channeladvisor evaluation
DESCRIPTION
An Evaluation of the ChannelAdvisor SolutionTRANSCRIPT
ChannelAdvisorBrad Vetter
VP & GM, Ecommerce & Direct to Consumer
ChannelAdvisorAgenda
Background – Brad Vetter
ChannelAdvisor
• Selection Process
• Why ChannelAdvisor?
• How we use ChannelAdvisor
• The Good and the Bad
Pricing & ROI
Competitive Environment
• Mercent
• Amazon
• The Platforms
• Systems Integrators & Others
Opportunities & Growth
• Global Commerce
• Fulfillment
Q&A
BRAD VETTER
BACKGROUND – BRAD VETTERECOMMERCE EXEC – 15 YEARS
1999 to 2005 – Dell.com• Bigger than Amazon - #1• Profitable – Maybe the only one
2005 to 2009 – Independent Consultant• Platforms – Demandware, ATG, WebSphere,
Magento, Hybris• 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
2012 to Present – VP & GM, Ecommerce, Kraco• Building a new business for a SUN Capital
Partners portfolio company
Selection Process
KRACO ENTERPRISES – SELECTION PROCESS
What did we need to do?Integrated Marketing Plan
Channel Strategy / Tactic
Paid SearchTransactional marketing. Bottom of the sales funnel engagement.
Display Ads Awareness campaigns. Top of the sales funnel engagement.
MarketplacesTransactional marketing. Bottom of the sales funnel engagement.
Comparison ShoppingTransactional marketing. Bottom of the sales funnel engagement.
Affiliate ProgramTransactional and Awareness campaigns to facilitate current and future sales.
SocialListen and engage consumers looking for floor liners or unhappy with what they have.
EmailTransactional and Awareness campaigns to facilitate current and future sales.
Video Ads Awareness campaigns. Top of the sales funnel engagement.
KRACO ENTERPRISES – SELECTION PROCESS
Mercent vs. ChannelAdvisor
• Pricing
• IR 500 – ChannelAdvisor had 50% more - Experience
• Automotive Experiencehttp://www.channeladvisor.com/press/channeladvisor-signs-26-new-automotive-retailers-seeking-e-commerce-success/
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
KRACO ENTERPRISES – SELECTION PROCESS
Model - Current
Source: ChannelAdvisor.com
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?
Pricing and ROI
GMV
PRICING AND ROI
GMV - Monthly
Feb March April May June July Aug Sept Oct Nov Dec Jan Feb March0
5000
10000
15000
20000
25000
30000
0.00%
1.00%
2.00%
3.00%
4.00%
5.00%
6.00%
7.00%
GMV Min GMV Actual Unit Cost
PRICING AND ROI
Unit Economics - Amazon
Category 1 Category 2 Category 3 CustomSale Price $23.34 $10.18 $31.08 $165.24Net Sales Price $22.23 $9.98 $29.60 $162.00Units 32,000 156,000 41,000 2,500 Sales $711,360 $1,556,880 $1,213,600 $405,000COGS $590,429 83% $965,266 62% $849,520 70% $162,000 40%Marketing $92,477 13% $202,394 13% $157,768 13% $52,650 13%ChannelAdvisor $32,011 4.5% $70,060 4.5% $54,612 4.5% $18,225 4.5%
Adj Gross Margin ($3,557) 0% $319,160 21% $151,700 13% $172,125 43%
How do I increase my contribution?
Competitive Environment
COMPETITIVE ENVIRONMENT
Mercent
• Marketplace Integration• CSE’s• PLA’s• Paid Search• Price Optimization• Managed Services
Source: Mercent - http://www.mercent.com/why-mercent/differentiated-technology
1.Pricing2.Industry Experience
COMPETITIVE ENVIRONMENT
Amazon - Automation
1. Product Feed2. Relationship Feed3. Product Images Feed4. Pricing Feed5. Inventory Feed6. Shipping override feed7. Order Acknowledgment Feed8. Order Fulfillment Feed
Amazon.com Google All other channels
% of Total ChannelAdvisor GMV
64% 18% 18%
Average Order Value $24 $73 $41
Cost of Sales % 17.5% 21% 22%
Do you need ChannelAdvisor?
COMPETITIVE ENVIRONMENT
Ecommerce Platforms
Platform Differentiation
Will it kill or consume ChannelAdvisor?
Opportunities and Growth
OPPORTUNITIES AND GROWTH
International
Q&AChannelAdvisor – Brad Vetter