🥗 You Should Fire Everybody!

Just kidding (kinda), here's what we think

AuthorAuthor

Ron Shah & Ash Melwani
April 17, 2024

Hey there,

Welcome back for another bite to chew on.

In this newsletter, we’re going to talk about:

  • The responsibilities we handle ourselves versus those we outsource

  • The benefits of Outsourcing vs. In-house

  • What the future might look like for our strategies 

But before we get into all of that, we need your help…

It’s always a good idea to take a step back and evaluate things.

We’d love your feedback on how we could improve our newsletter.

What topics you’d like us to cover, what you think needs to change, what we do better than anyone else so we can lean into that even harder.

Reach out on these posts: Ron’s Tweet or Ash’s Tweet

We want real, 100% honest, nitty-gritty feedback because ultimately, this newsletter is for you.

We want to make sure you’re getting the value you deserve.

Thank you for doing that! Now, let’s get into things.

In-House vs. Outsource

Here’s What We Handle Ourselves:

  • Finance

  • Sales

  • Customer Service

  • Media Buying

  • Video Editing and Graphic Design

Here’s What We Outsource:

  • Retention Strategy aka Email/SMS

  • CRO/Landing Pages

  • Creative Agencies

  • Amazon Management

Outsourcing Turned Up to 11

Now, you might be thinking, “Damn, that seems like a lot of work being outsourced...”

That’s because it is, but that’s okay. 

Here’s why we outsource what we do and our thinking behind it all, so you can see examples of how delegating responsibilities can lead to even better results.


Email and SMS

We focus on maximizing customer return rates and overall revenue. 

Instead of having full-time copywriters, designers, and analysts, we have the agency use their knowledge to implement the strategies they’re constantly testing and learning from all the other clients they work with.

CRO 

It’s all about improving how many tests we run and their impact on revenue and conversion rates.

There’s a lot of elements running behind the scenes on this.

Analyzing data and website behavior. Taking this data to create tests within your website and landing pages. A web designer coming up with a way to make and implement these changes…

That could easily be multiple six-figure or high five-figure salaries.

OR you could outsource it to an agency for the equivalent of one salary.

Pretty easy decision, right?

Creative Agencies

We aim for as much creativity as possible with a solid hit rate, making sure our ads and visuals always feel fresh.

Each agency has a distinct style of designing and launching different tasks.

The reason we like multiple creative agencies is multiple perspectives on how to frame the brand and products.

The more, the merrier.

Amazon

We keep an eye on revenue and the efficiency of our ad spend.

This might be the most complex of all.

We’re still trying to figure it all out with logistics, advertising, copywriting, graphic design, listing optimization, all at the scale of Amazon.

It’s a lot of moving parts that we’d rather outsource to an expert and not have to figure out in-house.

The Meat and Potatoes

This is how our agency monthly budget breaks down by percentages.

*For creative agencies, this can depend on the volume we need, so it moves up and down.

You can equate this as 4 full-time hires, but we’re getting around quadruple that in terms of brain power per agency.

So, for the same cost, we get 12-20 people on a given aspect versus just 4.

Why Outsource?

That sounds like a lot… Well, it is, but there are good reasons for doing so.

Cost-Effectiveness

Bringing on a team of four full-time employees could be VERY costly in salaries alone, not including the time and resources spent on training.

On the other hand, outsourcing to an agency might cost the same but with less commitment and the flexibility to adjust as strategies evolve without big disruptions.

Training and Expertise

Agencies bring specialized knowledge and experience that would be time-consuming and costly to develop in-house.

They require minimal training from us and can hit the ground running, making sure that projects start on time and with high proficiency.

If you’re just starting out you may be able to do everything yourself, but you will reach a tipping point.

When you reach the point when you’re looking to scale, you’ll need to delegate.

You can’t grow a big business all by yourself.

You have blind spots and you need people who are smarter than yourself in certain areas + people who can focus 100% on a given set of tasks.

Outsourcing lets us access expert talent and manage more work than we could handle on our own.

Not So Fast…

There are cases where hiring in-house can be advantageous, particularly when tight control over projects and deep integration into company culture are required.

In-house teams can be more dedicated to a wider range of tasks, potentially increasing their value over more narrowly focused agency teams.

The Right Fit

Ultimately, whether to hire in-house or use agencies depends on your core competencies and management capabilities.

If you excel at people management and can cultivate talent effectively, building an in-house team may be the better route.

But if your strengths lie elsewhere, partnering with agencies that can offer the expertise and management needed might be more effective.

Strategic Decision-Making

When choosing partners, it's essential to be clear about expectations and goals.

Being upfront and setting clear expectations with potential agencies ensures that both parties understand the objectives and can assess the fit effectively.

Tool of the Week

Chargebacks were a sensitive in-house issue we always found difficult to talk about.

We were lucky to win around 20% of the disputes, and it cost us around $40 for each whether we’d win or lose…

So, we applied the same mindset to chargebacks as agencies and outsourced them to Chargeflow.

Not only did our win rate shoot up to 59.7%, but last quarter, they sent us a $5,238 check (for work THEY did).

If Chargeflow doesn’t win the dispute, we don’t pay. Their fee structure is entirely success-based.

Who knows how much we would have spent losing most of our chargeback disputes without them…

If you’d rather not have the headache of dealing with chargebacks (and win more of them), we’d highly recommend outsourcing them to Chargeflow.

A Few Other Things You Might Be Interested in:

If you found yourself wondering how the heck we manage 50 ad creatives a week (we get asked this a lot),

Here’s our presentation with Motion going over exactly how we manage our ads

Speaking of Ash and Ankit,

Thanks for Reading Along

As our companies grow, so do our needs.

We might bring more tasks in-house, or we could expand our network of agencies. 

The best part about all of this is that it’s entirely fluid and can change when you need it to.

We can see things trending towards needing a specific project manager between Obvi and agencies.

It is becoming a lot to manage, and we need to lead the overall strategy.

That’s the beauty of outsourcing all of this work to agencies.

We can focus on what we do best while still innovating and expanding what we’re capable of.

If anything, we hope this has helped expand your thinking about being smarter with your resources and getting the best possible results.

A strategy that any business can learn from.

All the best,

Ron and Ash