Staffing your Ecommerce Store: Agency or Direct Hires

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Something had to be done. We were bumping against our capacity to sell and service our customers. I had plans to bring more products online, but we couldn’t get our head above water with just me and a single sales/customer service VA. I needed to grow the team, but there was something I had to address first. Do I keep the agency I’m currently using to staff my store, or do I start hiring directly?

Why I Started With an Agency

I had hired someone directly in the past, and it had worked for a while. He was smart and capable. He learned about my products and business very quickly and didn’t need much help. He was with me for about 9 months. Then he ripped off a customer for about $5,000 (I’ll tell that story sometime), and I had to eat the cost to make the customer whole.

It was devastating. Not only was the pure cost a big hit, but I had trained this person and now I had to start all over again with the busiest part of my year coming up. To make matters worse, I might have had Covid and didn’t know it at the time. It was before patient zero had been identified in my state in early 2020, so we weren’t yet looking for it.

I remember reading the confession of my VA as I lay in bed (yes, he confessed!), feeling sick and miserable. I had to call my customer, tell him what happened, and face his wrath until we could work out the solution. All the time my body was aching, and I couldn’t smell or taste.

What did I do to quickly replace my VA? I got my wife to help fill in until after the busiest part of the season was over. I do not recommend this! She did great, and luckily we had our best year up until that time. Still, when the season was over–she told me she was done. Rightfully so! We have three kids and her hands were already full!

I was burned and traumatized from my last VA’s deception, so the hiring process took a toll on me. I had a tough time screening potential hires as I searched for any possible clue signaling they might deceive me. It was madness.

I got a cold call from a customer service staffing agency. “We help e-commerce stores scale with dedicated customer service reps,” they said. I set an appointment to hear more. During the call, I told them the same story I just told you. They said had that happened with one of their people they would have absorbed the cost.

“That’s all I need to hear,” I said. “Send the contract.” I was sold.

Why I Changed to Direct Hires

The benefits of the agency at that time were many. First, they brought great people to me to interview within days. They also provided a success manager who made sure the VAs were logged in, coached them on how to provide more value, and followed up with me regularly to determine what success looked like and how they could manage to add value.

At the time I engaged them, my monthly rate was worth paying, as I viewed it as getting a VA and a manager as well as protection from a potential thief.

Most importantly, I needed someone FAST. They delivered.

What was the problem then? As the business grew over time I realized I needed more people. That’s where this article started. For the cost of a single VA with the agency, I could hire two or potentially three to grow my store. I saw a problem scaling with the agency.

Furthermore, it wasn’t me who decided when my people received a pay raise (which means they weren’t really my people). I didn’t like this being out of my hands. Also, the take-home for the VA was less than if I paid them directly. I embraced the fact that for my store to grow, I would have to be a manager at least for a while. So I decided to make the change.

At the time of writing this, I have three VAs working on my store and helping me pursue growth. One is in sales, another is in customer service, and the other is focused on sourcing new products for us to sell. I’m only spending slightly more per month than with the single VA provided by the agency.

What about my fear of getting ripped off again? Well, some of that is still there. But I’ve set up processes that give visibility of customer interactions to all team members. Now that there are three people on the team, all three would have to be in on it! That’s unlikely.

Need Help Building Your Team?

I’d love to hear from you and would be happy to introduce you to some folks who can help – schedule a meeting. Also, if you have any words of wisdom on this subject, please share them in the comments section below. If your insight can help others with their businesses, I’d love to pass it on.

Learn more about how I work with e-commerce entrepreneurs.


Disclaimer: This article is provided for educational, general information, and illustration purposes only. Nothing contained in the material constitutes tax advice, a recommendation for purchase or sale of any security, or investment advisory services. I encourage you to consult a financial planner, accountant, and/or legal counsel for advice specific to your situation. Reproduction of this material is prohibited without written permission from Allan Phillips, and all rights are reserved.

Allan PhillipsAllan Phillips is a Certified Financial Advisor (CFP®) and founder of Tree Street Advisory. He works with E-commerce business owners and Physicians who are concerned with issues such as cash flow management, high-earner retirement planning, debt repayment approaches, tax strategies, and business planning.


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