Today the eCommerce industry is actively expanding. And there are no signs that may indicate that is going to start losing momentum any time soon. The revenue of the eCommerce market was over $3,154 billion in 2023 and in 2024, it is expected to be around $3,647 billion. Though these figures already seem to be rather impressive, analysts have even more positive forecasts for 2028, when the revenue of the indicated market will reach the mark of $5,307 billion. It means that the CAGR for this period will be close to 10%. And given such sentiments in the industry, it is not surprising that the number of eCommerce projects is growing as well which boosts the demand for eCommerce outsourcing services.
In this blog post, we are going to talk about the reasons behind the popularity of outsourcing eCommerce website development and the key peculiarities of this approach to project realization.
What is eCommerce outsourcing?
Ecommerce full outsourcing presupposes hiring an external provider to deal with all tasks related to creating, managing, and running an online store. These projects typically include such tasks as website development, product sourcing, customer service, etc. However, very often businesses rely on an eCommerce outsourcing company only in tech aspects. In other words, in such cases, a service provider is responsible for building, maintaining, and updating an outsourced eCommerce solution.
In the IT industry, outsourcing is quite a popular approach to building, supporting, and modernizing solutions as the option to create an in-house development team is not feasible for many companies. In 2024, the revenue in the IT outsourcing market (including not only development services but also web hosting, administration outsourcing and other related tasks) is expected to be at the level of around $512.5 billion. According to forecasts, by 2028, it will reach $777.7 billion.
But what are the main drivers for this market in general, and the outsourced eCommerce projects in particular?
Benefits of outsourcing eCommerce web development
To understand why so many companies worldwide are ready to invest in eCommerce outsourcing it will be helpful to analyze the new opportunities that such services can bring to them.
Cost-efficiency
With smart planning, companies can greatly reduce their expenses on software development when they turn to a professional eCommerce outsourcing company like Anadea. While working with a vendor, you need to pay only for the provided service. But in the case of hiring in-house developers, you will have a lot of additional administrative expenses.
Flexibility and scalability
Modern outsourcing models allow businesses to introduce changes in the composition of their project teams even after the beginning of the project realization. You can always ask a service provider to expand your team or reduce the number of team members when there is such a need. In the case of in-house hiring, such tasks are much more time-consuming. Moreover, they are often associated with additional expenses.
Access to domain-specific expertise
For your outsourced eCommerce project, you can find a team that has rich experience and deep knowledge in the chosen business domain. Thanks to access to the global labor market, you also have the possibility of hiring experts even with the rarest skills, if they are required for your project.
Hiring the entire team at once
It is very convenient that you can just turn to an eCommerce outsourcing service provider with a list of your requirements and get a perfect composition of the team that will be working on your solution.
Focus on your core business processes
While your outsourcing eCommerce team will be building your solution, you can allocate more time to addressing the issues related to your core business activities.
In general, all the mentioned benefits are united by a common idea. All of them ensure the required convenience for businesses. But speaking about outsourcing eCommerce projects, we also should mention its possible drawbacks.
Possible risks related to outsourcing eCommerce solution development
Based on our experience, we see that quite often customers come to us with a row of fears. However, we can't say that their fears are groundless. Mainly, such concerns appear as a result of cooperation with unscrupulous vendors who decided to get quick money instead of building a well-established reputation that will guarantee stability and financial prosperity in the long term.
So, what are the possible issues that companies can face today?
Hidden costs
As we have stated above, the possibility of reducing costs is one of the benefits of eCommerce outsourcing. But at the same time, there is a risk of unforeseen expenses that may be a result of miscommunication. It can happen that your service provider will understand your requirements in the wrong way and the introduction of adjustments will lead to additional costs. Moreover, similar unpleasant surprises may appear in those cases when financial terms haven't been properly discussed at the very beginning.
To mitigate this risk, we recommend you talk to your eCommerce outsourcing service provider about all the requirements, scope, and expectations in advance and then regularly monitor the process of the project realization. Transparency is the main condition for eliminating any possible hidden costs.
Need to find a cultural fit
As the eCommerce outsourcing model presupposes that you can work with a development team from any corner of the world, the mother tongue of programmers will likely differ from yours, as well as the time zone where they are based. However, reliable software development companies try to hire developers not only with excellent tech skills but also with a good command of English. What's more, they are often very flexible and can shift their schedules to have the possibility of communicating with you in real time. To minimize any issues of this kind, it is always necessary to discuss such things with the chosen software development partner before signing a contract.
Need for client's constant involvement
Poor timing and overall poorly managed projects are frequent issues with outsourced teams. However, in most cases, the client's constant involvement doesn't allow this to happen. It is always difficult to predict whether you won't face timing issues if you have never worked with the chosen team before. However, you can at least study the reviews written by the company's customers in order to find out what areas for improvement they have indicated.
Need to disclose sensitive information
Data-related concerns are quite common when it comes to software development outsourcing as in this case, you will need to provide external specialists with sensitive information. However, a signed NDA in combination with robust data security measures taken by the company that you work with, will help to avoid data breaches and unauthorized access to it.
eCommerce web development services: What do they usually include?
The set of services that you can get at an eCommerce outsourcing company is usually rather wide. But it doesn't mean that you can't opt only for some of them. Everything should depend on the needs of your project and the scope of work that you can do with the help of your in-house team.
Traditionally eCommerce web development services include
- Custom software development;
- UI/UX design;
- Cloud migration services;
- Modernization services;
- Custom feature development;
- Payment system/CRM/ERP integration;
- Tech support and maintenance, etc.
On our website, you can read about one of the eCommerce projects that our team worked on. It was the creation of a specialized eCommerce store for people who like fishing and spending time in nature - Visdeal. As it originated from an already existing project, the main challenge was to develop a new solution while making sure that the first project would continue functioning. That's why our work included not only custom development but also scaling and modernization of an existing solution. For more details on this project, please follow the link.
Such an example demonstrates that quite often eCommerce web development may go much beyond the creation of a new platform from scratch.
Models of outsourced eCommerce development
It is possible to define three key models of outsourced eCommerce software development services. The choice should depend on your ongoing business needs and goals.
Full outsourcing
This model involves fully relying on the chosen project team in all the related services like UI/UX design, custom development, security, QA, project management, etc. The main advantage of this model is that there is no need to hire and support an in-house team as everything will be done by your partner.
Some businesses do not want to choose this model as they are afraid of not having enough control over the project realization. Nevertheless, when you have a trusted partner who is ready to inform you of the project's progress and is open to discussion at every stage of product development, there won't be any inconveniences or negative consequences.
Partial outsourcing
If you already have a strong in-house team but your employees do not have enough skills or time to take care of all the aspects of your project realization, you can choose this model. It means that you can work with an external partner only in the frameworks of some particular services like UX design or QA.
Though this model may look very attractive and feasible, it has some pitfalls. For example, it is possible that due to outsourcing only some separate services, the entire group of people who work on your project won't have a single vision. Moreover, you may face some issues related to the management of such projects.
Co-sourcing
This model unites the best practices of the two above-mentioned ones. Though you still will share the scope of tasks between your team and the team of the eCommerce outsourcing company, this model also includes a two-way collaboration between both parties. You do not just assign tasks to external specialists but also treat them as your own employees by integrating planning, project management, and other activities that allow them to dive deeper into your project.
Teams share responsibilities and work together to achieve common goals. If you opt for this model, you should be aware that there can be some difficulties related to establishing efficient communication and solid processes for collaboration. Such issues may appear especially in those cases when you work with an offshore partner.
How to outsource eCommerce website development
When you decide that you need the help of an eCommerce outsourcing service provider for your project, what should you do next? Here's a short step-by-step plan for you to follow.
- Define your needs and goals for the project.
- Choose a comfortable model of outsourcing.
- Find a reliable outsourcing partner.
- Discuss the scope of your project and financial terms.
- Sign a contract and start cooperation.
- Choose a comfortable communication channel and provide feedback.
Direct and open communication is one of the main conditions for your project's success. However, it will be impossible without having a professional service provider with well-established business flows.
How to choose the best eCommerce outsourcing company
When you start looking for companies that can build an outsourced eCommerce solution for your needs, you may see that there is a huge number of those that offer practically the same services (and even their rates may be similar). However, it doesn't mean that the cooperation with all of them will bring the same results. To make the right choice, you will need to bear into account a row of different parameters.
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Expertise in the chosen domain. It would be a good idea to choose a team that already has experience in building successful solutions for eCommerce. It is important to work with specialists who deeply understand the market needs and can offer you the best approaches for reaching your business goals. You can always ask a company to share its portfolio with you so that you can learn more about the team's professional achievements.
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Flexibility of the offered business models. You need to feel comfortable while working with an eCommerce outsourcing company. That's why before making a decision you should study what engagement models and financial terms a team can offer.
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Opinions of customers. It is vital to check out the reviews written by the company's customers. This information allows you to understand whether there are any pitfalls in the company's approaches so that you can decide whether you are ready to tolerate them. If you are interested in cooperating with Anadea, you can read not only reviews written by our customers on external platforms like GoodFirms or Clutch but also interviews with people who have worked directly with our team.
Freelancers or eCommerce outsourcing company?
Let's be honest, today there are a lot of prejudices against freelancers that make a lot of managers think that they should avoid cooperation with such specialists. But is it really so?
Pros of working with freelancers
Access to global talent
Engaging freelancers provides access to a broad and diverse talent pool across the globe. This access enables organizations to find highly specialized skills and niche expertise that may not be readily available in their local labor markets.
Quick hiring
The streamlined and flexible process of hiring freelancers reduces the time and administrative overhead typically associated with the traditional employment hiring process. This efficiency facilitates rapid project initiation and allows businesses to respond swiftly to market demands or project needs.
Lower costs
Opting to work with freelancers can lead to substantial savings on operational costs for businesses. This model eliminates the financial burden of continuous salaries, health benefits, and other related expenses that are typically required for full-time employees.
Cons of working with freelancers
Lack of responsibility
There is nothing new here: some freelancers may feel too relaxed and not take their obligations seriously as they do not treat their customers as their bosses or managers.
Failed deadlines
This point has the same nature as the previous one. But at the same time, such situations can be explained by the fact that freelancers try to take as many projects as possible to earn more money without estimating their own capacities to finish everything under the set schedule.
Poor quality of the work done
Unfortunately, you may have a solution that won't correspond to your expectations and it may be very challenging to convince a person to introduce changes.
Difficulties in establishing long-term cooperation
Even if everything has been done perfectly and you are fully satisfied with the results, there can't be a 100% guarantee that when you decide to modernize your product, you will be able to hire the same freelancer. This person may be busy with other projects and won't have the possibility to work with you when you need it.
As for outsourcing companies, a lot of benefits are quite close to those that the work with freelancers can provide. The main difference is that freelancers may have lower rates than developers at outsourcing agencies. However, namely cooperation with a professional outsourcing team can help you efficiently address the issues that you may face while working with freelancers.
When you establish cooperation with an eCommerce outsourcing service provider, all the conditions, including the scope of services, responsibilities, financial terms, etc. will be stated in the contract. It means that you will have more formal cooperation than in the case of freelancers. You will set clear deadlines and timeframes for the work that should be done. Moreover, if in the future you decide to turn to the company to modernize your product or develop any new features, it will be easier to hire the same team (or at least some specialists) again.
Yes, the work with a company may seem to be a more appealing option if you have a full-scale project. Nevertheless, it doesn't mean that you should never think about hiring freelancers. The work with them can become the best choice in some situations. For example, you can hire freelancers for small short-term tasks when you need to get them performed as soon as possible.
Final word
The development of an eCommerce platform is a responsible project and for its realization, you should be confident that you have a reliable team by your side. For those companies that do not have and are not planning to create in-house development teams, eCommerce outsourcing can become the best option.
This approach to software development allows businesses to optimize development costs, avoid a lot of administrative tasks related to hiring and onboarding, as well as work with the best specialists with niche expertise from all over the globe. If you are looking for an eCommerce outsourcing service provider with an outstanding reputation, you should know that at Anadea, we are always at your disposal. Do not hesitate to contact us to get more detailed information about what we can offer.
Frequently Asked Questions
What is eCommerce?
eCommerce can be described as the process of selling and buying products of different types online. For some traditional stores, eCommerce can become an additional channel for offering their goods to a wide audience without specific restrictions related to the time of the day and often also to the location of potential buyers. Moreover, some businesses do not run physical stores because they have chosen eCommerce as the only channel for their trading activities.
How much does outsourcing eCommerce website development cost?
When you start the discussion of your potential cooperation with an outsourcing company, you can ask for a quote. The team will analyze the specificity of your project, its complexity, the scope of work, and your individual needs. The exact amount can be estimated only when the team knows the requirements for the project. Based on our experience, we can say that the development of an eCommerce web platform typically costs around $70,000 but in reality, this figure can be lower or higher depending on the complexity of your solution and other factors.
