E-commerce sites

[DomainMagnate]

Does anyone here own any e-commerce sites, or sites where you sell actual products? That can not be delivered online and need to take care of handling orders, shipping, customer support or even maintaining stock.

Do you deal with all that yourself, or how hard is it to outsource? Say if you want to hire someone in Indian, or elsewhere cheap? thanks!

[ClaytonL]

I don't own any e-commerce sites, but I work closely with a couple. Both of them handle all those tasks in house though, so I couldn't tell you about outsourcing them.

[Clinton]

DM, I used to own a site selling products but they were high tech products assembled by my staff in the UK. We did everything in-house.

Now I have a portfolio of sites a few of which sell downloadable products. Two of them sell software and Plimus takes care of everything - from taking payment to handling the downloads. I have to generate the sales and provide the support. I've been lucky in that the original developer of the software provides the support for a fee.

What you can outsource is going to be heavily influenced by the product and the business. If you're selling foam mattresses to customers in Germany it doesn't make sense to get each one shipped individually from the Phillipines. Volume is going to be another major determinant of what and how much you can outsource. Could you tell us a bit more about the business?

A word about hiring people from India: I've found them a bloody unreliable lot. And this is from someone who was born there, spent his first 25 years there and has a lot of friends there. At the top IT consultancies you have very professional and reliable people. When it comes to the freelancers, expect to find a different story. I won't say there aren't the occasional gems, but they are few and far between. I'm ashamed to say that out of the ones I've used many were short-termist, had "flexible" morals and took far too much of my time to manage.

[DomainMagnate]

Thanks for the info Clinton.
I don't have any specific business in mind, but looking at potential investment in that area due to the attractive prices/revenue figures. I've considered to purchase a few e-commerce sites before in various niches, but never bought any yet mostly due to those complications in outsourcing. I have a few software and ebook selling sites now too, it's all good as it's automated.
Here is one e-commerce site I considered buying at the time. I have other sites in the niche, so it'd fit well. Seems to be offline now actually, not a good sign..

Worked with many Indians over the years, probably well over 100 different people, there are all kinds. But I have a lot experience in finding reliable and affordable employees, much cheaper than hiring locally so this shouldn't be a problem.

[Clinton]

That's what the problem is then - you're mopping up all the good staff and leaving me with the rubbish!

Many old timers will swear that there's more money in product sales than in the Adsense/ text link / CPM type models. And my stats say they are probably right.

One benefit if you already have some ecommerce sites is that you can build volume around a niche. Opportunities for cost saving and efficiency gains open up when you have a bundle of similar sites all needing employee grade work done. I'd swear by a good set of manuals for employees. Break every job up to its smallest component and document it. It works for MacDonalds, it works for internet businesses. That gives you the flexibility to move your remote workers between tasks, fill work gaps caused by seasonal fluctuations and market conditions and allow employment of lower qualified/lower cost individuals than would otherwise be required.

I've noticed too that these product sites go for lower multiples. It's partly because of buyer apathy and not wanting to get involved in something that smells of B&M. And it's partly logistics - there have been a lot of product sites catering to the US market that just wouldn't have been right for me who's based in the UK. If you're in the right country and the figures for the business add up I'd say just jump in, take over and then decide what you're going to outsource and how.