ChannelAdvisor buck the recession to make a profit
3/11/2009 at 17:19
Good news is coming from ChannelAdvisor, especially bearing in mind the recession. For the first time since the company was founded in 2001, they’ve been profitable for a full year, with $2.6 million in bookings and 229 new customer additions in the last quarter alone.
It’s great to see them turn the corner, after what can only be described as a long slog to profitability. As a Software-as-a-Service company, their income is generated by a small percentage of their merchants turnover, so the upfront investment to build solutions was always going to be greater than immediate income. Continually adding new customers and retaining existing merchants is key to their future profits.
ChannelAdvisor aren’t sitting on their laurals though, they’ve just released their next generation Amazon solution in the US. Highlights include automatic ASIN (Amazon Standard Identification Number) discovery for new listings, dynamic population of Amazon’s item classification keyword requirements, a revised management dashboard and full integration with Amazon FBA (Fulfilment by Amazon). Hopefully we’ll see this rolled out for merchants selling on Amazon UK in the future.
I have to say if you think listing on eBay is hard work, filling out title, descriptions, prices, categories and item specifics it’s easy compared to getting products listed on Amazon. The new tools should cut the workload for merchants wishing to upload inventory in bulk and move listing product to a sales function, rather than involving retailers IT departments every time a change is required.
It’s been a year since the final round of investment of $20m cash into ChannelAdvisor and investors can now breathe a sigh of relief and sit back to wait for future profits to roll in. The stock market conditions probably aren’t ideal for floating a company at the moment, but it wouldn’t surprise me if this was the next step in ChannelAdvisors future plans.
Disclosure: ChannelAdvisor advertise with TameBay
whirly says
6:07 pm on 03/11/2009
What was the profit after tax?
Chris Dawson says
10:47 pm on November 3rd, 2009
Now that they didn’t choose to share with me…
whirly says
6:40 am on November 4th, 2009
oh, only asked as I have no idea what %2.6 million in bookings is ? how does that relate to profit.
Chris Dawson says
9:42 am on November 4th, 2009
Got an answer for you – it’s the minimum they’d expect to earn from contracts over the next 12 months but doesn’t include any percentage on sales as that’s an unknown variable (although I’m sure they have a pretty good idea of what to expect!)
EventHorizon1984 says
11:33 pm on 03/11/2009
whirly says:
> What was the profit after tax?
According to the linked press release, no.
“12 months ending September, 2009, ChannelAdvisor achieved for the first time in company history a full year of positive EBIDTA (earnings before interest, depreciation, tax and amortization)”
Would be interesting to know the net gain investors saw.
.
“Once you have their money, you never give it back.
Rules of Acquisition, #1
Chris Dawson says
12:25 am on November 4th, 2009
Almost certainly they don’t want their money back – they’d be much better off with a stock market flotation
Shamim Patel says
12:38 am on 04/11/2009
I was with Channel Advisor for 3 years. I found them nothing but a painful experience. We spent around £20k per anum with them, where as we spent £100 with eBay using the Pro Selling Manager.
You do the maths and tell me if its worth joining them. They tied us down to a long term contraact which we couldnt get out of.
Do the matchs and dont be caught up with their big name customers !!!!
Regards
Shamim
Lino says
7:28 am on November 4th, 2009
Congratulations to them, but have to admit, I haven’t heard much positive feedback about Channel Advisor (except on Tamebay). Would be very interested to hear from more Channel Advisor customers.
northumbrian says
9:49 am on November 4th, 2009
we agree it does compromise impartiality a little
Chris Dawson says
9:56 am on November 4th, 2009
Happy to go get you a warts and all case study from a CA customer telling what’s good and what’s bad. Leave it with me.
Lino says
10:44 am on November 4th, 2009
Thanks Chris, would be great to hear a few examples, good and bad. Have to admit, “a start up fee, a monthly subscription and a % of sales” instantly worries me.
JP says
12:44 pm on November 5th, 2009
I was a customer of CA for a short time as I wanted to find a solution for my inventory management and submit my inventory to ebay and amazon. After experiencing the (rather complicated software); paying £500 for training (if you can call it that), I cancelled prior to having to go with the 12 month contract.
I found their commercial tactics to sign me up very distasteful. It requires a VAST investment of time and technical expertise – none of this is discussed prior. They would not let me see / have a demo of the software prior, only a powerpoint demo (which had selective information).
I do think the software is potentially very good, but there is no way of knowing unless you sign your life away, and it will cost you thousands of pounds (not hundreds) to find out.
Lee Pearce says
7:56 am on 04/11/2009
Im am going through the initial stages of setting up Channel Advisor at the moment.
It does take a bit of setting up, but i can see the benefits of time/cost saving in the near future.
The new Amazon solution was the Hook for me and i am eagerly awaiting its introduction.
They do cover all the angles with their fees though, a start up fee, a monthly subscription and a % of sales, but you have to look at your own situation and the benefits that Channel Advisor will bring to see if its right for you.
The set up support is good.
You will need a implementation strategy as its not something you set up in a week, well not me anyway but more to do with the time of the year and the amount of time that i have allocated to it.
One thing i would like to have done before signing up, would have been to see someone who is actually using it as part of their business as you are signed up for 12 months and its a bit of an investment on the back of just the sales pitch.
JMHO
Lee
Dave says
8:25 am on November 4th, 2009
Hi Lee
They are very nice people and it might be good for you but if your going to give them a shot then don’t sign a long term deal we only did it for a 6 month,we are no longer with them.
All the Best
Dave
Tony Hogben says
8:48 am on 04/11/2009
BE WARE
Bigpoppa says
8:54 am on 04/11/2009
Just my personal opinion but I wouldn’t advise ANYONE to go with Channel Advisor, sorry.
Debs says
12:34 pm on November 5th, 2009
Bigpoppa, can you elaborate a little as to why?
I made a brief, initial enquiry but baulked a little at the costs.
Bigpoppa says
1:58 pm on November 5th, 2009
The costs are obviously a main concern, especially in these uncertain times. However, not taking that into account and ignoring the lack of customer support post signup and the aggressive way they try to get you into a longer contract…
…Have you ever made a purchase using Channel Advisor, not knowing or expecting it to be Channel Advisor…
An absolute nightmare, your lost carts will rocket.
The technology simply isn’t user friendly enough to warrant the expense..IMO
stuart says
9:40 am on 04/11/2009
We had issues with them to, if you are considering it ask for a months trial or the very least 6 months contract.
I would only advise if you are a big business that can have someone working with channel advisor all the time as the tech stuff is very complicated.
Stu
Liz says
9:29 am on 05/11/2009
ChannelAdvisor is GREAT – if you know how to use it. I *have* clients because they couldn’t use it properly, a direct fall out of its complexity. But now it runs, you can basically leave it be.
I wouldn’t recommend the solution to anyone who was not going to make significant investment in training for staff to use it to its full potential.
You need a software savvy body on board. If not, something like inkfrog or auctiva (Dare i say) would be best.
In my time at Frooition I trained 45 businesses to use ChannelAdvisor, and honestly only around 10 of them used it to its full potential and benefit due to their previous knowledge.
Mark says
10:16 am on 06/11/2009
I’m surprised that they’ve only just turned a profit with the ridiculous fees they charge.
In my opinion it’s good if you’re disorganised and/or lazy. If you’re not, spend a bit of time finding and managing other solutions, as you’ll save a packet.