The use of international labour for online retail

Nathan Huppatz

1st Jul 2009

Running an online business more often than not involves trying to automate and save costs. The online world is generally a very competitive one so any edge you can get is a good one. When a business is shipping 10 orders a day, making an extra $1 per order in profit starts to add up!

Usually, your largest cost as a business is staff, or staff time. When calculated per hour of effort, staff are expensive. In Australia and other developed countries, taking on a new staff member is a big decision as the cost is high and that staff member will really have to assist in growing the business or at the very least, perform well enough to save time and effort for you, so you can focus on growing your business.

International labour has been used for many years now for telesales, IT support, and general customer support for many industries. And this is becoming prevalent in online retail businesses worldwide too. Some of Australia’s largest and highest profile retailers use some international services and labour.

So, what about your own online business?

Well there are lots of opportunities for you to save costs by employing some foreign labour to assist you. Perhaps you need some marketing work done (like link building or SEM work like Adwords). Perhaps some IT support or website development. Or maybe even someone to answer all of your customer emails. You don’t have to be a multinational to take advantage of some cheap labour overseas.

India has many businesses servicing online sellers. One that contacted me recently offers services such as product entry into my store catalogs, image processing, customer support ticket handling and much more. Hourly rates can work out as little as $4.50 per hour, or maybe less depending on who you find to do the work.

The Phillipines also offer some good opportunities if you are looking to outsource offshore. One of my consulting clients the other day told me of 2 hires he had made by advertising positions on a local jobs site (www.bestjobs.ph) and found a full time internet marketing manager for $1000 pm, as well as a customer service officer answering all of his customer emails for about half that amount. Initially I was a little skeptical, but their resumes showed true experience and tertiary education, and the work examples I saw from the internet marketing manager looked quite solid.

Managing any staff can raise stress levels, so what about international staff? You may have to deal with time delay issues, and I would make sure that you were quite specific in what your expectations were from them so they can then report on their progress. Language could be an issue, and also security. What logins would you need to provide them? Do you make sure to vet all of their work? Or trust them to act on your behalf and post responses in forums for you? You need to make sure your own brand quality is maintained, and the staff member is performing well. Of course, this sort of management overhead reduces the cost efficiency somewhat and there is always the risk that you will have to trial a number of potentials before you find someone that you are happy with.

Then of course there is the ethical issue. Some would argue that we should be supporting the local economy and hiring locally, whilst others among us like the idea of being able to get an edge by hiring staff in different regions to save cost..