You might think that you can do it all in your business, but the hard truth is that you can’t.
As your business scales up and grows, continuing to do literally everything is a waste of the resource that you are. To maintain sustainable growth, you’ll need to start outsourcing.
It’s critical to the scaling of business and turning it into a passive income. One good book on the subject is Work Less, Make More by James Shramko. In it, he discusses the strict boundaries he has for what he works on and when he works.
This post will be dedicated to explaining why you should have similar boundaries and why you should pass the torch on some responsibilities to employees.
We’ll also be telling you in more detail how to outsource dropshipping stores. By the end of this post, you’ll hopefully have an idea of how to apply this to your own business.
Too busy to read the entire article? Click the thumbnail below and you can listen to us discuss outsourcing in dropshipping instead.
Our Experience with Outsourcing
We’ll start with describing our own outsourcing story. Your experience could honestly differ from ours, but even then, it might follow the same basic pattern.
How We Got Introduced to Outsourcing
We’ve been in the dropshipping business since 2016, but we’d already been doing Kindle publishing at that time. Since we don’t write our own books or design our covers, we were already familiar with the concept of outsourcing.
We were first exposed to the idea of outsourcing for dropshipping business at an eCommerce All Stars conference, which was hosted by Ezra Firestone. James Shramko was there, and he gave a presentation about outsourcing.
He talked about hiring people in the Philippines to work in US and Australia-based businesses. That was kind of our inspiration, our tipping point to start trying it ourselves.
Looking for more information on dropshipping and how it works? Check out our guide on the dropshipping basics.
Starting to Outsource
After our inspiration at the conference, it was time to start outsourcing in our own business.
The first thing we had to do was define our own specializations. Before we went to that eCommerce All Stars conference, we were a little disorganized in our daily assignments.
We hadn’t clearly defined what we were both good at, so there was a lot of overlap between what we did. For instance, one day one of us would go on AdWords, and the next day, the other would. It was important that we determined our own specializations, so we knew better what we would be assigning to an employee.
Once we got that sorted out, we were ready to start hiring. We had a new store in mind and had already started working with suppliers. Our next goal was to get someone to list products on our store.
Uploading products for you is probably one of the best starting points for outsourcing. It’s not too complicated, and you can give clear instructions to your employee. It’s even easier if the supplier lets you copy and paste their images and descriptions.
We started by posting a job listing in a Facebook group. Through that listing, we were able to connect with someone and hire them.
We now have a couple employees who upload products for us full-time. It has freed up so much of our time, and it would do exactly the same thing for you.
Once you outsource something small like that, you realize how much of your time the task wasted when you were the one doing it.
If you want to scale up your business, you can’t be doing things as menial as product uploads. You need to value your time, and think of yourself as a CEO.
Learning to Value Our Time
As we mentioned before, outsourcing has freed up so much of our time. We have so many different hands working together in our dropshipping stores now. With these employees helping us, we keep ourselves and our skills from being spread too thin.
Your goal should be the same: to look at your business from the highest perspective and decide what to do next. You can’t really do this if you’re down on the frontlines, attending to mundane jobs like uploading products.
Another great book on this topic is E-Myth by Michael Gerber. In the book, Gerber talks about how so many people out there want to be this rich solopreneur who lives in exotic places and makes all this money online.
What people don’t realize is that even if you do have one online business making you money, you’re still going to need to work in it. You might as well outsource as much of the work as you can so you can pay attention to the large decisions instead.
Our Outsourcing Mistakes
As with many other things in life, we made a few mistakes, too. Outsourcing wasn’t smooth sailing from the get-go.
By telling you a couple of our mistakes, we hope you can learn from them and avoid them.
Mistake #1: Not having the documentation in place to hire someone.
At some point, we decided we wanted to have a customer service representative. Initially, we were a little scared to hire someone from the Philippines, so we actually ended up hiring a woman from the US.
We were paying her something like $12 hourly to handle our customers. The problem was, we didn’t have the documentation in place to make her job easy for her. Rather than having resources put together for her to handle her customer interactions without guidance from us, we ended up having to watch her like a hawk constantly.
As you can imagine, we ended up wasting as much time watching her as we would have if we’d just done the customer service ourselves. That defeated the entire purpose of outsourcing in the first place.
Mistake #2: Hiring someone with the hope they’ll revamp your business.
When we did get around to hiring someone in the Philippines, we picked this guy who had a ton of credentials and qualifications. He talked about developing a sophisticated ticketing system for us. We were suitably impressed, and we were going to pay him a salary of $12 an hour.
But we went into it with the wrong mentality: hoping for this employee to revamp our business for us. If you’re hiring a VP with a huge salary, they’ll obviously come in and make high-level changes to your business. However, you can’t expect that from someone you hired at a low level online.
Basically, you should scale your expectations of each employee accordingly.
Fixing Our Mistakes
Things really turned around for us in outsourcing when we came across a family friend who was looking for work.
Since this was someone we actually knew, it was imperative that we did everything right. We couldn’t treat her poorly or just fire her if something went wrong. We needed to have clearly defined expectations and documentation for her.
It wasn’t something that was on her – it was our responsibility to change our mindset and do everything correctly from the beginning. Hiring someone we knew forced us to do that, and it worked out really well.
We were both able to go on vacation for weeks at a time and leave her handling work for us in our absence.
The moral of the story you should take away from this part is, treat each hire carefully. Do it the right way, and you’ll find it the results are far more favorable.
Outsourcing: The Basics
Now that we’ve gone over our personal experience and mistakes, let’s circle around to the things you should be doing.
We’re going to discuss four different things:
- What kinds of tasks to outsource.
- Where to hire employees.
- When to start outsourcing.
- Why you should outsource.
What Kinds of Tasks to Outsource
There are four main jobs that are good to assign to employees: supplier communications, customer service, inputting order details, and inputting tracking details. We’ll talk about how we set up documentation for these tasks.
For supplier communications, we create what we call a “Supplier Encyclopedia” for our employees. It lists all our suppliers. Under each supplier in our encyclopedia, we’ll have categories on who to contact for which kind of inquiry, whether it’s a new order, an issue with an existing order, or a general question.
Customer service is a little trickier because you can’t always anticipate what a customer needs. Over time, though, we noticed that there were a lot of trends in customer interactions.
We make SOPs documenting how to handle the most common customer inquiries. For example, we’ll have SOPs about inputting a new order and tracking an existing one.
As far as tracking goes, we like to use Shipstation. The main reason we like it is because there’s a layer of management involved, so employees can’t just refund all orders as they see fit. Shopify doesn’t have anything like this, so if you just let them into your Shopify, they can cancel or refund orders.
Trainual is another good resource for creating a sort of owner’s manual for your business. We’re not sponsored by them, by the way, and we don’t personally use their software, but we’ve heard good things about them.
Regardless of how detailed your documentation is, though, you’ll probably need to be on hand to assist your customer service reps occasionally in the beginning.
If you want to know a little more about why we run our dropshipping stores on Shopify, take a look at our eBay Dropshipping Horror Story by clicking here.
You can also get a free trial of Shopify for yourself right here.
Where to Hire People
Where do you go to find the employees you need once you’re ready to hire?
We personally go to several different sites, including Indeed, Fiverr, and Manila Craigslist. Which one we choose largely depends on what sort of thing we need done.
For one-off tasks, we like to go to Fiverr. It’s particularly good for things like getting a logo designed.
Craiglist pages in the Philippines are obviously great for hiring people from the Philippines specifically.
Indeed is fantastic for hiring American employees. In the past, we’ve used it for hiring writers and customer service reps.
Upwork is another popular hiring site lately. We have used Upwork before, too, but it’s not our favorite.
For one thing, we don’t really like their messaging platform and we also feel that it’s being oversaturated. The layer it creates between you and the employee could be great for one-off tasks, but if you’re looking to form a long-term business relationship with the employee, we’d recommend looking elsewhere.
When to Start Hiring People
Here’s another common question: how long should you wait until you start outsourcing?
We don’t think you should wait that long. In other posts, we’ve said you should look at outsourcing as soon as you make your first sale. Put another way, consider hiring employees ASAP.
In terms of hard numbers, once you’re making a $1000 profit monthly, look at outsourcing instead of just pocketing that profit. This is crucial if you’re interested in keeping your business running long-term as opposed to just cashing out quickly.
After all, $1000 isn’t necessarily a lot of money. It’s not the kind of money you could quit your job on. It’s better spent on hiring someone from the Philippines who can handle basic jobs for you, so you can focus on the high-level things and scale up your business.
Why You Should Outsource
Of course, a huge part of outsourcing is making sure you have the time to dedicate yourself to the tasks at the top of your business. It’s not possible to be doing everything at once, try as you might.
And in case you need another reason to outsource, let’s talk about something called attention residue.
“Attention residue” is a phrase that comes from a book called Deep Work: Rules for Focused Success in a Distracted World, written by Cal Newport. It refers to how difficult it is to get your head back in the game when you’ve been interrupted. There’s a sort of “residue” left over of what you were interrupted by that makes it even harder to focus on what you need to.
Outsourcing will help prevent many of those interruptions, but it’s also critical to define your own duties. We’ve had to split tasks so we both can be as effective as possible.
Nowadays, one of us focuses on the deep work, and the other attends to those regular interruptions. We’re far more productive this way.
If nothing else, this is what you should remember from this post: you are the master of your business, and your time is valuable. You should not be spending it on small tasks like product uploads.
Imagine yourself as the captain of a ship. If all you do is sit there and scrub the deck, too many other jobs crucial to keeping the ship sailing will fall by the wayside.
The captain has a much more important mission: overseeing the crew and the charting the ship’s path.