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Retail outsourcing [1] is a form of business process outsourcing practiced in retail, logistic and restaurant business. It involves the contracting of the operations and responsibilities of transportation, cooking, customer servicing or settlement of accounts business processes to a third-party service provider.
Outsourcing may involve a subset of an operation's logistics, leaving some products or operating steps untouched because the in-house logistics is able to do the work better or cheaper than an external provider. [6] Another important point is the customer orientation of the 3PL provider.
Sales outsourcing can also be used as a market entry strategy and avoids permanent establishment risk. The sales outsourcing is gaining popularity among the startups in venturing into a new market. The primary reason being the increasing number of technology based startups around the globe where no physical product is involved.
From 2000 to 2010, the U.S. experienced a net loss of 687,000 jobs due to outsourcing, primarily in the computers and electronics sector. Public disenchantment with outsourcing has not only stirred political responses, as seen in the 2012 U.S. presidential campaigns, but it has also made companies more reluctant to outsource or offshore jobs. [102]
Quality control can become more challenging when business operations are outsourced. While third-party companies might be experts in their fields, they may not maintain the same standards as the hiring company. This can result in a decline in the quality of goods or services, potentially damaging the company's brand and customer relationships. [31]
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