ChannelAdvisor make a profit and reorg for future
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.