Is it profitable to outsource store management: weighing the pros and cons

If you have decided to start a business on Amazon, sooner or later you will realise that you need expert help.

On the one hand, it is not that difficult for an experienced entrepreneur to run a business on the platform. On the other hand, the unshakable “time is money” principle encourages the search for savvy professionals to take on some of the tasks.

Here are the arguments for and against outsourcing, as well as the tasks that are 100% worth delegating.

Accounting is 100% worth delegating

This is one of those tasks that almost every business owner delegates. Outsourcing, hiring an in-house specialist, project cooperation, one-off consultations – the choice is yours.

Moreover, it is more costly to interfere with accounting transactions and reports. Mistakes in this area lead not only to financial penalties, but also to criminal liability.

If you decide to deal with such issues on your own, be prepared to spend at least a week figuring out the nuances. For example, how do you pay taxes on US trading platforms if you are not a resident? How is VAT calculated: on the amount of goods or on the marketplace commission? How to reduce the amount of tax deductions? How to register yourself: Individual entrepreneur or legal entity, etc.

That’s why one of the first things you need to do when you go to Amazon is to find an expert who will handle the reporting and paperwork.

Investing in a good accountant is always a profitable and long-term investment.

Financial operations – 100% should be delegated

As you probably know, you can only withdraw your profits from Amazon if you have a bank account in the US. It is logical that for this purpose, you need to set it up correctly. As a non-US resident, you get an asterisked task.

For business with America and Europe, you may also need a VAT number (a unique identification number assigned to VAT payers).

In general, it is better to coordinate any financial transactions outside your home country with an experienced lawyer in advance. Such a person will help ensure that transactions are clean and fast, find the best way to convert currencies, and generally save you hundreds of dollars in taxes and fees.

Registration of a trademark and/or company – 100% should be delegated

The US patent and registration systems are virtually devoid of the bureaucracy we are so accustomed to. However, even in this matter, you run the risk of “missing out” by sending a document in the wrong format or without the required stamp.

It can take 3-4 months to set up a business on your own, and with professional help, you can reduce this period to a few weeks.

This also includes registering directly on Amazon, as incorrect steps can lead to account blocking.

Analytics – 100% should be delegated

Even if you are already running a successful business on the platform, believe me, the performance could be better. The analyst allows you to look at the process with a fresh perspective and see opportunities that you may not have noticed before.

Is it worth delegating the operational management of a store?

Everyday tasks always take more time than solving global issues. It’s easy to get caught up in them, depriving yourself of resources and time to scale.

Therefore, no matter how trite it may sound, you will not be able to run a store effectively alone. In any case, you will face the need to hire a manager, marketer, logistician, or other assistant. At least one of them. At the most (with large volumes of tasks), you will have to rent an office and staff it.

Of course, you can outsource the task to specialists, which is cheaper than outsourcing from a trusted company, but it also involves huge risks.

A small list of everyday tasks that you are unlikely to want to do on your own:

  • adding products to Amazon;
  • filling out product cards;
  • contacts with suppliers: agreeing on details, making adjustments – it takes a lot of time, even though it seems like an easy task;
  • management of inventory;
  • promotion within the platform: setting up Amazon SEO and PPC;
  • revaluation of goods according to analytical reports.

And this is just a short list. Therefore, outsourcing the operating system will be a wise decision that will not only save precious time but also increase capital by choosing the optimal business strategy.

Why you should NOT outsource your business

First: the perceived loss of participation in the business. Some owners are afraid to hand over the business because “no one can do it better than me”. Others worry that they will not be as involved in the process and will lose sight of some important details. Both thoughts are valid, but they are not the actual problem. Outsourcing doesn’t take away your control and involvement, you decide what range and scope of tasks will help you move forward more efficiently.

The second factor is money. Of course, services are not free, and the services of an experienced expert are even more so.

However, this issue is levelled out if you look at it from the perspective of future benefits. By reducing the number of routine tasks, you open up new horizons: you scale up faster, find time to search for more profitable suppliers and goods, to test, and to come up with creative solutions that increase turnover.

If you would like to set up a turnkey business on Amazon or need advice on financial, accounting or other matters, please contact us using the form below.

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