PPC Management
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My Business…Outsourced
Joey Pomerenke is a pet industry professional and a young internet entrepreneur. He is a member of the YoungGoGetter.com Board of Advisors and founder of PetEcommerce.com, an all-in-one e-commerce solution for pet industry professionals.
While studying business management and entrepreneurial studies at Iowa State University I knew that being an Internet entrepreneur was the only professional route for me. There was only one problem – I did not know a damn thing about web development, or programming, nor did I have the time to learn. I knew there was only one thing I could do if I wanted to succeed as an Internet entrepreneur. Outsource everything!
So in 2004, JP eTail Group LLC, a network of pet supply online stores, was formed and my outsourcing journey began. Outsourcing became the only profitable way for me to run an e-commerce business by myself that was doing 100+ orders a day. Below is some, but not all, of the major business development and day-to-day operations that I outsourced to have a smooth running e-commerce business.
Website Design and Development: I did not know anything about web development, design or shopping cart solutions. I needed someone that could develop “cheap”? high quality e-commerce sites and with ongoing support. We ended up selecting a Malaysian design firm that only charged us $250 per e-commerce store designed. Their design work was some of the best I had seen and their support was even better.
Product Fulfillment: I did not have the operating capital or warehouse space to even think about shipping our own products. I ended up negotiating a relationship with one of the largest pet products distributors in the country to do our fulfillment for us. I also negotiated a discount from wholesale, so we were able to compete with our large competitors. We were now set up to ship over 20,000 different pet supplies!
Product Copy Data Entry: We had over 20,000 products we needed entered into our online stores and I just did not have the time to do that while going to college full time. It would have taken me months to do, not to mention really ruin my social life. So about a week later and 5 cents an entry my new friends at an Indian data entry firm had it done. So instead of me sitting on my computer for hundreds of hours and taking up all my free time I paid roughly $1,000 to have it done. My time alone saved was worth 10 times the amount paid. This by far was one of the best-outsourced investments I made, and I understood from here on out why so much data entry jobs go over to India.
Customer Service: As the company grew I needed to have customer service reps available 24/7 to answer customer’s questions. I was to busy with school to be answering phones and e-mails all day long. I did not want to invest in an office and call center infrastructure, so outsourcing seemed like the best option. I used a large outsourced call center in Canada that was available to my customers 24/7 and 365 days a year. It turned out to be more affordable then I would have ever imagined
An investment company acquired JP eTail Group’s web properties a few months ago. This has giving me the operating capital and free time to start my new project and my new outsourcing journey – PetEcommerce.com. We used Elance to find a great software development firm in India to work on the project. Kevin Rose, the founder of Digg, used Elance to build the popular social media website, so we think we can too! I am looking forward to seeing where this new outsourcing journey takes me.
The moral of the story is - What is your time worth? $20/hr? $50/hr? $100/hr? Could you be making more money with that hour you just spent doing something you could of outsourced to someone else for cheaper?
I know many people that have had horror stories with outsourcing, but fortunately I have always had great luck with it.
What have your experiences been with outsourcing?
10 Comments
Dan Schawbel said on January 30, 2008
This reminds me of the 4 hour work week. If you have money you can do less, be more productive and enjoy life.
Dave said on January 30, 2008
Great article, thanks for sharing. Are your Malaysian contacts still around? Did you find all of these outsourcing companies through eLance?
Justin Nowak said on January 30, 2008
I think I will be looking to outsource some work soon, might have to ask for you recommendation Joey.
Seems like the smart way to go.
Great Article!
Joey Pomerenke said on January 30, 2008
@ Dan - I read that book recently and it did remind me of myself. He talks about having a personal assistant to do certain tedious things. I hired my sister for that :)
@ Dave - This is my first experience with Elance. We choose them because it is such a large project and we were quoted some really high prices from programmers in the states. The rest of our outsourced contacts were acquired through contacts or Google search. Just shoot me an e-mail and i can put you in contact with the people you need.
Ketan said on January 31, 2008
Any chance of telling us the malaysian firm who designed your website? I’ve been looking for someone to create a website and this company sounds really good.
Great article BTW
Joey Pomerenke said on January 31, 2008
If you guys would like to know any of the outsourced sources we used in the operations of JP eTail Group LLC, just shoot me any e-mail to joey (at) JPeTailGroup.com.
michael brito said on February 1, 2008
you hit it right on the nail. i started freelancing a couple months ago, originally i was doing everything. i hated it. so one day while browsing some freelance job boards i had the idea of outsourcing almost all of my work. i now work about 5-10 hours a week and am making 3 times the money i was making before.
i’m definately no millionaire, but i have a lot of one extremely valuable resource, time.
PEACE!
Poo said on February 9, 2008
Hey Joey,
I’ve just been looking through your blog and realized we have similar back-grounds (business school) and similar future goals.
You mention that you use elance, but I’ve heard they can be quite expensive compared to some of the others.
Would you say there’s a big difference in the quality of work you done?
Thanks,
Poo
Richard McLaughlin said on February 10, 2008
2 names for you. Tm Ferris and James Brausch.
Tim wrote the 4 hour work week and strongly pushes the idea of outsourng as much of your life as you can. Having read the book I actually took over some of the work for my partner; she outsourced part of her life to me because I am unemployed. She is more productive and I can help when i am not in the active job search.
James wrote a post about Elance, and I would advise people to read it before outsourcing the critical parts of your job. He had a process block and fail because the outsource partner followed their process, and the process said stop. Here is the post: http://www.jamesbrausch.org/elance-doesnt-work/
Don’t take hipost as me saying things bad about elance, but as a comment on having a backupplan in place.
Joey Pomerenke said on February 11, 2008
@ Poo - Glad to see other people like me out there! : ) I have not personally had a bad experience with eLance and the quality. I think the reason is i have always taken the highest bid compared to the lowest as human nature would lead you to do. The company doing the highest bid is always a reputable company with a track record of great work. This shows in their feedback on eLance. Always remember, you get what you pay for.
@ Richard - I have not yet outsourced any critical parts for operations to any company i have not done a lot of research on and know they are legit and here to stay. The majority of my outsourcing is project based, and doesn’t deal with operations. But, James is right - You always need a back-up. This should be obvious however - Even if you are not outsourcing. You always need a back-up plan in business.
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