Six Tips for Getting Started with Managed Services for Ecommerce

Ecommerce is changing.

With the impact of COVID-19 shutting stores and forcing people to look online for necessities and entertainment, ecommerce has seen rapid growth. Consumers that would look at their local store first have come to realize the convenience, security, and power of online retailers.

Risk Factors for Ecommerce

That opportunity also comes with risk, as many online retailers and ecommerce businesses are discovering. Increased demand is increasing supply chain pressure for critical supplies and goods. Operations are dealing with new regulations and operational changes as employees mitigate the risk of the coronavirus in warehouses and on shipping lines while moving product at a faster pace.

With so many new customers using ecommerce, a poor customer experience leads to not only a lost sale, but also a future customer. Poor operational execution or a delayed shipment can drive that customer and all their business to a competitor. Your business is not the only one seeing increased demand, and competitors are doing everything they can to capture and hold sales.

To compete and grow, online retailers need to embrace change. They need to find and leverage new tools for a competitive advantage. Overcoming challenges is the key to success, and managed services can help.

What Are Managed Services?

With managed services, a business (like an online retailer) will outsource a service or process to an outside resource known as a Managed Services Provider (MSP). The MSP provides the resources and expertise for the service, working like an extension of the business.

Most businesses are familiar with Information Technology (IT) managed services. A company will hire an IT provider to implement, maintain and manage the technology the business uses. The provider will make sure the technology in use at the company meets a determined run state.

This provides tremendous benefits for the business. Maintaining IT resources can be expensive. Technology is complex, which means that maintaining a deep IT department can be costly with little benefit. Paying a flat fee to maintain a run state, guarantee uptime or meet goals for business technology can reduce costs while ensuring technology operate as needed. For the MSP, resources and best practices can be shared among their customers keeping operating costs low.

It’s a win for everyone involved.

Managed Services for Ecommerce

Even though IT managed services are common, with many businesses currently outsourcing IT services to an MSP, there are other business areas that can benefit from managed services. This is especially true for ecommerce businesses feeling pressure to adapt in a highly competitive market.

Keep in mind, there are a variety of ecommerce businesses – everything from an international distributor to a small business shipping goods from a garage. Not every business will have the same requirements for an MSP. You’ll need to do an initial analysis before reaching out to an MSP.

Here are some points to consider as you evaluate managed services for your ecommerce business.

1.      Identify the Opportunity

Before reaching out to a provider, you should do an initial analysis. It’s a good idea to map out your business processes and process workflows to identify the areas creating inefficiency.

For example, it may be your business is paying too much for critical supplies, or you are forced to keep too much inventory which increases costs. An MSP can evaluate your needs to reduce inventory without risking shipments. They can find the data you may not be using to create an informed strategy. Marketing is another area that often represents a prime opportunity to leverage managed services to grow your business.

Once you’ve identified the opportunity, look at setting goals.

2.      Evaluate the Costs

Often, businesses don’t have a clear view of business costs, which can be a serious problem when evaluating opportunities for managed services.

Expenses are wrongly attributed to one area of the business. Additional costs are lumped into business overhead. This can lead managers and owners to making business decisions based on faulty information. Profits are lost and as the business grows, the problems escalate.

Managed services focus on leveraging a better understanding of costs to drive improvements. For many providers, this is the core value they provide their customers. With an MSP, the ecommerce business has better visibility into expenses, with the provider helping to reduce unnecessary and out-of-control costs. The online retailer can improve customer service and reduce expenses.

3.      Review and Use the Data

Are you collecting and using data in operations and marketing? Data is critical to informed decision making and process improvement. As a business, you are constantly generating data. Unfortunately, many companies have no way of collecting or using this data. Without it, you are supporting your business with guesswork.

A managed services provider relies on data to deliver a service. Data drives the value they provide business leaders. With the right data, they can identify opportunities for not only process improvement, but also how you can drive sustainable business growth.

4.      Managed Services for Critical Supplies

Supporting and managing inventory of critical supplies is one area that many ecommerce businesses see an early benefit from an MSP. Most employees don’t have the market knowledge or connections to find additional suppliers, putting shipping at risk and increasing costs. Relying on fewer suppliers can leave the business a single disaster away from a line shutdown due to missing supplies.

Because of the combined purchasing power of an MSP, your business through the provider has better insight into the market and can often find a lower price for supplies. Working with more suppliers, they can drive higher quality at a lower cost. This can also provide your company protection while reducing inventory on-hand. You get industry-best supply chain connections and a partner focused on keeping your lines moving.

5.      Managed Services for Marketing

Most of us don’t think of managed services for marketing, but it represents one of the biggest opportunities for online retailers.

Many ecommerce businesses struggle with marketing. Digital and online marketing is constantly changing and staying a step ahead of change is a full-time job. A single employee, or even a small department, can’t be expected to provide the resources and expertise necessary to maximize marketing along every channel. This lack of resources and expertise limits business growth and opportunity, leaving the retailer to target one vertical, one market, or one channel. The company sees just enough results to fool themselves into believing they are marketing enough, constantly losing profit and sales.

With an MSP providing support for your marketing efforts, you can look at targeting new customers, new verticals and even new markets. Instead of buying a single job or service with the provider, you work with them to meet your business goals. The MSP provides the flexible resources and expertise to fill the gaps so your marketing team can deliver on larger and more ambitious projects.

6.      Managed Services for Technology

Today, we know the business success is often dependent on technology. With the right technology your business can grow. Even if the business recognizes the importance of technology, many online retailers will wait to implement a new system or technology. With few available resources, any change will mean pulling employees away from ongoing projects which only adds to the risk

An MSP can be your trusted expert when it comes to ecommerce technology. They can provide not only the expertise in selecting a new ecommerce platform or an app or point solution, but also the resources to customize and roll out the system for your team. The company can stay ahead of the curve when it comes to technology, while reducing the risk and cost of implementing new software. Rather than fighting against change, you are using it to boost business.

Getting Started with Managed Services

With so much variety when it comes to ecommerce businesses, it’s difficult to build a single checklist for every company. There’s not a single “right” answer that works for everyone, and no solution will deliver the same benefits to every online retailer.

That said, ecommerce businesses need to recognize that change is happening whether they are ready for it or not. Competition is fiercer than ever before, and customer expectations have never been higher. There is revenue to be made, especially with so many new customers flooding the online markets, but your company needs to be ready to find them. You need to deliver a fantastic, seamless customer experience.

Managed services can help. With the need to keep overhead low while providing world-class service and support, an MSP can be the edge you need in a competitive market.

If you’d like to learn more, or want to talk about your ecommerce business needs, then contact GO2 Partners today to see how we are helping companies like yours find success.