ChannelAdvisor make a profit and reorg for future

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ChannelAdvisor are reducing their global workforce by 19%, at the same time as announcing that they reached operating profitability in the fourth quarter of 2008.

Since their last reorganisation in September, at which time they received their final round of investment, the downturn in the economy has worsened and Scot Wingo explained “The restructuring steps we’re taking are designed to better position the company for potentially deteriorating macro economic conditions. These steps will lower our overall operating costs and enable us to weather the current economic storm.”

Scot told us that they intend to put resources into support (it’s easier to keep a customer than to win a new one) and that engineering will also be key, which tends to suggest that the sales teams will bear the brunt of cut backs. They will however continue to maintain an office to support their customers in the UK.

Interestingly Scot also said that ChannelAdvisor will stay current with eBay but not innovate around the platform – focus will be on other routes to market, where the growth is, such as Amazon and Google (who announced their 2008 Q4 results yesterday up 18%).

ChannelAdvisor had $10m revenue in Q4 2008 which was the first quarter of profitability since it was founded in 2001. They currently process $2.6 billion in sales per year on behalf of their merchants.

17 Responses

  1. #1 There is indeed, although I can’t find it on the CA website as of yet….


    Leading provider of e-commerce channel management solutions has solid fourth quarter growth despite tough economic backdrop

    Research Triangle Park, NC– January 23, 2009 – ChannelAdvisor, the leading provider of e-commerce channel management solutions, announced today that it reached operating profitability in the fourth quarter of 2008. Additionally the company plans to undertake restructuring to further streamline its business and better position itself for an uncertain economic downturn.

    In the fourth quarter of 2008, ChannelAdvisor recorded gross merchandise value (GMV) of $775 million and for the full year, ChannelAdvisor recorded GMV of $2.6 billion. This represents 34% growth in GMV from 2007. Additionally, the company continues to experience strong customer growth, now boasting more than 110 top internet retailers from the prestigious Internet Retailer magazine’s Top 500 list. <> Over the last year, the average ChannelAdvisor customer’s sales grew at 7% while eCommerce grew at 4% proving that retailers continue to find great value from ChannelAdvisor’s solutions during this economic slowdown.

    In the fourth quarter of 2008, ChannelAdvisor recorded revenue of over $10 million and for the full year, ChannelAdvisor recorded revenue of over $35 million. This represents 44% growth in revenue from 2007. Even in this challenging economic environment, ChannelAdvisor reached operating profitability in the fourth quarter of 2008 and will continue to see growth, reach goals and strengthen their position as an industry leader.

    ChannelAdvisor plans to undertake changes geared to optimize its workforce, facilities and products in order to adjust to the current economy while positioning to leverage future growth in 2009. As part of the changes, ChannelAdvisor is reducing its global workforce by 19%. Those whose jobs will be eliminated will be offered severance.

    “ChannnelAdvisor had a solid quarter and we will continue to focus on profitability and growth in 2009,” said Scot Wingo, Chief Executive Officer of ChannelAdvisor. “The restructuring steps we’re taking are designed to better position the company for potentially deteriorating macro economic conditions. These steps will lower our overall operating costs and enable us to weather the current economic storm.”

    About ChannelAdvisor Corporation
    ChannelAdvisor Corporation provides technology and services that enable leading online retailers to maximize their products across multiple ecommerce marketplaces such as eBay, and, comparison shopping engines such as, Shopzilla, Nextag and Google Product Search and search engines such as Google, Yahoo! and MSN. In 2008, ChannelAdvisor managed over $2.6 billion in gross merchandise value (GMV) on behalf of its customers. ChannelAdvisor solutions combine best practices, on-demand software and integration technology to help retailers sell more products, faster, by automating labor-intensive, manual functions so they spend less time optimizing campaigns and more time solving marketing and business issues. ChannelAdvisor has expanded its retail technology and services by acquiring Rich FX media solutions. MyRichFX™, RichImage™, RichCatalog™, and RichCircular™ are now part of the ChannelAdvisor rich media technology and service solutions that ChannelAdvisor offers. ChannelAdvisor’s customers include GSI Commerce, Brookstone, Abebooks and Motorola. ChannelAdvisor Corporation is headquartered in Research Triangle Park, NC with offices in Atlanta, Seattle, New York, the United Kingdom, Australia, Ireland and Germany. For more information, visit

  2. #3 I think it’s more likely that the release only went out at midnight their time and it’s the first press release of 2009. Rather than just adding it to the site someone’s gotta create a whole new webpage for 2009 and archive all the 2008 releases 😉

  3. I am a user of ChannelAdvisor’s MarketplaceAdvisor (the former MarketWorks platform) overall I am happy with the solution.

    My main criticism is that the vast majority of support and development goes into the MarketplaceAdvisor Premium platform, it seems the intention is to ‘encourage’ user to upgrade to the much more expensive platform. Most big sellers were once a small/medium size seller and as Scot said “it’s easier to keep a customer than to win a new one” greater support should be given to the MarketplaceAdvisor platform to help sellers grow. It is good to hear that they intend to put resources into support, as there was a dramatic cut in the levels of support when MarketWorks was taken over, particularly in the UK.

    A mistake was made when support for Amazon was removed to focus 100% on eBay but later this decision was reversed, support for Amazon does need improving, the integration is very limited.

    A concern is they will not ‘innovate’ around the eBay platform. Currently there is not a facility for updating the quantity available on live fixed price listings, clearly with ‘best match’ this is essential. Claiming to be a multi channel solution the provision of automated updating is essential to allow inventory to be split between marketplaces. If as I do, updates are made to quantities directly through eBay to prevent sales history being lost, my inventory levels become corrupted.

    I will be interested to see how they will respond to the removal of support for third party checkouts on eBay. I have turned off the facility of checkout redirect as customers prefer the eBay checkout. So in actual fact I am paying for a service that I don’t fully use, however with images hosted there it is difficult to migrate to another solution. Maybe not all users will be as lazy as me?

  4. #5 Scot certainly didn’t give the impression that they’d stop developing for eBay so I’d still expect to see updates for fixes and changes as the eBay site changes. What he did say was that while eBay’s figures are stagnating it makes sense to put the main development focus onto sites like Amazon and Google as ultimately merchants will see most growth from sites which are growing faster than ecommerce as a whole.

    Bit of luck eBay’ll turn the corner and growth will accelerate again and reverse the trend, but who knows?

  5. Effective support for Amazon will differentiate them from other Auction management solutions. Personally Amazon is the most important to me and has and continues to grow the fastest but with the arrival of low or no margin sellers and the low price high postage sellers not sure this will continue. Though eBay is the most time-consuming.

  6. the average ChannelAdvisor customer’s sales grew at 7% while eCommerce grew at 4% proving that retailers continue to find great value from ChannelAdvisor’s solutions during this economic slowdown.’

    Is anyone buying this? I have not seen any figures that describe growth in eCommerce retail as being less than double figures and the most recent BRC figures Nov to Nov growth are at 9.5% and December 07 to December 08 growth at 30%…

    If eCommerce traders are not matching these growth rates they are going backwards, these are the benchmarks to measure yourself against not 4% or 7%!

  7. @Matt D
    Overall US spending was *down* 3% –

    “For an online holiday shopping season that recorded a disappointing 3-percent decline in sales, a positive note is that e-commerce trends outperformed overall consumer spending in several product categories, which is to say that e-commerce continued to capture an increasing share of consumers’ wallet,” said comScore chairman Gian Fulgoni.

  8. Never mind developing stuff they need to get the basics right like customer service, which is awful, nearly as bad as ebay themselves!

  9. I would love to know when Channel Advisor are going to refund my £350 which they promised in November. I would never recommend these people …they get you to sign up to a 12 month contract and the software in my opinion is near on impossible to learn / master within at least 3 months (all of couse is never explained upfront).

  10. This is tony, ebay names accessoires_nextday and discounsatnav

    Ive meet a few of you at ebay Uni and channel advisors insite and catalyst.

    I am very disappointed. By this. I have used other ebay tools and recently switched from eseller pro to channel advisor. I am finding the level of support and staff help from channel advisor very very poor. There product is very good but the current level of support for it is not good in my opinion . I raised a high level support ticket 48 hours ago on channel advisor the issue is still not yet fixed, the team as seller pro would have had the issue fixed in under an hour.

    With so little staff support as it it ( or this is the way it feels to me) I worried they are going to loss business. This is not a good move if you ask me…. Or did they mention discounting rates? And dropping prices?…….

  11. Good to hear John that I am not the only one that has had the problem with them and they to still owe me over £500 that I am not likely to see unless I take court action.

    They were quick to sell the system to me, but then it turned out I needed to upgrade to the “better” premium account to do what I wanted to and this was going to cost £1000’s more. Then there was no help and no contact back for weeks ahead, I even wrote to James Scott who never did respond!

    I am sure there system works but they need to seriously buck up their ideas with customer service! If anyone does think about signing up with them, make sure it’s right and make sure you get at least 1 months trial with no tie in.

  12. I tried ChannelAdvisor and cancelled within days, and lost £500 in the process. Maybe I should have asked a few more questions and got clarity about some of the functionality. Unfortunately this will never be established because I can not afford the risk of civil action. The product still looks good, but when you add up the monthly fees and their commission on your sales, you have to ask the question “Are they worth it?” Clearly there are sellers who benefit from being with ChannelAdvisor, and I say good luck to them. Even having been burnt once I would still consider going back to them if they were less rigid in their attitude to sellers. I signed a company to company contact and lost £500 in the process. My Mistake = Their Profit. In law they may well be right, but as a newly formed company it wasn’t the right time to sign, and they were unforgiving. So don’t let me put you off ChannelAdvisor – but read the SMALL PRINT.
    Shame really because NOW is the right time – but I honestly don’t feel I can do business with them based on this previous experience.

  13. I love ChannelAdvisor. I really do, but with over 3 years experience with nearly 50 customers I can run an account blindfolded, typing with my nose. An advantage I get paid for nowadays.

    I have never had a long response for support, account management yes but I don’t know if my recent account manager has had the chop or not! I would not begrudge the lack of response if he has.

  14. “Scot told us that they intend to put resources into support (it’s easier to keep a customer than to win a new one)”

    Ha Ha Ha Ha Ha Ha Ha……

    Until now Harry Hill’s TV Burp made me laugh more than anything but that quote takes the biscuit!

    CA is a good platform if you are selling volume & want to grow as we do, but the support & promised (contracted) selling strategy support is non existent.

    I do find myself looking at the invoice every month thinking “exactly what are we paying for?”

    Our yearly turnover has gone from zero in 2005 to a projected half million this year. Sales are still growing rapidly despite the recession and yet we get no contact at all!


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