“Hard times are when a man has worked at a job 30 years, 30 years. They give him a watch, kick him in the butt, and say: ‘Hey, a computer took your place, daddy.’ That’s hard times.”
Professional wrestling legend Dusty Rhodes said these words in October of 1985 during a promo for an upcoming championship match.
It’s become known as one of the greatest wrestling promos of all time because of the way it resonated with the audience.
Can Humans Deliver Greater ROI?
The idea of computers, robots and software systems replacing traditional workers is becoming more of a reality every day. As a business owner, you're a decision maker on this front. You have to take that seriously. Consider what's best for your business.
The question is simple: When should you hire an employee and when should you implement software? But the answer is complex.
And how you answer it varies on a business-by-business, function-by-function basis.
3 Small Business Cost Centers to Consider
Let's look at three key small business areas: warehousing and shipping, social media and inventory management — and address the pros and cons of hiring an employee in each area compared to grabbing a software solution to automate it.
Warehousing and Shipping
This includes maintenance and coordination of your warehouse, including receiving, distribution, and legal compliance.
You could hire a warehouse manager to handle this. That’ll run you at least $27,000 a year with the national average being closer to $50,000, according to Glassdoor.
But it would also allow you to spend more time in the office doing the important things that grow your business and less time doing manual labor.
The relationship aspect of hiring an employee is also a benefit here. It’s nice to have a person you know be accountable for the day-to-day management of your warehouse and shipping.
Your second option is to use a combination of shipping software and fulfillment services. The most popular fulfillment service is Fulfillment By Amazon (FBA) and for good reason. It will house your product in its warehouse and handle the shipping.
That’s right. You don’t have to pay for your own warehouse. Amazon provides a fees calculator for FBA, and most sellers add about $3.99 to their product to cover the fees. A shipping tool like ShipStation makes this simple process even easier. It’ll route the sales from your marketplaces to FBA, then communicate tracking info to your customers.
Verdict: It’s going to be hard times for warehouse managers, daddy. The FBA + ShipStation combo is just too good to pass up. The less time you have to spend worrying about shipping and maintaining an entire warehouse, the more money you can save on overhead, and the more time you’ll be able to spend developing a great product.
This includes digital marketing, customer engagement, and brand development that takes place on social networking sites.
Glassdoor reports the lowest salaries for social media managers are around the $28,000 mark, but the national average is only around $47,000. This is a newer field dominated by a lot of young professionals.
It requires an agile mind, as trends and even platforms can change at a day’s notice. Those of us who are habitually behind the times might find it too difficult to keep up with ourselves. Having an on-site individual passionate about communicating through emerging channels will keep your business at the forefront of your customers’ minds.
Social media can also be automated. IFTTT is an incredible program that allows you to create time saving “recipes” to organize your digital life. You can create IFTTT recipes that connect to Twitter, Facebook, Pinterest, and other social networks to share and deliver content. This assures that you’ll have a constantly active social media feed that functions entirely hands off. The best part? IFTTT is currently free.
Verdict: Authenticity creates the basis for an effective social media strategy. That means hiring someone to develop and implement a plan for your business on social is a better investment of your time than trying to automate it through software.
Creating genuine engagement through organic customer interaction will lead to more conversions than just having an endless stream of robotic content.
This includes obtaining and preserving accurate records of stock quantities, sales orders and listings across multiple channels.
A sales channel manager ain’t cheap. This is the most expensive hire on this list. The lowest salaries Glassdoor could find were more than $50,000 a year, and the national average is $88,000 a year. This is for good reason though.
The more marketplaces on which you sell, the more customers you’ll be in front of. If you also sell at a brick and mortar with a POS system, which will add another complicated level of organization.
A sales channel manager will update your listings, oversee your ecommerce stores across the web, and expand your business into new online markets by entering all your listings into the new site. The amount of time and energy you can save by passing these tedious tasks off can’t be quantified.
On the other hand, a software solution can handle significantly more volume than a hire. Prices range from $50 a month for solutions focused on small businesses and startups to $2,000 a month for enterprise solutions.
No matter what you pay, human error is removed from the equation. Computers don’t get confused or overwhelmed. What happens when your business outgrows your expensive new sales channel manager? Do you just hire another one?
That’s not scalable. No matter how many channels your business uses, a great software solution can keep up with the action, putting everything in one location and automating the never-ending updates prompted by sales and purchase orders.
Verdict: This one goes to the software, mainly because inventory management systems can be combined with the ShipStation and Amazon FBA combo mentioned before. It removes human error from the equation entirely, which helps you prevent overselling and accidentally running out of stock. It’s a much more scalable option than a hire.
The Age of the Machine
I’m not trying to put “hard times” on workers and neither are you.
There are times when you absolutely should make a hire. But then there are other times when the financial and practical benefits of using software solutions just make too much sense to pass up. Make the call that is right for your business.
Don’t give yourself hard times.
Title image from Fritz Lang’s 1927 sci-fi epic Metropolis