eCommerce Outsourcing vs. In-House Development: Full Guide [2020]

eCommerce outsourcing is a very popular practice among businesses.

Today, companies outsource almost anything. eCommerce businesses can outsource a lot of processes from order processing to taxes and customer support. In this article, we are going to talk about the benefits of outsourcing web development.

Since development has a very huge influence on business, finding the right technology vendor is the priority task. The choice of a wrong partner can become a very expensive problem that will lead to costly re-doings or whole eCommerce website redevelopment.

In this article, we will to cover the main topic and help you make the right choice:

  • 10 reasons for eCommerce outsourcing
  • how to outsource eCommerce website development
  • key locations for outsourcing web development

Let’s discover why eCommerce outsourcing benefits companies of all sizes.

10 Benefits of Outsourcing eCommerce

Many companies decide to outsource the development of their online stores thanks to a number of advantages of eCommerce outsourcing.

Here is what companies that outsource eCommerce website development tell about the reasons that pushed them for such a decision.

Main Reasons for eCommerce Outsourcing

As you can see from the graph above, eCommerce outsourcing allows companies to save money, reach top experts, avoid unnecessary hurdles with hiring and circumvent a number of other difficulties.

Let’s take a closer look at the main 10 reasons to outsource web development.

  1. Cost savings

The main benefit of eCommerce outsourcing is the promised savings of the development budget. Hiring your own team is always more expensive than working with a freelancer or an eCommerce development company.

eCommerce development outsourcing can save from 20% to 70%. The final cost depends on the location to which you outsource. For example, the payment for web development in the USA is around $100-150 per hour. The hourly rate for the same services in Europe can range from $50 to $70.

If you decide to hire your own in-house team, you will need to pay the annual salary of around $76,000 plus taxes and other legal payments.

  1. Better business focus

Working with an in-house development team requires a lot of management and involvement. When you find a reliable eCommerce outsourcing company and have every detail discussed and settled, all you need to do is to provide feedback and your approval.

The free time that you will get thanks to the development vendor, you can dedicate to core business tasks, like finding new ways to promote your eCommerce business, boost sales, find new partners, and concentrate on building a strong and loyal customer base.

At GoMage, we take on all development tasks, manage your development team, and solve any problems that arise during the development phase. Our clients don’t need to control every step to ensure that development will go without a hitch.

  1. Access to top experts

Some projects require the involvement of expertise that might be hard to come across at your location. eCommerce outsourcing allows hiring even the rarest specialists at a lower cost. Moreover, you don’t need to waste time trying to find that expert yourself.

For example, our company works only with professionals who can boast a senior level of knowledge who are skilled in Magento development.

  1. Broader skill set

Outsourcing web development, you can get access to different professionals. Even if you need an expert for a task that takes only a few hours to accomplish, your technology partner will provide you with the needed skill set. Thus, you don’t have to spend a lot of time trying to find a reliable professional each time you need to tackle some problems.

Often, our clients come to us assured of what's wrong with the website but once the skilled team analyzes the concern, the real problem may be hidden in a totally different issue.

Therefore, outsourcing eCommerce web development, you can be assured that even the slightest bugs will be successfully hunted down and fixed.

  1. Fast and seamless development process

If you decide to hire an in-house development team, it will automatically postpone the launch of your project indefinitely. Before you start the development, you need to organize HR operations, find and onboard professionals, think through the strategy of business bonuses, vacations, deal with taxes, and so on.

The process is time and cost consuming, as compared to outsource web development, which allows to speed up all the processes. You only need to find a vendor and it will provide you with the necessary specialists or will take care of the hiring process. In most cases, outsourcing companies have a standard team structure consisting of a project manager, system architects, developers, designers, and QA engineers and set processes, which helps to launch a new solution to the market in record time.

  1. High scalability

Adding more manpower to your project might become a huge problem with your on-site team. Outsourcing companies have a lot of experience in fast development team scaling. They have access to a huge pool of talents and can quickly add a few team members who’ll be working on your project, even if you need to scale your team for a few months. Otherwise, you will need to take care of finding, hiring, and onboarding developers yourself.

For example, our company has access to a huge pool of professionals and can scale a team from 5 to 20 developers with no problems.

  1. Business support

Aside from development services, some companies provide clients with other services, like market research, competitor analysis, investigation of available solutions, and so on. Thus, you can hire a single company to perform a few tasks, creating a comprehensive approach to eCommerce web development.

GoMage provides clients with the following services:

  • Magento website audit to identify even the slightest problems
  • UX/UI design for creating user-friendly eCommerce solutions
  • Magento development and support
  • Magento and server optimization for highest performance

Thus, we provide clients with all the services that allow them to build an eCommerce website from idea to a full-fledged project without changing companies.

Do you want to know how to create a Magento website?
Check a detailed guide prepared by our team explaining the main steps, possible technical solutions, timeline, and cost. Discover more details inside the article: How to Build a Magento Website: Technical Side, Business Recommendations & Cost Estimation

  1. Security

dMany companies are concerned with the security of eCommerce outsourcing. Today, you can sign a Non-Disclosure Agreement with your vendor to project your project and unique ideas. The use of privately hosted security repositories by Gitlab and secure hosting ensure even a higher level of security.

When outsourcing eCommerce, you can be assured that your business and ideas are fully protected by law.

To sum up everything said above, take a look at the following table comparing the benefits of working with in house versus outsourcing versus freelancer developers.

In-house team Freelancer Outsourcing company
Cost efficiency - + +
Quality + - +
Project timeline + +/- +
Team management + - +
Project scalability + - +
Security + - +
Trustworthiness + +/- +
Risk mitigation + - +
Wide talent pool +/- +/- +

GoMage team has been providing Magento development services for over 10 years now. We deliver robust eCommerce websites to companies operating all over the world and guarantee a high level of provided services.

Take a look at the image below illustrating what our clients think about working with us.

Feedback of GoMage's Clients on Clutch

How to Outsource Web Development

Now that you know the main benefits of eCommerce outsourcing and why big companies entrust outsourcing vendors with eCommerce website development, let’s move to the process of successful outsourcing. The following guide will help you avoid costly mistakes and make your experience with a vendor smooth and fruitful.

Take a quick look at the graphic below demonstrating the process of hiring an outsourcing development company.

 Key Steps of eCommerce Outsourcing

  1. Decide on the project type

The first stage of eCommerce outsourcing is choosing the type of your project. When it comes to Magento website development, you can develop a small, medium or large store, or even a multi-vendor marketplace. Therefore, before you get in touch with a Magento development company, you need to have a decision regarding your eCommerce website:

  • Decide on the project type you want to develop (e.g. an eCommerce store or marketplace)
  • Create a list of requirements for your project
  • Work on the budget that you are ready to spend
  • Prepare some question for the screening process for Magento development vendors

If you are interested in knowing how to develop a multi vendor Magento marketplace, how much the project might cost, and which features to include, check an extensive guide prepared by our team: Magento Multi Vendor Marketplace: How-to Guide for eCommerce Businesses

  1. Choose Magento Version

Magento is distributed in three versions:

  • Magento Open Source – free version of the platform designed for small to big companies
  • Magento Commerce – paid version for big and enterprise eCommerce businesses
  • Magento Commerce Cloud – paid version with provided hosting

The main difference between the last two versions is the provided hosting. If you don’t need one, you can go with Magento Commerce. The two paid versions are better used by companies that work in the B2B segment, as they provide the needed features out of the box.

Still, many companies opt to use Magento Open Source, as it provides almost the same features You can easily add the needed functionality it lacks by installing modules. The free version allows you to save money and pay the development costs only. The price for Magento Commerce and Commerce Cloud starts at $22,000 and $40,000 per year accordingly.

Want to know which features the free version of Magento offers?
Our team prepared an extensive article Magento 2 Features: Open Source Edition listing all the features. Check it out to learn what you can get with Magento Open Source for free.

  1. Clarify Project Requirements

After you know which version of Magento you are going to use, it’s time to decide on the features you want your website to have. Make a list of all the features that you want to include, as it will help you with the further search for a development vendor:

  • Decide on the features list
  • Identify which unique features you are going to implement
  • Decide how many pages your store will have
  • Finalize your requirements and move to the next stage
  1. Find Magento Development Outsourcing Vendor

After you have decided on the type of project you are going to develop, it’s time to move to the next step and find a reliable development vendor.

The best place to look for companies for eCommerce outsourcing is such platforms as Clutch.co, the Manifest, GoodFirms, ITFirms, etc. Such platforms only list top development companies and provide you with all the necessary information:

  • Company specialization
  • Years of experience
  • Customer reviews
  • Hourly rate
  • Portfolio

As you interview potential vendors, try to ask as many project-related questions as possible. During negotiations, you will be able to assess the level of their English, evaluate cultural differences, possible communication difficulties, etc.

Do you want to know more about the process of finding Magento developers?
Check the article we’ve prepared Hire Magento Developer: Main Mistakes, Key Considerations & Step-by-Step Guide explaining how to find a proper development company, places where to look for them, and how to identify a reliable vendor.

Don’t choose the first company that provides you with all the answers that you want to heat. Make sure to interview a few companies before you make a decision. You need to make a balanced decision based on the number of factors.

An experienced company specialized in Magento website development will ask you a lot of questions related to your project. Before you sign an agreement, finalize all the issues relating to communication, project management, payments, data protection, etc. Start your cooperation with signing a contract and an NDA (Non-Disclosure Agreement).

  1. Organize Robust Project Management

eCommerce outsourcing entails the delegation of tasks to specialists who are not in the same location as you. Thus, you need to create efficient communication before you start working on your project. Today, there are a lot of tools that can help you achieve fast communication with your remote development team:

  • Slack for project discussions
  • Jira and YouTrack for tasks management
  • GitHub and GitLab for secure source code management
  • Google Docs and Dropbox for files exchange and management
  • Zeplin and Figma for eCommerce design checks

Usually, in highly professional eCommerce outsourcing companies, the Project Manager is responsible for the control of all the works of your project. This person will become an intermediate between you and developers working on the website. You should ask questions and often share feedback to be on the same pages regarding all tasks performed by the remote team.

Key Locations to Outsource Web Development

The final cost of eCommerce outsourcing directly depends on the vendor you decide to work with. Today, you have a few options for outsourcing web development:

  • Onshore development outsourcing means working in a company located in the same country as you. For example, if your company operates in the USA, you would choose a vendor from the same country. Onshore outsourcing is not always the best idea since the development services in the USA and the UK start at $150/hour.
  • Nearshore eCommerce outsourcing means outsourcing eCommerce Website Development to a nearby company. The time difference for such two countries should not surpass 2-4 hours.
  • Offshore eCommerce web development means that you can choose a company from any place in the world. The time differences should be more than 4 time zones. Many companies choose this model of outsourcing web development thanks to the price and quality ratio.

Today, Europe is a popular eCommerce outsourcing destination for many companies looking for development services. High demand is explained by the availability of a wide talent pool, experienced developers, and low development rates.

The only problem that might occur is the time difference. However, if you are working with a company from Europe, you can turn it into your main benefit. During the night in your region, your team will be working hard on your project and present the result the next early morning, so that you could plan further.

Locations and Rates for eCommerce Outsourcing

The below image demonstrates the differences in Magento website development prices depending on the region of outsourcing.

Among the regions illustrated above, Europe stands out thanks to a number of factors:

  • Huge number of highly professional experts
  • Comfortable time difference
  • High quality of web development services
  • High level of English knowledge
  • Modern team composition
  • Ease of communication
  • Quality and cost ratio

eCommerce Outsourcing: Final Notes

eCommerce outsourcing is the proffered option of Magento development for many small, medium, big, and even huge companies like Samsung.

With modern technological advancements, you can hire a company in any region of the world. Why limit yourself to one location if you can search for web development companies worldwide?

To sum up, let’s see how to avoid some costly mistakes and choose the best development company:

  1. Deeside on the project type and prepare a short project description
  2. Make research and identify the best eCommerce outsourcing vendors
  3. Interview the vendors you find during your investigation
  4. Collect and analyze the data you get
  5. Select a Magento development company with the best price and quality ratio
  6. Set up communication processes and tasks management
  7. Start the eCommerce website development process
  8. Launch your solution
  9. Plan for further improvements
  10. Reap the benefits of successful eCommerce development outsourcing


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