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Outsourcing and Creating Your Profitable Online Business

May 11, 2010 by  
Filed under internet marketing

3 Comments

This week  a very prominent Internet Marketer has  launched a product based on the business model of outsourcing all the work for $2.00 per hour and this has caused quite an uproar among the virtual community  here in North America.

Here is why, obviously you cannot get quality workers anywhere in North America to work for anything close to that.

At first I just laughed it off thinking who could possibly believe that but when I read a Blog Post by Erin Blaskie about it I realized I had to put my 2 cents in as well. Like her, I hate for people just starting out online to be misled.

I am sure if they were to think it through they would realize that you can’t get something for nothing or even almost nothing but many people who are just starting online right now are desperately looking for a way to make a living due to the recent upheaval in our economy.

First let me say I am not opposed to outsourcing.

I coach my clients all the time to outsource any and all jobs they are not good at or don’t have time for so they can get on with what they do best. I have found a wonderful graphic designer based in South America and she makes quite a bit more than $2.00 per hour!

Second I love the fact that the global economy and the Internet allows people in developing countries the opportunities to provide for themselves and their families in ways that were never before possible. To many of them $2.00 is a Godsend and I am thrilled they can now make those wages and better their living conditions.

But here is the rub; his recommendation is to outsource everything to $2.00/hour workers in third world countries so here is the problem with his plan.

It is misleading and unrealistic! It is just ridiculous to think that everything you need to create a successful and profitable online business can be outsourced for $2.00 per hour. Will it work for some of the tasks? Yes, but for many things it is just not possible.

Here is why…

  1. The language barrier – English is the second language for all of these workers and while they know it well enough to pass a test for English they do not understand our nuances and idioms and that makes communication about concepts difficult and tedious.
  2. Time Zone differences – Many of these workers are on the other side of the globe so when you are working they are sleeping. This makes most jobs take longer.
  3. Reliability problems – Because you will be hiring the lowest paid workers in a culture they often take on more work than they can handle (for all the right reasons for them) so your jobs will take longer.
  4. Consistency – If you hire a company that then provides a team of workers it is very difficult to get the same person twice if you find someone you like. That’s just not how they work. You get whoever is free when you need the job done so one time you may have someone who is great and the next time someone who is not so good.
  5. Cultural differences – People from other cultures do not have a clue what goes on in the head of people in the western world (how could they?)So to think you could hire someone for $2.00 per hour to do anything related to copywriting or marketing is just ludicrous.

So how does it work for him? He has the money to go to a third world country and to meet the people he hires in person so he can develop a relationship with them first.  Then he sets up an office and hires a manager for his projects and then he recommends hiring people for a month at a time so then he may get the work done for an average of 2.00 per hour. But do people just starting out have that luxury? I doubt it!

People starting out online need to find the right person for each of their outsourcing jobs no matter where they live and they need to be prepared to pay a reasonable amount of money to get the job done right the first time. Sometimes paying more to get something done correctly and quickly is actually cheaper in the long run.

I will leave you with this because it just happened to me.

I just purchased a new Macbook Pro and the only reason I did it is because of support issues on my Dell. I purchased their extra support package but whenever I had a problem it took me forever on the phone. Their support center is based in India and when I called we had a terrible time understanding each other. Plus the problem went on for quite a while and every time I called I had to talk to a different person. I had to start at the beginning each time and no one told me the same thing twice.

The Apple support is based in the US so this will not be an issue in the future. Did I pay more for an Apple product? Yes I did but it was worth it to get the support I needed and in the long run it will most likely cost me less because my support issues will take less time.

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  • http://www.alternativeofficeassistance.com Diane Coville

    Great post Lauren. And so true. I have had prospective clients approach me who went the “thrifty” route and ended up very dissatisfied with the end result and forced to pay yet another person to re-do. OR, they had to spend an unexpected huge block of their time in communications back and forth to clarify their needs and expectations. And I heard one story, where the VA provided a less than satisfactory finished product and were unreachable thereafter to fix the problems that were found. When you factor in the cost of money and time, the $2.00 per hour outsourced work may actually cost a lot more.

  • http://timefinder4you.com admin1

    In the end you really do get what you pay for….

  • http://www.OutsourceToolbox.com Michael

    Yes Lauren, $2.00 an hour can buy you a ticket into the frustrating and potentially rewarding world of hiring and managing people.

    Business success rarely happens without expanding beyond the realms of a one-man-band operation. Although this is less true of online businesses than offline, the leverage in time and effort that is afforded by even one full time staff member or contractor can be immense.

    Will you make some bad virtual hires?

    Quite likely.

    Are there good people out there at low hourly rates?

    Absolutely.

    To follow on from Diane’s earlier post: I recently had an out-tasked worker whose programming updates on a live site caused an error that prevented members profile photos from being displayed. He claimed no responsibility for the fault, but I had to have this key site functionality restored ASAP.

    I fixed the problem with another out-tasked programmer in less than an hour: a perfect example of both the good and not so good you too may find when hiring virtual staff.

    Is this really so different from hiring in the offline world?

    The time zone difference can actually be beneficial. Providing you have good communications or a simple project management system in place, your VA(s) can be working productively while you are asleep. Most people start their day to a full in-tray, but imagine waking to a full OUT tray instead.

    Outsourcing is a business skill, and like any new skill it can be learned from your own mistakes and those of others.

    Do not underestimate the skills and qualifications of those willing to work for just $2, $3 or $4 an hour. Learn to manage this resource and your business will benefit and grow quicker than you alone could ever achieve.

    Michael