to meet those changes.

      Establish the standards you expect. If you outsource, you won’t be the one supervising the work outsourced. You need to outline your quality expectations in detail in the contract, and keep lines of communication open so you can stay on top of any developments that might affect that quality. You’ll still be a supervisor, but in another room, with the lights off, and only an email machine and telephone through which to interact with those you’re supervising.

      Arrange for constant communication. Schedule regular meetings with your contact. This is part of the long-distance supervision aspect of outsourcing. You want to stay on top of the company you hire, since it’s your reputation on the line when your outsourcer messes up.

      Secure insurance for emergencies. Even if your outsourcing contact can’t deliver, you still have to deliver. Make sure you have a contingency plan, and that your contact can work with you on that. Accounting companies should provide back-ups of the info they produce for you, and have it stored at a separate location, etcetera.

      Compare the contract with the MFSA Fulfillment Trade Customs. Go here: Fulfillment Trade Customs - Mailing & Fulfillment Service Association. The Mailing and Fulfillment Service Association keeps documents the standards of fulfillment contracts. It’ll give you a better idea of what to look for when reading your contract.

      Watch storage fees. Most warehousing providers have a 1 SKU (stock-keeping unit) per pallet minimum. That is, if you have 50 pallets worth of storage, but only 30 pallets worth of product, you’ll be paying for the 50. This number can get crazy really quick.

      Consider the size. Make sure your provider has a sufficient range of mailing container sizes. Over-sized packaging can seriously increase your shipping costs. You want containers just big enough to keep your product safe in transit, and that’s it.

      Avoid split orders. Not having containers big enough to handle a reasonably large order is just as bad as over-sized containers. Splitting your order means more shipping costs, and more import units likely to be held by customs.

      Get specialized cartons. Keep in mind that every square inch and every ounce of your package costs money. If your product can’t be Tetrised into a square or rectangle, then you might need to get fancy with your mailing containers.

      Options for Returned Merchandise. You’ll always have faulty merchandise, breakages, and simply impossible-to-please customers. Make absolutely certain your provider and you are on the same page when it comes to returned merchandise. For instance, does the offending product get shipped back to you directly or your provider?

      Consider the shipping account. Some companies use your UPS, et al account, some use their own. If your contact has its own accounts, you might consider closing yours.

      Check the terms of service. Seriously, you have to do this. You know those end-license-user agreements in front of every piece of software you’ve ever installed? You know how you usually just skip to the end and click [AGREE]? Well, you don’t get to do that. You get to read the whole thing. You’ll thank me later.

      Digital photography services. This is extremely helpful if you have new SKUs dropshipped directly from your contact to the customer.

      Accommodate gift wrapping. Most outsourcing companies don’t provide gift-wrapping services. Solve this by simply defining a gift-wrapped version of those SKUs likely to be requested as such.
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    3. Bill1357's Avatar
      Bill1357 is offline

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      #3
      How about checking out alternatives to outsourcing? Outsourcing takes jobs away from ur community. Ive seen entire communities ruined because the company that employed 70% of the ppl there picked up & left. Its corporate greed, using countries without strict labor laws to get cheap labor.

    4. eBaypro97 is offline

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      #4

      Quote:

      Originally Posted by Bill1357 View Post
      How about checking out alternatives to outsourcing? Outsourcing takes jobs away from ur community. I’ve seen entire communities ruined because the company that employed 70% of the ppl there picked up & left. It’s corporate greed, using countries without strict labor laws to get cheap labor.
      there’s plenty of legitimate reasons to outsource that don’t take jobs away from people in any real way. There’s a whole lot foreign providers can do better than what you can get locally. Would you rather have to find a gaggle of bilingual operators handling your Chinese customer support, or a whole team of native speakers? Likewise content creation-- it just makes sense to use talent local to the intended audience.

    5. dontstopsellin is offline

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      #5
      Yes, outsourcing can be harmful when a huge corporation pulls out of a community it’s helped support for decades, but we’re not talking about that level of business. I’m not supporting any communities, or even employing that many people. Outsourcing is a valuable tool to business and it isn’t fair to vilify anyone considering it just because it’s been abused by others. We work in a global economy, and interplay between countries is inevitable and worthwhile.

    6. eBaypro97 is offline

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      #6
      Above and beyond any of that, Dontstopsellin didn’t ask whether he should outsource, he asked how to get started. What we should be talking about here isn’t emotional or political reasons not to outsource, but business reasons. There are reasons not to outsource in addition to reasons for outsourcing, but this site is about providing information, not attempting to persuade the personal choices of others. If you can give us some valid business reasons Dontstopsellin shouldn't outsource, by all means share them. I think you’ll find that most of the reasons against outsourcing are essentially cases of the situation not matching the first list I posted. There’s more reasons for not working with a given outsourcing contact than there are genuine business reasons to not outsource.

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