What is the influence of scalability?

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What is the influence of scalability?

Retailers decide in favor of “making” because they feel that they have sufficient capacity and resources in-house. On the other hand, they decide in favor of “buying’ when they do not want to invest in difficult-to-assess market developments. This often works out okay, but in 10% of the cases in which the decision was incorrect, this has long-term consequences.

Online retailers often feel that they can enter a foreign market with half the manpower. However, what happens if demand soars rapidly? Then you will need more personnel. If the market then worsens, these employees will again have to be made redundant. Such uncertainties speak in favor of a “buy” strategy. A service provider that can offer you flexibility allows you to invest in the expansion, but only what the (expected) returns also really allow. Scalability is accordingly an important topic for internationalizing online shops.

Ultimately, a thorough analysis of the capacity of your own organization Is needed, so that you can decide whether you should venture into foreign markets on your own or with a service provider. Although it often seems that a service provider is costly, one should definitely assess what costs await the company if demand should increase and how flexibly one can react to the market. Whatever you decide, do not forget that first impressions count. If you disappoint your new customers in a new market, it is very difficult to win back their trust.

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Janine Nöthlichs
Global Content Marketing Manager

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