Outsourcing has evolved from a purely cost-cutting strategy to become an invaluable process for business development. Businesses have seen that there is more to outsourcing than just comparative cost advantages. You have conditions that support economies of scale; get more work done at lower cost.

Businesses have also realized that talent isn’t the monopoly of one or a few regions in the world. There are talented people to be found across the globe. Digital technology has made collaboration with global talent easier, more convenient, and cost-effective.

Outsourcing product data entry to third-party service providers has become standard procedure for most businesses. Collating, organizing and securing Big Data has become a crucial function for businesses to stay competitive in the industry.

However, the amount of work needed to acquire large volumes of information can be time-consuming and expensive. Outsourcing product data entry has become the go-to viable solution.

5 Advantages Of Outsourcing Product Data Entry

Streamlines Operating Costs

The number one reason why businesses outsource is to streamline operating costs. The largest comparative cost advantage is in labor. By outsourcing to third party service providers, you only pay for productive hours and are not obligated to cover benefits.

Fixed wage employees are paid their salaries in full whether they are productive or not. The meter keeps running even if they spend more time in the bathroom, on social media, or at the break room sharing stories with co-workers over coffee. In addition, you are mandated by law to cover their benefits.

In comparison, a third-party service provider such as a Virtual Assistant is a contracted worker. The VA is paid only for the hours rendered for the project. He/she is responsible for his/her benefits.

It is estimated that the cost of hiring a full-time employee is equivalent to 1.5 times to double his/her basic salary. Thus, you can save up to 50% on labor costs alone by outsourcing product data entry.

Increases Overall Productivity

If you have the ability to type 80 words per minute (wpm) and are proficient with spreadsheets, would you do product data entry yourself? If so, then you are working for and not on your business.

As we mentioned, product data entry can be a massive undertaking. It is both qualitative and quantitative work. You have to be fast enough to handle large volumes of data and be accurate enough not to make costly mistakes.

The time it will take you to enter data is best allocated for activities that contribute directly to your business bottom-line.

If you’re into real estate, wouldn’t you rather be on the field talking to potential buyers or negotiating sales contracts? The last thing you should want is to be stuck in an office tapping at a keyboard and updating information.

By outsourcing tasks like product data entry, you free up more time so you can attend to matters that can potentially add dollars and cents to your bank account.

Improves Quality of Work

When you have the time and the talent, you can improve the quality of work. As we discussed in the previous section, even if you have the talent, your time is best spent on managing your business’ core functions.

The challenge for entrepreneurs and decision-makers is learning to trust their outsourcing partner. A good service provider will only hire the best talent to manage your project.

Why do countries such as the Philippines and India continue to become leading sources of talent in customer service and I.T work respectively? Because throughout the last decade or so, Filipinos and Indians have consistently produced world-class, top quality work for international clients and the world has taken notice.

English is the primary medium of instruction in the Philippines. The country has a literacy rate of 97%. India has made a name for itself since the 1990s when Silicon Valley first started outsourcing partnerships with their companies.

Reduces Risk of Business Expansion

Outsourcing reduces the risk of expansion because of the existence of economies of scale. You can expand the scale of the outsourcing arrangement depending on the ROI for every additional input.

If output continues to increase without compromising the quality of work and the budget, then business expansion is warranted.

You can even negotiate terms of the outsourcing arrangement. Many reputable outsourcing partners are willing to renegotiate their rates in exchange for higher business volume and a longer contract.

This lowers your cost per unit, reduces your risk exposure while increasing the level of productivity.

Builds Sustainable Strategic Partnerships

In our previous example, an outsourcing partner that is willing to renegotiate its rates shows the benefit of having sustainable strategic partnerships. In a strategic partnership, both partners become equal stakeholders. They will work to protect the interest of their partner to maintain the success of the arrangement.

Strategic partners approach negotiation with a protagonist mindset. They understand that compromising self-interest is a necessity to achieve the long-term purpose.

You can start out by outsourcing product data entry to get your feet wet and to have a better feel and understanding of the process. Once you have developed trust, you can consider outsourcing other functions such as back-office work, customer service, and tasks that require highly-specialized skill sets.

Risks Of Outsourcing Product Data Entry

Your outsourcing partner can tell you that they have data security and integrity measures in place. They can even send you the technological profile of their I.T. infrastructure. Some will even invite you to watch a demonstration on how their system defends the network from cyber-attacks.

However, what is your assurance? What if the risks are not from external sources but from within? How can you guarantee that the outsourcing partner is regularly updating its system with the latest technologies?

Remember, cyber-criminals launch thousands of attacks every day. Popular outsourcing destinations like India and the Philippines have been widely criticized for having poor I.T. capabilities, substandard, and costly Internet services.

Lack of Controls

Digital technology makes it easy and convenient to collaborate with third-party service providers from remote locations. Still, nothing compares to close, shared-space collaboration where you can monitor the quality of work much better and implement changes in strategies immediately.

Time zone differentials also make it hard to address issues that demand your exclusive attention.


  1. Coping with Cultural Barriers


If you plan to outsource product data entry work to the Philippines, you have to keep in mind that Filipinos closely observe religious holidays. These “Holy” holidays may be regular working days in your country but not in the Philippines. They may not work on Holy Thursday, Good Friday, Black Saturday and Christmas Day.


Filipinos also have very closely-knit family units. It is possible some remote workers will not work on their loved ones’ birthdays and anniversaries. If they do so, it should not be seen as lack of dedication. Traditions and practices handed down after being a colony of Spain for 300 years have greatly influenced how Filipinos cherish special occasions with their families.


Then, of course there is the language barrier to contend with. When you’re working with a VA from a remote location, he/she may say “yes” even if your instructions are not clear. Instead, you may have to ask for feedback to make sure the VA knows exactly what to do.




Likewise, with advantages come the risks. There is no such thing as a perfect business strategy especially in this age of the Internet where access to information levels the playing field. Outsourcing is a business engagement and it takes two parties to make an arrangement.


Conflicts of interest, miscommunication, and lack of adequate internal and external controls can impact even the best of partnerships. Global collaboration should take into account cultural barriers, political stability, and existing socio-economic conditions. These are variables that are often overlooked and not factored into the outsourcing equation.


Outsourcing remains a viable business strategy but you should be aware of its risks and not just its advantages.