ChannelAdvisor Evaluation

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An Evaluation of the ChannelAdvisor Solution

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  • I needed help managing all my digital marketing channels without hiring a farm of people.
  • Its all about GMV to ChannelAdvisor. So I will show them what this looks like from the customer’s perspective.
  • This is a blended structure for managed paid search and marketplaces. On a relative GMV scale not actual.I will talk to the actual cost to the customer and how the pricing model affect not only the cost to the customer but how CA’s focus on monthly GMV affect their motivation and behaivor and how this can have both a negative and positive outcome to the customer
  • If I look at my digital marketing expense and ChannelAdvisor fees as variable cost of sales and not G&A, how do I improve my contribution to the business? What can I possibly control? It looks like I need to find a way to automate my catalog feed to Amazon.
  • The 6 bullet points are what 90% of their customers care about. And from the evaluation that we did and have done, there is little or no differentiation between the two platforms.On the Mercent website they list the Differentiators and Capabilities and it really doesn’t say anything.At the end of the day, it comes down to pricing and industry experience
  • Amazon is becoming such a big component of the overall ChannelAdvisor sales mix… If you automate this, can everything else be done manually or semi-manually
  • I have a real hard time believing that the platform vendors won’t staring incorporating marketplace and CSE feed automation directly into their platforms. Some already have but this is probably the biggest threat to CA and the biggest win for the platform customers.
  • If you can easily get me into these markets through localized marketplaces…. I would be very interested.
  • ChannelAdvisor Evaluation

    1. 1. ChannelAdvisor Brad Vetter VP & GM, Ecommerce & Direct to Consumer
    2. 2. Background – Brad Vetter ChannelAdvisor • Selection Process • Why ChannelAdvisor? • How we use ChannelAdvisor • The Good and the Bad Pricing & ROI BRAD VETTER ChannelAdvisor Agenda Competitive Environment • Mercent • Amazon • The Platforms • Systems Integrators & Others Opportunities & Growth • • Q&A Global Commerce Fulfillment
    3. 3. 1999 to 2005 – Dell.com • Bigger than Amazon - #1 • Profitable – Maybe the only one BACKGROUND – BRAD VETTER ECOMMERCE EXEC – 15 YEARS 2005 to 2009 – Independent Consultant • Platforms – Demandware, ATG, WebSphere, Magento, Hybr is • Agencies – Razorfish, Critical Mass, Lyons, Guidance, Sapient, Acquity • Vendors – ChannelAdvisor, Certona… • Companies – Lifetime Brands, J. Hilburn, Hyatt, Orbitz, United Airlines, Trek Bicycles… 2009 to 2010 – VP – Business Development, Invodo • Partnerships – Demandware, ATG, Razorfish, Hybris, Rich Relevance, PFSWeb… 2010 to 2012 – General Manager for a Top 100 Internet Retailer, Zones
    4. 4. Selection Process
    5. 5. KRACO ENTERPRISES – SELECTION PROCESS What did we need to do? Integrated Marketing Plan Channel Strategy / Tactic Paid Search Transactional marketing. Bottom of the sales funnel engagement. Display Ads Awareness campaigns. Top of the sales funnel engagement. Marketplaces Transactional marketing. Bottom of the sales funnel engagement. Comparison Shopping Transactional marketing. Bottom of the sales funnel engagement. Affiliate Program Transactional and Awareness campaigns to facilitate current and future sales. Social Listen and engage consumers looking for floor liners or unhappy with what they have. Email Transactional and Awareness campaigns to facilitate current and future sales. Video Ads Awareness campaigns. Top of the sales funnel engagement.
    6. 6. KRACO ENTERPRISES – SELECTION PROCESS Why ChannelAdvisor? ChannelAdvisor Mercent Magento Marketplace Integration YES YES NO CSE Feeds YES YES Limited Paid Search and PLA management YES YES Limited Managed Services YES YES NO Mercent vs. ChannelAdvisor • Pricing • IR 500 – ChannelAdvisor had 50% more - Experience • Automotive Experience http://www.channeladvisor.com/press/channeladvisor-signs-26-new-automotive-retailers-seeking-e-commercesuccess/
    7. 7. KRACO ENTERPRISES – SELECTION PROCESS Model - Current Source: ChannelAdvisor.com
    8. 8. KRACO ENTERPRISES – SELECTION PROCESS How is it going? Marketplaces - Amazon & EBay Excellent knowledge of the Channel Comparison Shopping Hands Free, No hassle Paid Search and Google PLA Not completely satisfied. Channel Knowledge vs. Customer/Product Knowledge • Marketplaces & CSE’s – Channel • Paid Search – Customer/Product GMV Incentives correct for the GDN and Video Ads • Awareness campaigns – All work, no money?
    9. 9. GMV Pricing and ROI
    10. 10. PRICING AND ROI GMV - Monthly 30000 7.00% 6.00% 25000 5.00% 20000 4.00% 15000 3.00% 10000 2.00% 5000 1.00% 0 0.00% Feb March April May June July GMV Min Aug Sept GMV Actual Oct Nov Unit Cost Dec Jan Feb March
    11. 11. PRICING AND ROI Unit Economics - Amazon Sale Price Net Sales Price Units Sales COGS Marketing ChannelAdvisor Adj Gross Margin Category 1 $23.34 $22.23 32,000 $711,360 $590,429 $92,477 $32,011 83% 13% 4.5% ($3,557) 0% Category 2 $10.18 $9.98 156,000 $1,556,880 $965,266 $202,394 $70,060 $319,160 62% 13% 4.5% Category 3 $31.08 $29.60 41,000 $1,213,600 $849,520 $157,768 $54,612 21% $151,700 How do I increase my contribution? 70% 13% 4.5% Custom $165.24 $162.00 2,500 $405,000 $162,000 $52,650 $18,225 40% 13% 4.5% 13% $172,125 43%
    12. 12. Competitive Environment
    13. 13. COMPETITIVE ENVIRONMENT Mercent • • • • • • Marketplace Integration CSE’s PLA’s Paid Search Price Optimization Managed Services 1.Pricing 2.Industry Experience Source: Mercent - http://www.mercent.com/why-mercent/differentiated-technology
    14. 14. COMPETITIVE ENVIRONMENT Amazon - Automation Amazon.com Google All other channels % of Total ChannelAdvisor GMV 64% 18% 18% Average Order Value $24 $73 $41 17.5% 21% 22% Cost of Sales % 1. Product Feed 2. Relationship Feed 3. Product Images Feed 4. Pricing Feed 5. Inventory Feed 6. Shipping override feed 7. Order Acknowledgment Feed 8. Order Fulfillment Feed Do you need ChannelAdvisor?
    15. 15. COMPETITIVE ENVIRONMENT Ecommerce Platforms Platform Differentiation Will it kill or consume ChannelAdvisor?
    16. 16. Opportunities and Growth
    17. 17. OPPORTUNITIES AND GROWTH International
    18. 18. Q&A ChannelAdvisor – Brad Vetter

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