Can An eCommerce Store Be Run Completely By Freelancers?

ECommerce is one of the most resource-intensive businesses online. An online store owner is expected to wear multiple hats every single day in running their business. The role involves negotiating with suppliers, listing your products, marketing your business, managing ads, attending to customer support requests, handling shipments, managing reviews and so on.

Despite the amount of work involved, eCommerce is often a low-margin business thanks to the sheer number of competitors in the space. This is why a significant chunk of online stores close down within a year of operation. It is simply impossible to handle so many tasks effectively as a bootstrapped startup. Hiring freelancers to handle your work may often seem out of question since your business is low-margin and you simply cannot afford to spend money hiring people.

That is however not the right strategy. In this article, we will provide you with a step by step action plan on how you can have your eCommerce store effectively run completely by freelancers.

Step 1: Understanding your limits

Most entrepreneurs launch an eCommerce store as a side hustle. This leaves them with a limited amount of time and resources to handle this venture. The first step towards establishing a successful eCommerce venture with freelancers is knowing your own limits.

The questions you must be asking yourself are:

How much time can I spend on my online store each day?

How much money can I spend on my store in a month?

The answers to these questions will shape your plan of action. If you can afford to spend five hours each day, then you could handle a lot of marketing and sales and only hire freelancers to handle support requests. On the other hand, if all you have is money and no time, then you have no choice but to outsource almost all tasks. If you have little of both, you will still find that a store run completely by freelancers is more profitable than a store run by you alone.

Step 2: Find the right business idea

Ideally, you would invest in an online store that has high margins and little to no competition. Unfortunately, something like that does not exist (unless you are an inventor and hold a patent to the idea). High margin businesses attract a lot of entrepreneurs and this makes it highly competitive.

The right business idea is one where you can beat the competition with your marketing budget. At the same time, the product should have sufficient margins to let you scale.

Let us take an example here. Selling T-shirts online is a hugely competitive industry with thousands of competitors. Your margins are also low. This makes it an unviable business idea. However, there are two ways to penetrate the market here.

One way to do this is by creating a small niche within the industry. You may remember the company ‘Tipsy Elves’ that made it to Shark Tank a few years back. This is a multi-million dollar operation today focused on a very niche market – ugly sweaters for Christmas. The competition within this niche is relatively lower, allowing them to focus on better margins.

Another way to do this is by focusing on custom merchandise. Customers love spending money on unique merchandise. Once again, the competition here is much lower and the product can enjoy high margins.

With the right business idea, you are all set with your targets, and you can pass off the rest of the sourcing, listing, marketing and all that, setting up your store to be run completely by freelancers so you can focus on the next big idea.

Step 3: Identify your procurement strategy

Once you have a product idea in place, the next step is to look at the procurement strategy. There are several ways to do this profitably. The most common strategy is to find a supplier who can produce your products for cheap. Freelance sourcers are great for this task as they know who to look for and how to build relationships with them. Websites like Alibaba, for instance, help you connect with manufacturers from countries like China that have low production and shipping costs. Direct procurement is also possible; however, you would need to hold product locally till you make a sale. Holding your own inventory adds to the cost of the product and can thus bring your margins down.

Another way to do this is by getting the product shipped directly from the supplier to the customer. Websites like AliExpress can help you get in touch with thousands of suppliers. This is called dropshipping and it minimizes your holding costs, thus improving net margins. It is worth pointing out that suppliers located outside your country could increase shipping times and this could be a source of frustration among customers. Again, using freelancers to negotiate details like this on your behalf saves you a lot of time and headache.

Step 4: Prepare a business operations plan

Before moving on to your freelancer strategy, it is important to prepare a comprehensive marketing plan for your business. How you market your product depends to a great extent on your product category. Going back to the example of t-shirts, it is extremely difficult to get your website ranked on Google for these highly competitive keywords. Even if you manage to do it, chances are that a lot of your target customers may directly land on sites like Amazon for their purchase. Such products should focus on discovery-focused marketing. Facebook and Instagram marketing are thus a better idea than Search Engine Optimization (SEO).

On the other hand, if you sell specific brands of auto parts, then chances are that your target customers search Google. SEO and content marketing can help your business attract potential buyers to your site in this case.

The ideal marketing plan should answer the following questions:

In which marketing channels do I plan on investing?

How much time would each of these strategies require each day?

How good am I at executing these strategies?

Depending on your product category, you may also be inclined to replace marketing with sales. For instance, if you target a niche B2B industry like car filters or engine oil, then chances are that a lot of car repair shops might be interested. Such customers rely on existing vendors to provide them with the necessary supplies. A sales strategy might help you get a foot in the door.

In addition to this, you must also focus on the other aspects of operations like customer support, invoicing management, etc., to assess the time it will take and how much time you need to dedicate to these aspects of the business.

Regardless of how your operations will go, your store can be run completely by freelancers – it will simply require an adjustment in hiring. This is no problem at all, by the way, since freelance hiring is a highly scalable model that you can easily adjust to suit changing needs.

Step 5: Establish total costs

At this point, you have answers to all the possible questions before launching an eCommerce business. Depending on your procurement, marketing and operations strategy, prepare a list of all expenses over and above the cost of procurement. Do not discount your own labor time and that of the freelancers you will hire. Failing to do this can make your business unsustainable in the long run since it is highly unlikely that you could find a freelancer to take over your role, or that you would want to completely detach yourself from the business.

If the total costs leave you with little to no margins, revisit the steps above to identify alternate strategies that can make your business viable.

Step 6: Freelancer strategy

Before we begin this, it is important to identify the role that you are most productive at. If you handle only a handful of products or SKUs and your strength is in vendor negotiations, for instance, then it does not make sense to hire a freelancer to take care of this. Similarly, when you are just starting out, your order volume may not be high enough to warrant outsourcing customer support to a freelancer.

Besides these, identify recurring tasks like marketing, sales and order fulfillment that can be outsourced. If you can work five hours in a day on this business, it is a good idea to spend 80% of this time on the task that you are most productive at and have the highest expertise in. Freelancers with significant experience in other areas can handle the rest.

On the other hand, if you cannot afford to pay big bucks to a freelancer for high-level tasks like marketing or advertising, you may take these roles up and hire a freelancer for simpler tasks like customer support.

It may take a lot of tries to get your freelancing strategy right. But here is how you do it:

1.  Split up each component of your business into independent tasks.

For instance, sales and marketing could involve tasks like one hour of social media management, two hours of cold email outreach, 30 minutes of ads monitoring, and so on.

2.  Pick the tasks that you want.

Based on our suggestions earlier in this section, choose what you will do and assign a nominal cost for these tasks.

3.  Assign a budget for each of the other tasks.

For instance, you can find freelance virtual assistants from the Philippines or India where rates are lower than what you could get locally. This should leave you with more budget for other tasks.

4.  Consolidate all the cost data.

You need to assess the order volume and the point where you will break-even. Also assess if your current budget for marketing and advertising is adequate to meet this order volume. If it does not, go back to the drawing board to redefine your strategy.

FreeUp provides a fantastic platform for aspiring eCommerce entrepreneurs to find freelancers who can assist you in all aspects of running your business. However, freelancers cost money. The strategies provided in this article should help you build a sustainable eCommerce business strategy. And with lower costs, there’s a greater chance that you can structure your business to be run completely by freelancers, freeing up your valuable time

It is also worth pointing out that the strategy provided here is only a start. As your business grows, it is important to revisit your strategy. This way, you may look at reinvesting your profits back into hiring freelancers to take up more components of your business. This would leave you with more time and resources to contribute towards tasks that require more of your time.

Anand Srinivasan is the founder of Hubbion, a suite of free apps and resources. Check out their project management app for freelancers and small businesses.