Amazon Business Leaks: Outsourcing Incorrectly

Outsourcing is a topic that rarely gets discussed as a business leak when it comes to Amazon FBA, but from my experience working with and helping other sellers, I’ve seen it done incorrectly far too often.

This is a business leak that can quietly cost you money, sometimes without you even realising it, and it often comes down to outsourcing at the wrong time, outsourcing the wrong tasks, or outsourcing without the right systems in place.

If you haven’t got the right infrastructure, skills, and mindset in place before you hand work over to someone else, you leave yourself vulnerable. You might think you’re freeing up time, but in reality, you could be opening the door to inefficiency, mistakes, and unnecessary costs.

Outsourcing is vital for growth. It’s one of the key ways to scale efficiently and sustainably. Without it, you’ll hit a ceiling on what you can achieve. But the truth is, there’s a right way and a right time to outsource, and doing it wrong can set you back more than it moves you forward.

In this blog, I’ll be breaking down the most common mistakes sellers make when outsourcing, how to spot when it’s hurting your business, and how to put a proper plan in place so that outsourcing becomes one of your most powerful growth tools instead of a business leak.

Different Types of Outsourcing

There are several types of outsourcing you can adopt when running your business, each with its own benefits when implemented correctly.

1. Hiring a Sourcing VA

A sourcing VA is someone dedicated to finding profitable products for you, often working full-time (e.g. eight hours a day) to help you hit your spend targets. When done correctly, this is an extremely effective way to scale your sourcing capacity and to keep a steady flow of leads.

2. Admin Virtual Assistant (Admin VA)

An Admin VA focuses on the behind the scenes work that keeps your business running smoothly. This can include many of the areas we’ve covered in the Business Leaks series, such as invoice chasing, reimbursement chasing, processing returns, and general operational support. The aim is to free you from time consuming admin so you can focus on growth.

3. Prep Centre

Outsourcing your prep to a professional prep centre is one of the most common and effective outsourcing methods. They handle all the product preparation, packaging, and labelling, allowing you to focus entirely on revenue generating tasks instead of operational bottlenecks.

4. Outsourcing Returns

As covered in the previous post, the returns process can be complex and time consuming. Outsourcing it to a dedicated service or prep centre means you can focus on core business activities while still ensuring your returns are handled professionally and efficiently.

All of these outsourcing methods can be extremely effective and are worth implementing, but only once you’ve scaled to the point where they make financial and operational sense. Doing them too early or without the right systems in place can create more problems than they solve.

How Outsourcing Can Affect You in a Negative Way

Outsourcing can be a powerful growth tool, but when done incorrectly, it can quickly become a drain on your time, money, and resources. Here are some of the main ways it can work against you.

1. Hiring a Sourcing VA

If you can’t source effectively yourself or don’t have a solid understanding of profitable products and reliable sourcing websites, hiring a sourcing VA can be risky. A sourcing VA may spot your lack of experience and take shortcuts, sourcing from poor websites, suggesting risky products, or even copying leads from other sellers. Without the knowledge to evaluate their work properly, you risk buying poor products and paying a VA who isn’t delivering real value.

2. Admin VA

An Admin VA needs well defined processes, systems, and documentation to work from. If you don’t have clear workflows, organised data, or proper business tracking in place, an Admin VA will have little to work with. This means you’ll be paying for their time without getting the full benefit of their skills, not because they’re incapable, but because they don’t have the structure they need to perform effectively.

3. Prep Centre

If you’re outsourcing prep but not sourcing products with healthy margins, you can seriously damage your profitability. For example, if you’re buying items with only £1 to £1.50 profit per unit and paying 60p per unit for prep, a large chunk of your profit is gone before you even sell the product. Using a prep centre makes sense only when your products and business metrics are strong enough to absorb the costs without eroding your margins.

4. Outsourcing Returns

Outsourcing returns can also turn into a business leak if you choose the wrong service provider or don’t track your returns properly. A poor quality returns service or a lack of oversight can result in lost items, unprocessed claims, and ultimately significant financial losses. Proper tracking and choosing a reliable partner are non negotiable to prevent this.

How to Outsource Effectively

To outsource effectively, you need more than just the budget to pay someone, you need the right skills, knowledge, strategy, systems, and processes in place before you hand over any part of your business.

As mentioned earlier, you must have the ability to manage the people working for you. For example:

• If you hire a sourcing VA, you need to understand sourcing yourself so you can assess their leads, guide their research, and ensure they’re working to your standards.
• If you bring in an Admin VA, you must know your admin processes and business workflows inside out so you can train them properly and measure their performance accurately.

The foundations of effective outsourcing are:

1. Learn your business inside out – Understand every stage of your operation before you delegate it.
2. Develop your skills and knowledge continuously – The more you know, the better you can manage and support your team.
3. Work on improving your business every day – Fix inefficiencies before handing them off to someone else.
4. Implement a strategy that suits the outsourcing – Plan who you’ll hire, when you’ll hire them, what they’ll be doing, and how you’ll measure results.

When you combine strong personal knowledge with clear systems and a well thought out strategy, outsourcing becomes a growth engine rather than a liability.