The document summarizes plans for Jupiter Television (JTV) to expand its sales through third-party online marketplaces like eBay, Amazon, and Buy.com. Key points: - JTV will use the Channel Advisor platform to automate listing and sales across multiple marketplaces. - Over time, JTV plans to increase its monthly listings from 1,100 to 15,000 across eBay, Amazon, Buy.com and potentially other sites. - Financial projections estimate this could increase annual gross sales from around $150,000 currently to over $8 million within 2 years, while maintaining mostly variable costs.

1. E-Commerce Team Meeting,
2/17/2012

2. “The driver of Amazon’s profit is its Marketplace.”
“Amazon reports that these products are 34% of all units sold on the website.”
“Companies such as Buy.com and Walmart have introduced marketplaces, and we anticipate others in
verticals such as apparel, toys, and sporting goods will follow suit. This strategy will help them
retain some of the market share they may otherwise lose to Amazon.”
Sucharita Mulpuru, Vice President, Principal Analyst,
Forrester Research, Inc. Forrester’s “Five eCommerce
Trends to Watch in 2011”

3. eBay is…
 Brands
 Fixed-Price
 Large Merchants

5. The Vision
 We will create a whole new selling channel, called the “3PV Marketplace
Channel”.
 The “vision” is about “Extending The Reach”. We are targeting
customers who otherwise would not have shopped at JTV.com or our
TV shows
 Incremental sales is a secondary mission; it’s not primarily a sales
channel, because we’re not actively encouraging repeat sales on eBay
and other sites.
 JTVonline is NOT just for liquidation product!

6. New Customers

New customers will come
from various marketplaces

Some of them will
subsequently purchase from
JTV.com because of:
• Selection
• Promos
• Content
• Financing

W expect that over 60% of
e
our marketplace customers
will have no history in Jupiter
#170 on Internet Retailer 500 List

7. #1 on Internet Retailer 500 List

8. #6 on Internet Retailer 500 List

9. #7 on Internet Retailer 500 List

10. #12 on Internet Retailer 500 List

11. #27 on Internet Retailer 500 List

12. #32 on Internet Retailer 500 List

13. New Customers
 Our listings and store presence clearly show who we are
 Our packages go out with current marketing materials (collateral)
 We include discount codes for JTV.com to encourage subsequent purchases
from JTV rather than eBay, Amazon, etc.
 Our expectation for the long-term is that over 60% of “Marketplace” customers
will be new to JTV
 In the future, we can sell Gift Cards on eBay for JTV.com

14. Learning
 We now have meaningful
experience in selling on eBay
 We’ve learned from past
mistakes in selling on
Amazon
 We have been running a very
successful pilot program since
June, 2010.

15. Top-Rated Seller
 Achieving and maintaining this
designation is a Critical Success Factor (3
main reasons)
 We are carefully cultivating a positive
reputation on eBay
 Every customer sees this on every
product details page. This helps us gain
credibility and trust, and helps us build a
brand

16. Top-Rated Seller
“★`*•.¸*•¸★ Great Seller! Super Fast Shipping! Thank you!
★¸•*¸.•*★“
“Man what a buy and service-WOW!!! Will buy again, Thanks !!!”
“100% Perfect Transaction.....Recommend to All.....Thanks
jtvonline”

17. Financial
Assumptions
Pro Forma
NR and GM Items
Average Selling Price
Product Markup %
Average Monthly Listings on Ebay
Average Monthly Listings on Amazon
Average Monthly Listings on Buy.com
Return Rate % (by revenue)
Shipping Income per Order
Outbound Shipping Cost per Order
Operational Handling Cost per Order
Sales/Listings Ratio
Fees Expense
Final Value Fee Ebay (variable)
Final Value Fee Amazon (variable)
Final Value Fee Buy.com (variable)
Listing Fee (variable)
Monthly Ebay Subscription Fee (fixed)
Paypal Fee (variable)
Salaries and Wages Expense
% of VBM's Time
VBM Expense
Number of monthly listings per worker
Number of Workers (calculated)
Average Annual Worker Salary
Annual Cost of Workers
General and Administrative Expense
Annual Fixed Channel Advisor Fees
% of Gross Revenue paid to Channel Advisor (variable)
$
$
$
$60
55.00%
1,100
10%
$
6 $
1 $
20.00%
$
$
$
$
Baseline Yr 2
$66
55.00%
11,000
7,783
3,617
10%
$
2 $
1 $
25.00%
$66
55.00%
15,000
15,000
15,000
10%
2
1
25.00%
0.05 $
$91
1.80%
7.83%
19.00%
15.00%
0.03 $
$341
2.00%
7.83%
19.00%
15.00%
0.03
$341
2.00%
25.00%
21,250 $
1,100
1
35,000 $
35,000 $
25.00%
21,250 $
6,000
4
37,500 $
150,000 $
25.00%
21,250
6,000
8
37,500
300,000
$
0.00%
12,300 $
1.75%
12,300
1.75%
8.13%
$
Baseline Yr 1

18. Financial
Model
Net Revenue
Total COGS
Gross Margin
GM%
Pro Forma
Baseline Yr 1
Baseline Yr 2
$
142,560 $
3,997,728 $
8,031,150
$
85,637 $
2,118,796 $
4,256,510
$
56,923 $
1,878,932 $
3,774,641
39.9%
47.0%
47.0%
Total Salaries and Wages Expense
Total General and Administrative Expenses
Total Expenses
$
$
$
58,890 $
17,481 $
76,371 $
238,450 $
717,442 $
955,892 $
456,250
1,492,477
1,948,727
Operating Income
OM%
$
(19,448) $
-13.6%
923,040 $
23.1%
1,825,914
22.7%
•Financials represent the first full year of Ebay sales after Channel Advisor implementation (sales ramp
imbedded in numbers). FY14 has even greater financial potential, as business matures and completes rampup and roll-outs to all marketplaces
•Financials exclude potential $250k spend on outsourced IT labor.
•Economics of Ebay selling channel are heavily weighted towards variable expenses (pay with performance).
•Vendors such as Gemstone King ($1M revenue per month) demonstrate JTV’s potential in this channel.

19. Financial Projections Highlights (FY13)
Additional Talking Points
 Expenses are mostly variable
 Virtual SKU & Drop-ship capabilities add significant upside to the Marketplace channel
 The Marketplace channel could add significant upside to a future gift card program
 FY14 has even greater financial potential, as business matures and completes ramp-up
and roll-outs to all marketplaces
 Experience from marketplace participation could help JTV launch its own marketplace
program in the future, with other retailers paying fees to JTV. “America’s Online Jewelry
Mall”
 New Customer expectations….

20. Unmodeled Upside!
Our financial models are very conservative, and don’t include upside from:
 Future revenue from new customers
 Future international sales (Amazon, eBay, and Buy.com all can give significant
international exposure)
 Future potential marketplaces not included in model (Sears.com, Walmart.com,
Overstock)
 Future revenue from virtual SKUs / drop-shipping program – unlimited potential!
 Additional eyeballs driven to JTV TV shows
 Long-term plan: Hosting our own JTV marketplace, where WE collect listing & selling
fees! (Crawl, Walk, Run)
 New email addresses / subscribers

21. Additional Benefits / Routine Sales Referrals back to JTV.com!
This data only includes web visitors who came
directly from eBay (excludes those who came
to JTV.com indirectly or later)

22. Additional Benefits / Web Traffic Referrals to JTV.com



Referral web traffic results in traffic and sales to JTV.com
This data only includes web visitors who came directly from eBay (excludes
those who came to JTV.com indirectly or later)
This is an improvement over previous years; and is expected to dramatically
increase as listings increase. August 2011 vs Nov 2009
Then
Vs.
Now

23. Marketplace Integration Partner
Advantages of Integration & Automation
 Scalability:
•

Increased sales and new customers: Go from 1,000 listings to as many as we
want, almost instantly
Elimination of most or all current manual processes
Costs are almost all variable
•
•
Elimination of:
• “Separate” inventory (and operating space), leading to lower inventory shrink risk
• Time-consuming, manual initial product selection and pull process
• Time-consuming, manual replenishment process
• Lost sales due to out-of-stocks. **(see speaker notes)

24. Marketplace Integration Partner
Advantages of Integration & Automation
 Enables:
•
•
•
•
•
•
•
•
New route to international sales through Amazon and eBay international sites
Additional exposure for closeout / liquidation inventory.
Order fulfillment by the WMS and Fulfillment team (leads to shipping expense
reduction of > $4/box using UPS SurePost)
Marketing. We will acquire many new email addresses which we can use for
marketing campaigns (need Subscription Center integration on eBay landing
page)
Automatic maintenance of price & cost data
Additional & better business reporting via Channel Advisor
Additional customer screening and fraud prevention measures via eBay and
PayPal results in less-risky transactions/customers
Organizational knowledge learned from each marketplace could enable JTV to
open its own marketplace site in the future – resulting in a steady revenue stream
without ever touching product

25. Marketplace Integration Partner
Disadvantages of Automation & Integration
 We currently re-write all product titles and descriptions; not possible when






listing 15,000 items
Titles and descriptions, as written in SKU Creation application, are
inadequate for eBay Best Match search algorithm. Need solution
Shipping speed will slow down, potentially hurting our shipping DSR scores
Returns process becomes part of Returns dept, potentially hurting our
communication DSR scores
Returns process FVF fee recovery will still need to be handled by ECommerce team
Manual ship process has advantage of better pre-shipping product
inspections, lowering return rates
Integration will require data feeds including image serving, and changes to BI
reports, WMS systems, Jupiter, Returns system, other systems

26. Marketplace Integration Partner
Ramp-up Plan
 Integration Project to take 6 months.
 Start out with focus on eBay. Over time….Learn, add staff, add listings, add
marketplaces
 CA can currently integrate with eBay, Amazon, Buy.com & Pixmania.com.
They are working on Sears now (ETA, summer 2012) , and negotiating with
Walmart. Others could be in the future
 CA gives us the ability to use Amazon and eBay internationally
 See handout that details estimated timing for addition of new marketplaces
and increases in listings

27. Appendices

28. 3PV Marketplace Channel Growth Plan **
$66.10
FY14
FY13
Jan-12
Feb-12
Mar-12
Apr-12
May-12
Jun-12
Jul-12
Aug-12
Sep-12
Oct-12
Nov-12
Dec-12
Jan-13
Feb-13
Mar-13
Apr-13
May-13
Jun-13
Jul-13
Aug-13
Sep-13
Oct-13
Nov-13
Dec-13
Jan-14
Feb-14
Mar-14
Apr-14
May-14
Jun-14
Expected ASP
eBay
Listings
1400
1500
1600
eBay
Gross
Sales
1700
1800 $
29,745
2000
33,050
3000
49,575
4000
66,100
6000
99,150
8000
132,200
10000
165,250
12000
198,300
14000
231,350
15000
247,875
15000
247,875
15000
247,875
15000
247,875
15000
247,875
15000
247,875
15000
247,875
15000
247,875
15000
247,875
15000
247,875
15000
247,875
15000
247,875
15000
247,875
15000
247,875
15000
247,875
15000
247,875
15000
247,875
25%
Staff
Count
Sales-to-Listings Ratio
Amazon
Listings
Amazon
Gross
Sales
0
0
1
1
1
2
2
2
3
3
3
3
3
3
3
3
3
3
3
3
3
3
3
3
3
3
3
3
100
200 $
3,305
300
4,958
400
6,610
400
6,610
1000
16,525
2000
33,050
3000
49,575
6000
99,150
9000
148,725
12000
198,300
15000
247,875
15000
247,875
15000
247,875
15000
247,875
15000
247,875
15000
247,875
15000
247,875
15000
247,875
15000
247,875
15000
247,875
15000
247,875
15000
247,875
15000
247,875
15000
247,875
15000
247,875
15000
247,875
1
** Assumes May, 2012 Launch with Channel Advisor
6,000 Expected Listing Mgmt Capacity per Employee
Buy.com
Sears.com
Walmart
Staff Buy.com Gross
Staff
Sears.com
Gross
Staff Marketplace
Count Listings
Sales
Count
Listings
Sales
Count
Listings
Channel Advisor Implementation; project plan execution
1
Channel Advisor Implementation; project plan execution
1
Channel Advisor Implementation; project plan execution
1
1
1
1
1
1
1
2
2
3
3
3
3
3
3
3
3
3
3
3
3
3
3
3
3
3
3
Channel Advisor Implementation; project plan execution
0 $
1
0 $
0
1
0
100
1,653
1
0
200
3,305
1
0
1
300
4,958
1
0
1
400
6,610
1
100
1,653
1
400
6,610
1
200
3,305
1
1000
16,525
1
300
4,958
1
2000
33,050
1
400
6,610
1
4000
66,100
2
400
6,610
1
6000
99,150
2
1000
16,525
1
8000 132,200
2
3000
49,575
2
10000 165,250
2
6000
99,150
2
12000 198,300
2
9000
148,725
3
12000 198,300
2
12000
198,300
3
12000 198,300
2
15000
247,875
3
12000 198,300
2
15000
247,875
3
12000 198,300
2
15000
247,875
3
12000 198,300
2
15000
247,875
3
12000 198,300
2
15000
247,875
3
12000 198,300
2
15000
247,875
3
12000 198,300
2
15000
247,875
3
12000 198,300
2
15000
247,875
3
12000 198,300
2
15000
247,875
3
12000 198,300
2
15000
247,875
3
12000 198,300
2
15000
247,875
3
Walmart
Gross
Sales
Staff
Count
10%
Total 3PV
Listings
Total 3PV
Gross
Sales
Return Rate
Total
Staff
NET
Sa
May 2012 Launch.
0 $
0
0
0
0
0
0
0
100
1,653
200
3,305
300
4,958
400
6,610
400
6,610
1000
16,525
3000
49,575
6000
99,150
9000
148,725
12000
198,300
15000
247,875
15000
247,875
15000
247,875
15000
247,875
15000
247,875
15000
247,875
15000
247,875
15000
247,875
1 The Sales-to-Listings Ratio predicts Unit Sales based on the quantity of listings in a given month.
2 This model shows how we would launch Channel Advisor with eBay as the first marketplace in May, 2012, then open new marketplaces with CA every three months.
3 This model shows how we will hire to support the level of listings activity, providing a one-month training period before adding more listings to the given marketplace.
4 This model shows 17,160 new customers in FY13; 23,400 in FY14.
1
1
1
1
1
1
1
1
2
2
3
3
3
3
3
3
3
3
3
3
2000
2300
3500
4600
7300
10500
13600
19300
25500
31600
37300
41400
46400
52000
57000
63000
66000
69000
72000
72000
72000
72000
72000
72000
72000
72000
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
33,050
38,008
57,838
76,015
120,633
173,513
224,740
318,933
421,388
522,190
616,383
684,135
766,760
859,300
941,925
1,041,075
1,090,650
1,140,225
1,189,800
1,189,800
1,189,800
1,189,800
1,189,800
1,189,800
1,189,800
1,189,800
3
3
3
5
5
5
8
8
9
10
10
11
11
12
13
13
14
14
14
14
14
14
14
14
14
14
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
1
1
2
2
3
4
5
6
6
7
8
9
9
1,0
1,0
1,0
1,0
1,0
1,0
1,0
1,0
1,0

29. Presented to

30. ChannelAdvisor Highlights
•
Manage $2.6B in Gross Merchandise Value (GMV) through the ChannelAdvisor Platform yearly
•
Process a transaction every second through the ChannelAdvisor platform
•
Used by more than 3,000 customers globally, including 160 of the Internet Retailer Top 500
– The largest e-commerce solution provider to Amazon, eBay and Buy.com
– Named by Internet Retailer:
• The #1 Most-Used Marketplace Solution to the Top 500 Retailers
• The #1 Most-Used Comparison Shopping Solution to the Top 500 Retailers
• The #2 Most-Used Paid Search Solution to the Top 500 Retailers
• The #2 Most-Used Rich Media Solution to the Top 500 Retailers
•
Headquartered in Research Triangle Park, NC
– Offices in Atlanta, New York, Seattle, London, Berlin, Melbourne and Limerick
– More than 300 employees worldwide

31. Consumer Shopping Landscape
151 million active consumers across
eBay, Amazon and Buy.com
Americans log more than 9.6 billion
searches per month
Your Customers
55% of online purchases are influenced by a
comparison shopping engine

32. ChannelAdvisor Platform – One Feed

33. Featured ChannelAdvisor Customers

34. ChannelAdvisor Marketplaces
A Few Customers…

35. ChannelAdvisor Premium Marketplaces - Launch Plus Services
Why Us?
Customer Success
1 Reduced labor with regard to initial category
mapping, listing schedules and posting template setup.

2 Accelerated launch time frame
3 Application of industry best practices
4 Hands on product training
Resource Allocation during Launch Plus
Timeline
Transition point in which customer
assumes full management.
Launch hand-off
Month
Start of Launch.
Kick-off
Launch
4-6 week process. Includes items listed in scope.
eBay & Amazon launch deliverables are
different.
Goal: To expedite your launch by doing more hands on
setup work during this time period. You will be required to
participate by shadowing this process and learning from
the training documentation so you are able to assume full
management after launch hand-off.

36. Transactional Data Process Flow
For Marketplace Orders

39. Risk Factors
Each of these points is
a Critical Success
Factor on eBay.

4 Risk Types: People, Product, Policies, & Technologies.

People:
• Ability to hire quality staff. This is a higher-caliber person than a call-center rep. Product
knowledge, merchandising & business knowledge, margin requirements, must understand
multiple systems (ebay, CA, Jupiter, etc), SEO / Best Match, writing ability, problem solving,
correspondence, etc.
• Individual productivity estimates. Expected case = manage 6000 listings per person
• Sales volume surpassing ability to respond to customer issues, which would result in poor
DSR scores, imperiling the business. Long-term consequences.
• Our ability to train & get SKU Creators to write better, SEO-friendly product titles and
descriptions

Product:
• Product Titles and Descriptions (SEO / Best Match Optimization)

40. Risk Factors
Each of these points is
a Critical Success
Factor on eBay.

4 Risk Types: People, Product, Policies, & Technologies (continued)

Policies:
• Changing away from free shipping policy. Must have!
• Changing free returns policy / inclusion of UPS or free Newgistics returns labels
• Losing physical access to product, to answer questions not answered by our product listing
data. This has been invaluable in creating sales and getting great feedback

Technology:
• Technology risk – Daily feeds to / from Channel Advisor must happen; maintenance must
happen
• Large-scale processing of Returns FEE transactions may or may not be automated by CA.
TBD
• Our ability to make modifications to internal systems and reports (BI input needed)
• Need to resolve problem of customer notes on eBay orders (they won’t show up in our
systems)
• Depends on two existing SE projects: Payment Tolkenization and Multiline / Sales Channel
order identification.

41. New Customers
In the future, we can sell Gift Cards from eBay, for use on
JTV.com:
 Promoted in each listing
 Promoted in a merchandising “content slot” on our store home page
 Promoted in our eBay emails
 Promoted in our shipping emails
$100

42. Project Charter
 Project Statement of Work (SOW)
This project will be called the “3PV Marketplaces Project”. This project requires the integration of Channel Advisor’s
(CA) Marketplace service offering into JTV’s systems via XML feeds over CA’s APIs, for the purpose of automating
data feeds to and from CA, enabling JTV’s operation of online marketplace stores on eBay.com, Amazon.com, and
Buy.com. The project requires modifications to certain JTV systems, including, but not limited to: Jupiter, Order
Management System, reporting systems, Oracle transaction tables, and the JTV WMS & Moku.
 Business Case
This project enables Jewelry Television to accomplish two objectives:
1.
Develop an incremental sales channel to increase revenues;
2.
Acquire new customers for JTV’s other sales channels.