Operating an online store on major e-commerce marketplaces like Shopee and Lazada is no easy feat. With fierce competition and the need to constantly optimize and improve, many sellers find themselves overwhelmed. This often leads them to seek help from e-commerce service providers to handle day-to-day store operations and growth strategy.
However, not all service providers are created equal. Some may make lofty promises but fail to deliver results. Worse still, you may end up losing money from shoddy or improper practices.
As an e-commerce consultancy with years of experience boosting the performance of online sellers, we've seen our fair share of bad practices that hurt sellers.
To help you avoid getting ripped off when engaging an e-commerce store operation service, here are 5 little-known tips and red flags to look out for:
1. Beware of services charging extremely low fees
When searching for a store operation service, you may come across providers offering unbelievably low fees. For example, just $50 per month for round-the-clock store management services.
Such low prices likely mean the service will be low quality or even fraudulent.
Legitimate service providers need to cover operational costs like staff salary, tools, infrastructure etc. Ethical ones also ensure proper compensation for employees.
Extremely low fees that seem 'too good to be true' usually are. The provider may:
- Employ untrained staff and automate most processes, severely limiting service quality.
- Use black hat techniques like fake reviews and bulk orders to artificially inflate store metrics.
- Neglect your store once you've paid them, leaving you high and dry.
You get what you pay for. Avoid services with extremely low fees. Be prepared to pay fair rates for legitimate, ethical services that will truly drive growth and sales in a sustainable manner.
2. Ask for detailed service proposals, not just vague promises
When evaluating e-commerce service providers, some may wax lyrical about how they will bring you fortune and glory.
But it pays to be skeptical of vague, ambitious promises. Ask for detailed service proposals that outline:
- Exact store management activities they will perform daily, weekly and monthly.
- Tools and technologies used for each activity.
- Metrics tracked to monitor store health.
- Reporting frequency and channels.
This gives you greater insight on their expertise and how they intend to operate your store.
A provider that repeatedly gives vague answers or is unwilling to provide detailed proposals likely does not have the expertise or intention to deliver. Avoid them.
Insist on clarity and transparency from any potential service provider.
3. Review their track record and client testimonials closely
Savvy sellers research a service provider's track record before engaging them.
But sometimes, portfolios and testimonials can be faked or exaggerated. Here are 5 quick checks to validate credentials:
- Look for recognizable brand names as clients, not just anonymous testimonials.
- Verify portfolio metrics like traffic and sales growth against marketplace data.
- Check for reviews on trustworthy third-party sites like Facebook and Google.
- See if they have proven expertise in your industry.
This helps determine if their claims are credible and if they have relevant experience.
Avoid providers who are hesitant to provide verifiable credentials. They likely have something to hide.
4. Ask about their practices to prevent unauthorized changes
Here is an area many sellers overlook when evaluating providers - their practices regarding account access and changes.
You will have to grant a store operation service access to your marketplace seller account. Unethical providers can then:
- Change payment details to siphon your sales.
- Make unauthorized changes like slashing product prices.
- Hold your account 'hostage' by refusing to relinquish access after termination.
This has led to sellers losing thousands from outright theft or revenue losses.
Before engaging a provider, always ask:
- How they limit employee access to only required functions.
- Their protocols for staff changes (e.g access revoke).
- How they monitor and authorize pricing/account changes.
- Their account transition process upon termination.
Go with established providers who have strong controls around account access and changes. Doing so protects your business from potential fraud or abuse.
5. Review compensation model - avoid commissions-only
How a service provider earns its fees also requires scrutiny.
Some providers only charge commissions on sales as their fees. This gives them financial incentive to use any means necessary to hike sales.
While driving sales is positive, providers working purely on commission are more likely to:
- Sacrifice service quality to close more sales.
- Employ questionable techniques like fake reviews and bulk orders.
- Push poorly qualified traffic just to earn commission.
- Oversell products customers don't need just to meet targets.
This leads to short-term gains but long-term issues like poor retention and legal risks.
Opt for providers who charge reasonable fixed fees or retainer models. This better aligns incentives to focus on organic, sustainable growth.
Commissions can still supplement fees but should not be the only compensation model.
Follow These 5 Tips to Find the Right Partner
Engaging an external service provider to operate your e-commerce store is a key step to spur growth and revenue. But finding the right partner is crucial.
Follow these 5 tips to assess providers thoroughly and avoid getting ripped off:
1. Avoid the “too good to be true” trap - Extremely low fees often mean low quality or unethical practices. Focus on fair value.
2. Insist on detailed proposals - Vague promises are empty. Ask for specifics on activities, tools and reporting.
3. Verify credentials rigorously - Check portfolios, testimonials, expertise and references thoroughly.
4. Review account controls - Account access and monitoring protocols are crucial safeguards.
5. Assess compensation models - Commission-only models carry inherent risks of misselling.
By keeping these tips in mind and asking the right questions, you can find an operation partner that will boost your e-commerce store safely, sustainably and profitably.
At Lameco, we take great pride in being that trusted partner for over 500 brands and sellers across Vietnam. Our rigorous protocols and performance-focused models keep our clients secure while our expertise and tools drive their success.
Ready to Grow Your Store Safely?
Operating an e-commerce store is tough. Finding the right partner to power your success shouldn't be.
Speak to our experts today to learn how we can drive sustainable growth and profits for your online business.
Summary: Smart Steps to Avoid E-commerce Partnership Pitfalls
Hiring an external provider to operate your e-commerce store has immense benefits but also risks if you don't choose wisely. Avoid unethical or incompetent partners by:
- Evaluating fees objectively.
- Requiring detailed proposals.
- Checking credentials rigorously.
- Reviewing account controls.
- Assessing compensation models.
Do your due diligence to find a legitimate, experienced partner dedicated to your store's sustainable success. It will save you time, money and headaches in the long run.
At Lameco, our rigorous protocols and performance-based models ensure our clients get the dedicated operational support and expertise needed to thrive on today's hypercompetitive e-commerce marketplaces.
Let's connect today to discuss how Lameco can be your trusted e-commerce growth partner.