Online outsourcing

Online outsourcing is the business process of contracting third-party providers (often overseas) to supply products or services which are delivered and paid for via the internet. Online outsourcing emerged in the early 2000s, along with advances in internet technology, as a viable option for SMEs and entrepreneurs who lacked the necessary financial resources to meet the costs associated with traditional forms of outsourcing.

Outsourcing or freelancing marketplaces play a pivotal role in connecting buyers of outsourced services (small businesses and individuals) with providers of outsourced services (freelance workers).

The last decade has seen strong growth in online outsourcing, particularly through freelance marketplaces, with over $500m USD spent on the top outsourcing sites between the turn of the Millennium and the start of 2010. In the first quarter of 2010 more than $50m USD was spent on these same marketplaces by the second quarter of 2010 this figure had jumped to over $70m USD, representing a 40% growth in quarterly spend in just 3 months. In the 3rd Quarter of 2010 this figure had reached $78.8m and did not take into account spend on crowdsourcing sites like 99Designs or Amazon's Mechanical Turk.

The exponential growth of online outsourcing has been attributed in part to the global economic downturn, however there is a strong indication that this method of doing business is becoming increasingly popular for SMEs (particularly micro-enterprises) and start-up businesses, despite the downturn, rather than because of it.