How to Structure Your Ecommerce Team

Creating or adding to your Ecommerce organizational structure

During my 34+ years as a marketing/ecommerce recruiter, I’ve had the opportunity to work with countless hundreds of online businesses, both B2B as well as B2C. I’ve placed executive ecommerce leaders and helped businesses recruit and hire entire ecommerce teams with clients ranging from Fortune 100 companies all the way down to early stagers and brand new start-ups. During my client kick-off calls, I am often asked to share my insights on ecommerce organizational structure, a topic I write about frequently. Over the decades I’ve seen what org structures work and which ones don’t. I’ve seen owners scale up their ecommerce businesses to great success while others crash and burn. The stakes are high: In-house ecommerce departments can be complex machines with many moving parts covering a wide range of responsibilities including product, brand and content, marketing, trading and conversion, operations and fulfillment. A misdirected, outdated or less efficacious structure can result in unnecessary ambiguity, confusion, and lack of accountability. Many figure it out as they go, shooting from the hip as they switch focus from markets to products to competitors, rather than looking at the bigger picture. This often results in piecemeal changes where responsibilities can be overlooked, sometimes overlap, and where people and functions can actually work against each other. Worse, functions become totally misaligned with overall business objectives.

I have never seen two org charts that look the same: There is no one universal answer for how to organize around ecommerce. But there is one irrefutable fact: It’s all about the people you hire. They will make your business, or break it. The structure is no better than the people who work it. The trick is putting the right people into the right places at the right time.

This article will help you do that.

The Ecosystem of Ecommerce

For HR professionals and others who have limited experience hiring ecommerce specialists, first some basic definitions. When I sit down and work with companies on ecommerce organizational design, I like to think in terms of the “front-end” of the ecommerce business (which is my focus) versus the “back-end”. This helps me to compartmentalize the major key roles. Front-end functions would include the following:

Front End Development: Site architecture, site features and functions, frontend integrations, site testing, QA, UAT, asset upload, CMS

Merchandising: Manage and own the site calendar, planning and buying, pricing, site merchandising, manage online categories

Creative: Site creative guidelines, UX, UI (sometimes these functions report up to Development), features, editorial design, copywriting, design for marketing assets

Marketing: Site promotion strategy, SEO, SEM, display, affiliate, social, programmatic, email, vendor management, brand marketing, content

By contrast, back-end operations would include such areas as payment processing, fulfillment and returns, fraud and tax calculations and customer service, chat, and issue escalation.

We all know the engines of an ecommerce business: Attracting customers to the website, converting them into customers once they’re there, fulfilling orders and offering customer service, and turning first time customers into repeat buyers. Eventually, an ecommerce business will grow to the size where it will need specialists to take responsibility for these functions. And even though ecommerce as we know it is barely 25 years old, it’s already taking on whole new directions. One client I know, a global multichannel consumer products corporation, has all but eliminated its ecommerce team and now draws in strategists, marketers, creatives, analysts, IT, pretty much everything the ecommerce channel needs from across the organization and utilizes them as sort of internal “contractors” to come in and help out as needed. They claim it gives the divisional GM the flexibility to re-allocate resources on very short notice and take advantage of market opportunities as they arise. Be that as it may, this represents the only such example of extreme ecommerce decentralization that I’ve seen in my practice.

Marketing Versus Operations

First question you need to ask when considering the best ecommerce organizational structure for your business is this: Do you sell entirely online, or is ecommerce just one of other distribution channels? If you’re a smaller pure play, the ecommerce team should ultimately report up to the owner or chief operator of the business. For those businesses that market through multiple channels, ecommerce typically falls under marketing or operations. Only rarely, and I mean VERY rarely, should it ever report up to IT, Finance or any other function unless the business totally lacks a marketing or operational head. When ecommerce first began it was often included as part of the IT department because in those days there was really nowhere else to put it.  Ecommerce was viewed as a mostly IT channel, sort of a “build it and they will come” belief at the time with little marketing behind it. Even today, many companies in manufacturing and construction are still holding onto the outdated idea that ecommerce is an IT function, but that mindset is definitely fading as digital commerce becomes more mainstream among old-line industries.

The decision to place ecommerce under marketing or operations in your ecommerce organizational structure often comes down to the nature of the business. If you have an especially large number of SKU’s with more varied and complex supply chain, fulfillment and customer service requirements, then you’re probably a good candidate for having ecommerce roll up to operations. These functions often require complex systems and processes which don’t often fit within a marketer’s skill set with too many opportunities for the operational wheels to come off. I see this often on the B2B side among companies that manufacture highly customized, engineered products.

This whole question of marketing versus operations really comes down to the strengths of the owner/entrepreneur. If you have a strong marketing or sales background and that’s really what you want to focus on, then it only makes sense to hire someone with a strong operational skill set. At a certain point- I would say roughly in the $5 to 10 million dollar revenue range- it’s time to consider bringing on a strong operator to take care of the systems and processes that have been sucking up your time.

When does it make sense to have marketing run the ecommerce show? I usually suggest it for any business other than the kind I’ve just described, eg, ecommerce businesses that are pure plays, or those that need to put at least as much focus on customer acquisition, conversion and retention as they do on product management, fulfillment and customer service. This category would include B2C resellers in highly competitive consumer product categories that rely on search, email, social, affiliate, UX, conversion, retention and other marketing channels and strategies to drive traffic and retain customers. Some of the best owners I have ever worked with are very strong operators. They can take complex operations and create repeatable systems and processes while they grow and scale. Even better, they recognize their strengths and weaknesses. Some have little interest in figuring out the “front end” of the business, eg, site promotion strategy, search, display, affiliate, social, programmatic, email, vendor management, creative, user experience and interface, etc. Instead, their skill is in building the best operating machine for the digital channels.

While marketing is the most common functional bucket where you’ll find ecommerce, it is not universal. In larger corporations where there is a strong reliance on software and other computer technology to serve up the ecommerce store, IT groups will sometimes take ownership. Having all that technology is great, but with less marketing involvement there is usually a trade off in lack of understanding of customer behavior, which can be problematic in a world where the customer is in charge.

I’ve also had clients who run consumer goods ecommerce businesses ask me if merchandising should run the store. After all, they reason, without merchandise there IS no business, and of course in the brick and mortar retail world the head merchant sits at the same table with the President, CFO and other top executive leaders. I explain to them that while all of that may be true, the mantra of “sell it and they will come” is not a winning strategy. In ecommerce, marketing the product is more important that the product itself. My most successful ecommerce clients ask themselves what I call the “how” question- “HOW are we going to grow the business?”, and then they structure around it.

Hiring Your First Ecommerce Head

Once you’ve determined which direction you’re going- operational versus marketing- the needs of your business will dictate who you should hire first as you develop your ecommerce organizational structure. For many of my smaller clients (who I define as generating roughly up to $10M in revenues), it starts with an ecommerce specialist, a hands-on, roll-up your sleeves “doer” with both marketing and operational experience. At this level they may not have more than 7 or 8 years of experience, but that’s OK. It’s always better to hire slightly “up” than to hire “down,” as you want to allow this person room to grow into the role over time.

For businesses owners whose personal passion is building the best operating machine, this first ecommerce hire should be someone who can run with the marketing and sales side of the business, someone who has a grasp of digital marketing, customer experience and perhaps even brand positioning. Every online business needs to attract visitors, convert them and retain them. This person should be a digital native with a creative mind, highly data-driven and analytical, and proven experience developing teams.

There are two ways to go here. Depending on the size of your business, you might need someone at the Manager level or you might need a Director. By “Manager,” I’m referring to someone with roughly 7-12 years of experience in the areas just mentioned. You might be able to get by with someone at the lower end of that experience scale (and at a lower price tag) IF they’re going to be reporting up to a President and/or owner who is a savvy and deeply engaged marketer. In that scenario, this role essentially would be a hands-on project manager. On the other hand, you might need someone who is both highly strategic as well as very hands-on, has a demonstrated track record of successfully growing an online business to at least the size you are now and preferably to multiples larger, knows more about the latest trends and best practices in digital commerce than you do, has management and leadership experience, and can identify and direct outside resources. Tickets to that dance would typically start at the Sr Manger or Director level. Most Directors have anywhere from 10 to 20 years of experience. In order to attract a candidate who currently has the title of Manager or Senior Manager, offering the title of Director can be a very strong inducement for someone who is ready to move up in their career.

This person can’t be, and won’t be, an expert in everything. They will be what is often referred to as a “T” marketer, someone who has some depth in a few areas of digital marketing and exposure in others. Ideally, they can wear multiple hats, sort of a “Swiss Army Knife,” as I like to call them, who is an inch deep and a yard wide but deeper in the areas where you need stronger expertise to drive the business. Those areas of need should be defined by how you expect the business to scale. Where do you want the business to be in 12 months, 24 months, 36 months? Exactly what will you need to focus on in order to reach those goals? What will your cash flow allow you to hire right now? These questions, and others, should be part of the roadmap that spells out your vision for the business and how you’re going to get there. As an example, if your business is going to be driven largely by paid media then you’ll start with someone who has solid paid media background and exposure to other growth drivers such as email or social media. I had one client who recently told me that 90% of their business was generated through email. Sounds like a scenario for an Email Marketing Manager to be hire #1!

For owners who already have strong marketing and sales expertise as well as product domain knowledge, on-boarding an operator is the perfect complement. A good operational hire will help create leverage and free up the owner to apply their expertise to the business side of the house. I worked with one client recently who started his business after spending some 10 years with a bigger business in the same product category. He had the product knowledge, the domain expertise, and an extensive background in the specific marketing channels that he knew would drive his business. The product catalog was also relatively large (more than 20,000 SKU’s) and came in a wide range of weights and sizes. Some were private labeled, others were manufactured. This business was a perfect candidate for an ecommerce operations specialist.

Then there are those owners who are more of a generalist- good at many things but not expert at any one thing. This can be a little tricker because many clients I have worked with who are more business generalists are actually pretty knowledgeable in a lot of different areas. Sometimes they struggle “letting go”, a condition that is not uncommon among successful serial entrepreneurs. In these situations, I usually recommend letting the business roadmap dictate where to go. For example, let’s say you have a strong Amazon marketplace business and you want to either stand up or expand your direct-to-consumer channel. For this, you’ll need someone with strong expertise in things like email, search or social. If, on the other hand, you already have a strong direct ecommerce business and want to expand into marketplaces and other social channels, you might need a marketer or you may need an operator depending on where the weakest link exists. Sometimes marketplaces can include very complex inventory management requirements, so if most of your business is on Amazon, for example, and you expect that channel to continue driving most of your growth, then you might determine that what you really need is a strong operator on your team. Indeed, whichever direction you go in, each of these hires needs to truly “own” their roles. As owner of the business, you would serve as a sort of GM providing strategic direction so that everyone keeps their eye on the prize.

Usually the next priority, after marketing, is for someone to update the website with the latest products and content and to optimize images to attract customers visually. A typical title for this person is Website Manager.

If your business has a large number of SKU’s, an online merchandiser might be next in line, although in many smaller ecommerce businesses merchandising is often handled by the owner (or one of the owners if co-owned). Many of the owners I have worked with over the years started their businesses based on product knowledge, so merchandisers don’t often enter the equation until SKU counts get to the point where the amount of work requires a stand alone position. In more established dot coms, I’ve seen web merchandising and web merchandise buyers report up to either ecommerce or the top business leader/owner/President. For multichannel retailers, a merchandising manager on the ecommerce team (or Director depending on the size) will serve as that product voice for the web business with dotted relationships with merchants on the retail side to make sure both sides are aligned on strategy, seasonality, stories, etc.

In the world of ecommerce, it’s all about testing and learning. You test different campaigns, see what works. At the end of the day, growing your ecommerce team is really no different. Start with 5 or 10 different campaigns to build your business case for scaling the team. See which campaigns scale better than others. Segment your customer file and swipe it in 30 different directions. Let’s say you discover that retention is a major growth driver. How would you go after that- email, customer service, paid media ? What percentage of revenue is coming in through which channel? A recent call from a new client was a perfect example of doing it backwards. His roadmap was channel based and he discovered he had specialists overseeing channels that simply were not drivers for the business. The important thing is to start at the customer level and then determine which channels should get the resources.

Rounding Out the Ecommerce Organizational Structure

When a pure play ecommerce business reaches rougly up to $25-30M range, it’s not unusual to have as many as 15 or 20 employees/contractors covering additional key functions, including many of the following key categories:

• Merchandising
• Customer Service
• Marketing
• Email
• Paid Acquisition
• Organic Search
• Content
• Optimization
• Management & Leadership
• Technology / Product Management
• Developers
• Designers
• User Experience
• Fulfillment (Shipping, Returns)

As-needed specialized expertise is often outsourced, and it has been my experience that many of these functions can usually be covered by outside contractors, with the notable exceptions of Management & Leadership, Product Management, Merchandising, Purchasing and Fulfillment. These areas often require a higher degree of cross-functional internal interaction, and most of my clients who reach this size will hire these roles on a full-time permanent basis. I encourage clients to in-source whatever they view as strategic, that is, when a compelling rationale can be drawn for hiring talent in-house for work that could yield a competitive advantage. After all, “renting” the same team as your industry peers yields little competitive advantage. That being said, hiring a consultant or agency that has unique and specialized knowledge or capabilities can create significant value by compressing the learning curve or producing exceptional work that simply can’t be done in-house. Sometimes the need to go outside is also driven by the realities of the labor pool. Some positions, most notably paid media and Amazon specialists, are especially difficult to fill.  And even if you’re lucky enough to hire a good one, it’s hard to keep them because of the sheer abundance of opportunities that are out there. Plus, many of these individuals have shifted from full-time positions to contract. As freelancers, they not only can make more money but they can work pretty much anywhere they wish.

Omni-channel retailers and other businesses marketing through multiple channels that want to devote some focus to ecommerce but can’t yet justify the funds to dedicate the desired level of support often designate other staff to take on ecommerce-related duties in addition to their other primary responsibilities. This approach is most common at the account level, particularly for omni-channel retailers that already have a dedicated account team in place.

If you’re going to commit to supporting retailers other than Amazon, you need to have the right staffing model to do it. You should assign one person to each account or dedicate somebody to support “all other” brick-and-mortar dotcoms. That simply means rather than making digital 20% of one person’s job at each of five customer accounts, make supporting five retailers 100% of one person’s job. Most consumer marketing clients I have worked with who market largely through Amazon have a dedicated in-house Amazon account specialist. The bigger corporations often co-locate these positions in Seattle where Amazon’s account managers are based.

As the channel matures and volume grows, hiring priorities will develop as operational weaknesses become more evident and the channels, platforms and strategies that are most effective at driving that growth emerge. Perhaps your weakest link is in sourcing products, or maybe it’s in customer acquisition or on-site conversion. The amount of work and time required to fill those gaps will determine whether you need to make an internal full-time hire or go with an outside vendor.

In midsize and large scale ecommerce businesses, each of these areas can become stand alone departments of their own with a Manager or Director of Ecommerce, Digital Marketing or similar function as department head, reporting up to a Director, VP or even a SVP. Some companies I’ve worked with have dissolved their centralized marketing technology departments, and instead have distributed these specialists among individual teams. The resulting structure has served to reinforce the cultural shift from reporting to respective departments to sharing responsibility for a team and leveraging expertise where it is needed. These teams are measured by the success of the product or service, and I’ve observed that incentives that reinforce this type of more collaborative culture can often lead to a surge in new ideas by newly empowered employees.

Here is an ecommerce organizational structure for one of my clients with a well-developed ecommerce business generating $50-100M in annual sales:

A few important observations as you review this chart. This is more representative of a B2C (or D2C) marketing organization versus B2B (this structure does not include sales enablement, as an example). Some of these roles are specialty positions that were initially outsourced and later brought in house. Also, note that this particular organization includes a Director of Retention. An internal CRM team is more typical in businesses that have a heavy focus on subscription, loyalty, membership and the like, and have systems and processes in place for collecting and segmenting customer data.

Here is an org chart for a $30M Etsy-like consumer products ecommerce business that sells through retail, online marketplaces plus its own DtoC website, with multiple positions to fill (the Marketing Director will oversee the DtoC ecommerce business only)

Writing job descriptions for these roles is a whole other discussion, but I have that covered for you. For starters, check out my article on job description tips from the trenches. Also, my ecommerce career guide goes into much more detail on exactly what to look for when hiring candidates for the most common digital commerce roles, along with sample job descriptions.

Aligning Ecommerce With Overall Company Structure

As the org chart example above shows, ecommerce rolls up under marketing, and as you’d expect that is typical for organizations that have a marketing leader. Sometimes I am asked if ecommerce should be a stand-alone unit, separate from marketing, sales or operations. That structure seems to work best with smaller and mid-sized ecommerce “pure plays” where the entire function reports up to a President, CEO or an owner (s). However, in larger media and consumer product companies, it is not uncommon to find ecommerce within brand management, integrated marketing or even media. A classic example of this would be a large consumer package goods company such as a Procter & Gamble. Some of these bigger CPG’ers can have dozens of ecommerce teams supporting a large number of brands and brand categories. Then there are businesses like Sephora, who have combined the retail and online teams to create a sort of “Digital Center of Excellence,” a centralized swat team, as it were, which has transformed the way they look at customers across channels.

Here’s another example of an ecommerce organizational structure with an ecommerce team led by merchandising, marketing and operations:

Finally, here is an example of an ecommerce organizational structure with a client which is a branded manufacturer specializing in women’s apparel. They launched their web business about two years ago and with my help have built a very capable merchandising and marketing team while going outside for their development work. They have one website that grosses approximately $10M per year:

I’ve had owners ask me about Product Development and whether that should be a stand alone position. Perhaps in a larger business, yes, but definitely not in a smaller ecommerce environment. That’s because with smaller businesses, successful business innovation almost always falls under the governance of the owner or President. Also, product development is  more of a classic, highly strategic cross-functional process that requires the input of multiple internal teams and requires the direction of a top leader to keep everyone engaged.

Multiple Brands

Often I’m asked by business operators or owners how they should structure their ecommerce department around multiple brands. Whether those brands currently exist or they’re on the product drawing board, they want to know: At what point does it makes sense to stand up separate digital commerce teams to support the individual brands? There is no “one size fits all” answer to this question because like so many other things in ecommerce there can be many variables, and those variables can become… well, even more variable over time.

In large multinationals (think P&G, Unilever and Coca-Cola) the digital commerce teams have a wide variety of functions and granular specialties. In those environments, Email Marketing, SEO/SEM, Social Media Marketing, Creative and Design and other digital marketing functions have separate teams responsible for each of the different brands or business units. Some of these companies literally have dozens of internal ecommerce groups overseeing the online businesses of their major brands or product categories.

But what about smaller organizations?

When a business is marketing distinctly branded products (often with their own branded websites), it’s inevitable that some of the brands are going to sell better than others, so they will demand more immediate resources. But before you expand the org chart to accommodate brand or product-specific ecommerce teams, the P and L for each category needs to justify it. And that usually doesn’t happen until revenues being generated by each of the brand or product categories reach a substantial size. At that point, many businesses will name Brand or Category Managers to run P and L over each of the brands- sort of a mini-GM. They, in turn, typically report up to a head of marketing. These brand/category managers may or may not have strong digital commerce backgrounds. If they don’t, then the existing ecommerce department becomes a sort of “Center of Excellence” supporting each of the brands and will expand its capabilities as the brands grow and demand more resources. If a Brand or Category Manager comes to the business with a background in ecommerce, that’s even better. They can oversee the duties that require more concentrated ecommerce expertise in addition to brand marketing and category management. As an example, I recently worked with a client that had three brands under their corporate umbrella, but one of the brands accounted for nearly 80% of the business, and email was a huge driver for brand retention. In that particular case, because of the size of the business (more than $50M), it made sense to hire an emailer dedicated to that particular brand. For the other brands, email fell under an ecommerce manager who supported the other smaller brands, along with social media and paid search (which was outsourced).

The best advice I can give any owner or operator is to not get too far ahead of yourself when it comes to organizational planning. Before different brands or categories are even ready for market, leaders tend to think about organizational structures one year, two years and even five years down the road. I can guarantee you that whatever plans most ecommerce businesses had in 2020 will hit the shredder because of the unexpected impact of the pandemic.

The pandemic also had an outsized impact on the location of jobs in the ecommerce organizational chart. We all know how COVID-19 has turned the traditional work model upside down, and ecommerce has been among those business categories leading the way in that transition. That’s partly because a portion of ecommerce work was already being done remotely before the pandemic hit, particularly in areas such as paid search, SEO, social and email that are heavy individual contributor roles that can be done from pretty much anywhere. When everything shifted off-site, workers became acclimated to remote work, and now according to a number of surveys I’ve seen, 40-50% won’t even look at a job unless it has some sort of remote or hybrid arrangement. That has major implications for any business that operates under a high level of collaboration among team members, which of course is a hallmark of ecommerce and digital marketing. When it comes to more senior level, transformational type positions either newly created or back-fills, I lean heavily towards the camp that says they should work mostly on-site. Most of the businesses I work with seem to agree, and are opting to keep these mission critical positions in-office with a hybrid option of maybe 1 or 2 days off-site.

Key Takeaways

-Start with strategy, then build the ecommerce organizational structure around it. It’s important that everyone in the company is on the same page and working towards the same goals regarding the firm’s commitment to ecommerce and its definition of success. So, first things first: Define the strategy up front and communicate it internally. Only then will budgeting and resourcing around ecommerce fall into place with everyone in the organization understanding it, and feeling some level of ownership and involvement.

-Set up high level goals including KPI’s and a roadmap. Review the roadmap every 3 to 6 months. Start small and work your way to the top, step by step. Either someone within the existing management team should take responsibility over ecommerce, or you should hire a Manager or Director to do that. I usually advise against contracting this most critical role.

-Dedicated resources are generally better than designated resources. Some omni-channel companies that are relatively new to ecommerce assign responsibility for ecommerce to leaders or teams that carry other core responsibilities. When work becomes crucial to driving performance, it deserves someone who is a dedicated specialist. Then, as the business scales and volume grows, more dedicated resources can be added.

-As commitment increases, positions become more specialized. Performing at high levels requires expertise and specialized tools. Consequently, industry leaders are increasingly dedicating people in specialist roles to ensure that important work gets done right at the right level. It’s important to identify gaps in your ecommerce teams and where specialists may be needed to round out your ecommere organizational structure. Ask yourself: In terms of skills and competencies of our current ecommerce team, where are we strongest  where are we weakest? Where are we focusing right now to grow the business? What’s working and what isn’t? Are there big, clear areas that need attention? Your ecommerce structure should start at the CUSTOMER level, not channels.

For a complete guide on how stand up a B2B ecommerce business, there is no better book than Brian Becker’s “Billion Dollar B2B Ecommerce.” It will tell you everything you need to know!

There’s also social media. Not a lot more needs to be said here, except think of every customer interaction as an interaction with a potential candidate. “We’re growing- rock stars wanted” could be a nice tag to your signature line. It also sends a message to your clients that you hire only the best.

LinkedIn Groups are an often overlooked resource for talent. There are literally hundreds of thousands of them, and I can practically guarantee there is a Group out there that focuses on whatever specific role you need filled. You’re also given a monthly allotment of free messages to other group members. You should take full advantage of that. Few employers do.

Targeted paid ads can also be effective. This is where platforms like Facebook become particular attractive because you can get your job posts right into the feeds of those who most closely match the criteria you are looking for such as job skills, location and even outside interests. Here’s a terrific article I found that will tell you all you need to know when it comes to recruiting on Faceboook: https://www.wordstream.com/blog/ws/2016/08/23/facebook-recruiting. There are also a ton of specialized job boards to help you find everything from developers to designers, full-time as well as contract, on-site as well as remote.

Final Thoughts

For business owners who haven’t hired large staffs before, I have one golden rule: Hire specialists who are smarter than you in their particular field. You’re running the overall business. You’re providing the vision and top level leadership. Look for people who challenge the status quo, who challenge deep rooted assumptions, who counter your explanation that “this is way we’ve always done things.” THAT’s how you build a high performance ecommerce business!

There are literally a hundred job functions under the category of digital commerce. If you’re looking to fill one of these specialized roles and would like a sample JD, I have plenty of them- many of them I wrote, others supplied by clients. Just drop me an email and I’ll be happy to send one to you. My direct email address is jerry@bernhart.com. Or, feel free to call me direct at 507-451-4270 and let’s talk about your organization, and where you want to take it.