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. 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
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. 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. KRACO ENTERPRISES – SELECTION PROCESS
Model - Current
Source: ChannelAdvisor.com
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?
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. 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%
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?
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.