Our guide on how to structure an E-Commerce team: Part one

An E-Commerce team is the backbone of any company that sells products or services online. By working together, the team can be immensely valuable, helping to increase sales, improve customer satisfaction, and reduce costs for an E-Commerce business. 

From choosing the type of team structure most suited to your brand, the E-Commerce jobs you need to recruit for and key considerations like choosing between contract and permanent hires to establishing your onboarding process for your team, there are many things you need to acknowledge when structuring your E-Commerce team. 

In our guide on how to structure an E-Commerce team, we'll delve into all of the above to help your E-Commerce business grow within the competitive and ever-evolving online space. 

We’ve decided to split our guide into two parts. In part one, we'll explore the seven types of E-Commerce team structures you can opt for when building your E-Commerce business. Then in part two, released on 30th June, we’ll delve into the five considerations for structuring an E-Commerce team.

7 types of E-Commerce team structures

Choosing the right type of E-Commerce team structure is essential to build a successful, high-performing brand. The type of structure you opt for will depend on a number of factors, including the size of your company, the complexity of your products or services, and your business's goals. 

To help you determine the best solution for your E-Commerce business, let’s explore the seven types of E-Commerce team structures, including an overview of each structure and its advantages and disadvantages.

1. Brand-focused

A brand-focused structure is best suited for large E-Commerce businesses with multiple brands. This type of organisational structure consists of team members grouped by a specific brand, allowing each brand to have its dedicated team responsible for all aspects of its E-Commerce operations, from marketing to sales to customer service.

Here are some of the benefits of a brand-focused structure for an E-Commerce team:

• Increased focus on each brand: By having a dedicated team for each brand, team members can focus their attention on the specific needs of that brand. This can lead to better marketing campaigns, more effective sales strategies, and improved customer service.

• Improved coordination between departments: A brand-focused structure can strengthen the coordination between departments, such as marketing, sales, and customer service. This can lead to a more seamless customer experience and better results for the company.

• Increased ownership and accountability: By having a dedicated team for each brand, team members feel a sense of ownership and accountability for the brand's success. This can lead to increased motivation and productivity.

However, there are also some potential drawbacks to a brand-focused E-Commerce team structure:

• Heightened costs: A brand-focused structure can lead to increased costs, as each brand will need its own team of employees, including an E-commerce Manager, E-commerce Director, and Head of E-commerce.

• Increased complexity: A brand-focused structure can be more complex to manage than a traditional functional structure. This is because there will be more communication and coordination required between different teams.

• Reduced flexibility: A brand-focused structure can reduce flexibility, as it can be challenging to move employees between brands. This can be a problem if a brand is experiencing a sudden increase or decrease in demand. However, the reallocation of resources associated with reduced flexibility means you can move people depending on where you need them, so this could also be seen as a positive.
  
  

2. Functional

A functional structure is where E-Commerce team members are grouped by their specialism into a department or 'functional' area. For example, these departments could be categorised as marketing, sales, or customer service, with each function led by its own manager. So, for example, a PPC specialist could fall under the marketing department, spearheaded by the Marketing Manager. This type of structure would best suit a medium-sized to larger E-Commerce business.

Here are some of the benefits of a functional structure for an E-Commerce team:

• Simple and easy to manage: A functional structure is simple and easy to manage, as each team is responsible for a specific area of expertise. This can make it easier for managers to track progress and identify areas for improvement.

• Expertise: By grouping team members by their functional area, companies can ensure they have access to the expertise they need to succeed. For example, the marketing team would have a marketing strategy, design, and analytics experts.

• Cost-effective: A functional structure can be cost-effective, as companies can hire employees with the specific skills and experience they need for each functional area. This can save money on training and development costs.

There are also some potential disadvantages to a functional structure for an E-Commerce team:

• Departments can be siloed: A functional structure can lead to silos, as team members may focus on their expertise and not the company's overall goals. This can make it difficult to coordinate activities across different functional areas.

• Takes time to adapt: A functional structure can be slow to adapt to changes in the market, as each team may need to make changes independently. This can make it difficult for companies to stay ahead of the competition.

• Potential to be inflexible: A functional structure can be inflexible, as moving employees between functional areas can be difficult. This can be a problem if a company is experiencing a sudden increase or decrease in demand.

  
  
  

3. Flat

A flat structure for an E-Commerce team involves a company opting for few or no levels of management. This type of structure is more commonly seen in small brands and start-ups with limited resources. It allows for more direct access to decision-makers like E-Commerce Directors while helping speed up decision-making and improve communication between team members.

Here are some of the benefits of a flat structure for an E-Commerce team:

• Increased collaboration: A flat structure can promote collaboration, as team members have more opportunities to collaborate and share ideas. This can lead to better decision-making and a more innovative approach to E-Commerce.

• More decision-making power: A flat structure can give team members more decision-making power. This can help to motivate team members and give them a sense of ownership over their work.

• Reduced hierarchy: A flat structure can reduce or eliminate hierarchy within a business, a solution some companies prefer as there are fewer levels of management to go through to make decisions. This can speed up decision-making and improve efficiency.

However, there are some cons to opting for a flat structure for an E-Commerce team:

• Potentially more difficult to manage: A flat structure can be difficult to manage, as it can be challenging to keep track of all the different activities and projects that are happening. This can lead to problems with coordination and accountability.

• Resolving conflicts can be challenging: A flat structure can make it more challenging to resolve conflicts, as there is no clear hierarchy to turn to for guidance. This can lead to problems with morale and productivity.

• Can make it harder to attract and retain top talent: A flat structure may not be attractive to all top talent, as some people may prefer the stability and security of a more traditional organisational structure.

4. Geographic

When it comes to a geographic structure, the clue really is in the name. A geographic structure works best for E-Commerce businesses with a global presence. It involves grouping your employees by location, allowing each team to focus on the specific needs of their local market - a country or region. Each geographic team could be broken down into individual departments, similar to the functional approach, and will be spearheaded by a manager or head of the department.

Here are some of the benefits of a geographic structure for an E-Commerce team:

• A better understanding of local markets: A geographic structure can help companies better understand their local markets' needs. This can lead to better marketing campaigns, more effective customer support, and increased sales.

• Improved customer experience: A geographic structure can help to improve the customer experience, allowing customers to interact with team members who speak their language, understand their currency, and are familiar with their shipping and delivery options.

• Increased flexibility: A geographic structure can help companies to be more flexible as each team can respond quickly to changes in their local market.

A geographic structure for an E-Commerce team does come with some potential disadvantages:

• Increased costs: A geographic structure can lead to increased costs, as companies may need to hire employees in multiple countries. This structure would, therefore, be best for larger E-Commerce businesses.

• Higher complexity: A geographic structure can be more complex to manage than a traditional functional structure. This is because there will be more communicatiodn and coordination required between different teams across the globe.

• Potential for less collaboration: A geographic structure can reduce collaboration, as team members may be less likely to share ideas and work together if they are located in different countries.

  
  
  

5. Market-based

Similarly to a functional and geographic structure, a market-based E-Commerce team structure involves segregating your employees by the markets they serve. This type of structure can benefit companies that sell products or services to multiple markets, allowing each team to focus on the specific needs of their target market and audience.

Here are some of the benefits of a market-based structure for an E-Commerce team:

• Deliver expertise within your target markets: A market-based structure can help companies better understand their target markets' needs, similar to that of geographic.

• Improved customer experience: A market-based structure can help improve the customer experience as customers can interact with team members who understand their needs and are familiar with their market.

• Greater flexibility: A market-based structure can help companies to be more flexible as each team can react to changes in their target market as soon as they happen.

Some potential setbacks to a market-based structure for an E-Commerce team:

• Involves more costs: A market-based structure can increase costs, as companies must hire employees for each target market.

• Can be complex: A market-based structure can be more complex to manage than a traditional functional structure as you need to ensure all markets are catered to and aligned with the long-term business goals.

• Less collaboration: A market-based structure can reduce collaboration, as team members may be less likely to share ideas and work together if they are focused on different markets.

  
  
  

6. Process-based

A process-based E-Commerce team structure is similar to a functional structure whereby team members are grouped by the processes they are responsible for, whether it's marketing, sales or inventory management. However, the process-based structure involves each department having a hierarchy, from entry-level to senior management, and is unique in how it has a 'process' for how departments interact.

For example, an E-Commerce business offering a product would start with the customer interacting with the content produced by the marketing department, whose responsibility is to entice the target market. The customer would then be introduced to the sales team, who go through their internal sales process before finalising the order and moving the process onto the inventory management team, who ensure the customer receives the final product. 

Here are some of the benefits of a process-based structure for an E-Commerce team:

• Increased efficiency: A process-based structure can help to increase efficiency by allowing each team to focus on a specific process and become experts in that area.

• Structured customer experience: A process-based structure can help to improve the customer experience by ensuring that customers can get the help they need throughout the buying process.

• Increased flexibility: A process-based structure can help increase flexibility by allowing teams to adapt to market or customer needs changes.

However, there are also some disadvantages to process-based structure:

• Requires more resources: A process-based structure can increase costs, as companies may need to hire more employees to staff the different teams. Therefore this approach would be more suited to a medium or large-sized company. 

• Tough to manage: A process-based structure can be hard to manage because it involves many components. Time should be dedicated to ensuring new and existing employees understand the processes of their own and each department from beginning to end. 

• Things could get lost in translation: As each department has its process, on top of the brand's overarching process, there's potential for messages to get sent to the wrong people, workflows to be disrupted, and work to be moved on to the next stage too soon or too late. So, not only should employees know the ins and outs of all the processes, but the teams should also know the appropriate channels for communicating with each other.

7. Product-based

Finally, a product-based E-Commerce team comprises the team being grouped by the products or services they work on. Larger E-Commerce businesses often use this type of structure with varied product offerings and want their teams to focus on specific products and develop deep expertise in those areas.

For example, you may find in a product-based structure; each team has a Product Manager, developers, and marketing professionals. The Product Manager is responsible for the overall vision and strategy for the product, the developers are responsible for building and maintaining the product, and the marketing professionals are responsible for promoting and selling the product.

Here are some of the benefits of using a product-based structure for an E-Commerce team:

• Improved focus: E-Commerce teams can focus on specific products and develop deep expertise in those areas, which can lead to better products, better marketing, and better sales.

• Increased agility: Teams can respond quickly to market, or customer needs changes, helping businesses stay ahead of the competition.

• Reduced costs: With more cross-departmental work, teams can share resources and expertise to help reduce costs.

However, there are also some challenges associated with using a product-based structure:

• Communication challenges: It can be difficult to communicate effectively between teams, especially if they are located in different parts of the world.

• Resource challenges: Allocating resources effectively between teams, especially if some teams are more successful than others, can be challenging.

• Management challenges: Managing a large number of teams, each with its own product manager, can cause problems, especially if the responsibilities of each product manager are not fully understood or aligned by other managers and the wider team.

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As your E-Commerce business grows and the markets and locations you operate in evolve, your team structure will likely change too. You may find that you decide to opt for a different approach to your team's structure. 

Regardless of the type of E-Commerce team structure you choose, it's important to ensure your employees understand the structure, knows their roles within it, and are aware of any developments to the structure as your brand evolves. 

Our guide on how to structure an E-Commerce team: Part two

Now that you've read part one of our guide on structuring an E-Commerce team, come back next week to check out part two on 30th June. In part two, we’ll explore the following:

5 considerations for structuring an E-Commerce team

1. Determine the size of your E-Commerce team
2. Focus on your brand's vision and goals
3. Seek cost-effective solutions
4. Contract vs Permanent hiring
5. Establish your onboarding process

Once you've read both, you'll be well on your way to building a team that enhances long-term success for your E-Commerce business.

Looking to grow your E-Commerce business? We can help

By investing in your E-Commerce team, you can ensure the long-term success and sustainability of your business. If you need an exceptional talent search to assist with the growth of your brand, are struggling to fill your open E-Commerce jobs or are looking to upload a vacancy, we can help you.