Should You Outsource eCommerce Marketing?

Why Outsource eCommerce Marketing?

On average, eCommerce websites convert 2.72% of their visitors (Statista). Therefore, the average business needs 36.8 visitors to create 1 sale. Generating an abundance of affordable website traffic is essential, and internet marketing is the key to success. If a company cannot generate traffic, it will fail. Being so important, companies cannot leave marketing to chance. Thus, many businesses should outsource their marketing to professionals, but not every company. Truthfully, whether or not an eCommerce company should outsource its marketing depends on the situation. For start-ups, outsourcing may be too expensive, and large companies are likely better off hiring marketing employees to handle advertising in house. However, there are many companies that stand to benefit from outsourcing.

 

Infographic showing that eCommerce companies need lots of traffic to generate sales. Thus, it may be important to outsource their eCommerce marketing unless they are professionals.

 

Marketing Options 

There are tons of ways to market online businesses. Some of the more common marketing channels include the following:

  • Google ads (to learn more about Google ads, read this)
  • Social media ads
  • Affiliate marketing
  • Content marketing
  • Email marketing

The question remains, which should you choose? 

 

Infographic comparing various kinds of eCommerce marketing. It illustrates that Google and Facebook ads can be great, but expensive. Affiliate marketing is awesome, and you only pay when you get a sale. Content marketing generates long term success, but it takes time and effort. Marketing with email is effective, but limited by your email list. All forms of marketing have pros and cons, but companies need to use them all if possible.

To have a competitive advantage eCommerce companies need to be effective at various forms of marketing. Obviously, some companies may not be able to attain excellence in these marketing categories without time, effort, and training. Therefore, we suggest that you focus on mastering one form of marketing at a time. Start with the form of marketing you think is most valuable. Master it. Then branch out to another form of marketing. Of course, if you want to shortcut the process, or eliminate it altogether, you can outsource your eCommerce marketing. 

Benefits of outsourcing eCommerce Marketing

Do you do your own taxes or hire a CPA? My guess is you use outside help because you aren’t a tax expert. The cost of doing your own taxes could be astronomical. You might accidentally mess up and invite an audit, or you could miss out on thousands of dollars in acceptable write-offs. In the same way, doing your own advertising might be a mistake.

Professional eCommerce marketers may have thousands of hours invested in their field. And as their sole focus, most will spend 40+ hours a week focusing on advertising. Unless you, or someone within your company, is exceedingly proficient at marketing, an agency will be able to do it better than you.

Since they can probably do it better, it may be best to outsource your eCommerce marketing. However, if you, or someone in your company, can dedicate themselves to becoming an expert in online advertising, it might make sense. Unfortunately, labor costs may exceed what an advertising agency would have charged. This is especially true if the labor allocated to marketing does not have adequate experience and skill. Owners may not bill their own time, but the time they spend learning and doing advertising could have been spent on something else. Maybe something that they already know how to do well. And they still may not be doing as good of a job as marketing professionals who have a singular focus.

The benefits of outsourcing eCommerce marketing are that companies can experience the incredible sales and growth professional marketing provides, without needing expertise or focus. As an added benefit, sometimes it’s cheaper than paying an employee anyways.

What about larger companies?

The equation completely changes when companies are able to afford specialist employees who are dedicated solely to marketing. Most larger companies will be better off hiring an expert. Glass Door reports that $54,268 per year is the average salary for internet marketing specialists. If that person is a true expert, businesses will generally receive a better return than they would from spending $5,000 a month with a marketing agency. After all, the marketing agencies are hiring marketing specialists, paying their salaries, and then marking up their work to make a profit. Why not eliminate the mark-up? Of course, this only works if you have enough marketing work to justify a full-time salary.

Formula

Whether big or small, companies can use this simple formula to determine whether or not they should outsource their eCommerce marketing.

Calculate Cost 

First, calculate the cost of doing professional marketing in house. Add together all the subscriptions, tools, and payroll this will require. Write in an owner’s salary if he or she is the one performing the task. For example: $3,000 per year in subscriptions + $2,500 per year in tools + $30,000 in payroll (20 hours a week, $22 an hour, plus payroll expenses) = approximately $35,500 in annual cost

Then, do some research. Determine what it would cost to hire a marketing agency to perform the same tasks. For the purpose of this scenario let’s say the marketing company costs $3,500 per month = $42,000 annual cost

In this scenario, handling marketing in house is $6,500 cheaper per year.

 

Calculate the performance

Once you know your costs, find out what’s at stake. This will require more research, but it will be worth it. Determine what results you expect to get while doing marketing in house. This will be dependant on the skill level and resources of the marketer. 

Then, ask marketing companies for case studies of companies who have outsourced their eCommerce marketing to them. Determine what amount of sales you expect if you outsource to a marketing agency.

Now, compare the difference in profits. How much more or less will you make if you choose to outsource your marketing? In this scenario, if the number is more than $6,500 then it is better to outsource because the additional cost of an agency is outweighed by the additional profits.

Free Tool:

Click here and make a copy of this Google spreadsheet to calculate whether or not you should outsource your eCommerce marketing.

Conclusion

Choosing who will handle marketing is a big decision for eCommerce companies. Keeping it in house may make more sense for start-up companies tight on cash, or for large companies that can justify a full-time marketing position. However, for many companies, especially those who can’t afford a full-time marketer, outsourcing eCommerce marketing may save time and make financial sense. Attaining professional marketing could give a much-needed boost. 

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