Advantages and disadvantages of e-commerce delegation
In this article, we will talk about e-commerce delegation. A practice that is becoming more and more popular these days. Many companies offer this service. However, what are the advantages and disadvantages of delegating your e-commerce?
The first step is to define what “e-commerce delegation” is.
E-commerce delegation is a transfer of responsibility for a brand’s e-commerce website to a service provider. In other words, a brand subcontracts the entire management of its online shop to a service provider. It is therefore the service provider who takes charge of the creation and also the costs related to the online shop. In a way, it assumes the client’s risk.
You will find a more complete definition in this article.
The advantages of e-commerce delegation for a brand are relatively numerous:
- Turnkey service: the service provider will provide an online shop. As well as a complete service of follow-up, management and customer acquisition.
- Low investment: for the brand, there is no investment since the mission is entrusted to a service provider. Who will take care of the development of the website.
- Variable cost: e-commerce delegation is therefore a way of making costs variable. As the brand will only pay a percentage of sales.
- Better rotation: it is a way for the brand to sell more while limiting the risks.
- No after-sales service management: after-sales service is also (normally) managed by the service provider.
- Speed of execution: as the provider reduces the decision process and is used to creating customer sites. The execution time is normally relatively short.
You will find even more advantages of e-commerce delegation in this article: 10 advantages of e-commerce delegation.
And the disadvantages are as numerous as the advantages:
- A low margin: in the end, the cost of the service nibbles away at the margin. Especially if the volume of sales is not there. As the service provider has to make his investment profitable.
- Control: as the brand is only a principal, there may be abuses. Because the entire production chain is not controlled by the brand.
- The brand’s investment in its image: as the heart of the strategy and the e-commerce site are subcontracted. The brand shows only limited interest in investing in the web as it sees fit.
- Scalability: the shop is made by a service provider and will not necessarily respond to the changes. That the brand wishes to make to its brand image or to costly functionalities
- Logistics: this is not a problem specific to e-commerce delegation. But it is essential that the brand be able to deliver its products individually, otherwise online sales are not possible
In the end, an “e-commerce delegate” is a kind of sales agent. Some are good and make the brand a priority and others are not…
That is why these disadvantages are only valid for the most part if the service provider is not trusted.
It is important in e-commerce delegation to establish a relationship of trust with the service provider. A reliable partner who will be able to guide you and present things in a transparent manner. We are a team of digital experts who have made it their mission to ensure your success. No hidden costs. We tell each other everything.
In the end, the e-commerce delegation is a solution that is possible to start in e-commerce. But it can be a less good solution in the medium and long term. Because a brand must give itself the means to exist and differentiate itself on the web.
This is why it is essential to choose your service provider carefully. The success of your website and your brand depends on it.
We would be delighted to discuss this with you. So don’t be shy and contact us. Or leave a comment.
If you are interested in e-commerce delegation, you will find all the articles talking about it in this category.