ChannelAdvisor is a leading provider of cloud-based e-commerce solutions that enable retailers and branded manufacturers to integrate, manage and optimise their merchandise sales across hundreds of online channels
ChannelAdvisor from a user’s point of view
A few months back we were asked about ChannelAdvisor and what a ChannelAdvisor customer thought of their service – both the good points and the bad points. Jonny, from Global Technology Resource Ltd, runs a refurbishing computer business and uses ChannelAdvisor to sell on eBay as well as Amazon and has given us some insights as to how he uses ChannelAdvisor’s software.
Global Technology Resource Ltd started out as a trading group dealing with excess manufacturer product which they used to flip by selling without ever taking delivery. Once they’d found a customer the stock was shipped direct from the manufacturer but they expanded into refurbishment and selling on marketplaces. They fully clean, test and repackage computer products and have a strong green ethic of recycling everything possible including old packaging as well as making sure products are refurbished and sold where ever possible.
They initially looked at ChannelAdvisor due to growth, the number of product lines outgrew excel stock lists, launching and relisting products was unmanageable and even offering second chance offers was taking too long to achieve.
Jonny said that the initial implementation of ChannelAdvisor was a big learning curve and took weeks (months!) to fully figure out how it worked. Partly this is due to the complexity of the software and setting up sections like postage calculators didn’t always make sense until later down the implementation process when setting product weights and shipping costs on listings came into play.
Other hurdles included learning HTML to create the listing template, and more recently he’s looking at XML for the ChannelAdvisor premium store he’s signing up to.
The result was significant growth for the company though, ChannelAdvisor allowed them to expand into new EU markets such as Germany and France and to manage one pool of stock from which listings are launched onto eBay, Amazon and Pixmania.
Jonny emphasises that they still have to monitor and manage stock though – once products are listed on a particular site if another marketplace sells out ChannelAdvisor won’t pull unsold inventory from one site and relist on another. This goes against the current eBay wisdom of listing all your inventory on one eBay listing, as the stock has to be held back with ChannelAdvisor to replenish listings on whichever eBay (or other) site sells out first.
Comparison Shopping Engines / Adwords
Jonny doesn’t consider Comparison Shopping Engines (CSE) or buying search keywords as suitable for the refurb market. From experience he ends up paying for clicks from customers looking for new products which isn’t cost effective. However he does use ChannelAdvisor to submit products to Google Product Search as it’s the only major CSE that is free to use.
Which type of business should consider ChannelAdvisor?
ChannelAdvisor isn’t the right solution for low turnover companies, and even at the Gold PowerSeller level of £6k/mth turnover it’s probably not suitable. It’s when a company grwos to £20-£30k/mth that it really justifies itself.
It’s a serious business tool but Jonny did say that due to the costs (ChannelAdvisor charge a percentage of turnover) although at the £5-6k/mth level it’s not necessarily worth the investment, that level is probably the best time to learn the software. If your company is growing fast and you’re projecting turnover to reach £15-20k/mth in the near future you should seriously consider a solution like ChannelAdvisor sooner rather than later.
It’s well known that ChannelAdvisors checkout isn’t as slick as the standard eBay one page checkout, but Jonny has other issues as well.
He lists on multiple eBay sites from one eBay shop, and if a buyer makes a purchase in multiple currencies it’s a manual process to invoice them. It’s not possible to simply combine the postage, but to be fair that’s also a problem on eBay and not specific to ChannelAdvisor. However it’s on his wish list of issues for ChannelAdvisor to fix.
Invoices and shipping labels
I was surprised to learn that ChannelAdvisor isn’t able to print shipping labels, although there are add-on solutions such as Packing Partner from Aimco, and Metapack who can solve this. ChannelAdvisor only give the ability to print invoices so Jonny’s solution is to purchase integrated labels cut to his specification to produce both the invoice and the shipping label in one.
This isn’t an ideal solution for an online retailer, especially one with green credentials – Jonny would love to be able to simply email invoices and only print shipping labels as required.
Jonny is a pretty committed ChannelAdvisor customer, but he admits it has it’s frustrations and isn’t perfect. He does raise the changes he’d like introduced on the ChannelAdvisor forums but accepts that, for them to reach implementation, there needs to be a reasonable number of other ChannelAdvisor customers looking for the same features.
Once you start using ChannelAdvisor you’re not going to stop – according to Jonny it doesn’t make sense to switch to an alternative. He may have some complaints about what’s wrong, but changing to an alternative would involve another implementation and learning curve which just doesn’t make sense.
The biggest thing ChannelAdvisor has done for Jonny is time savings. Previously it was a round the clock operation scheduling listings to make sure he wasn’t competing with himself as items ended and making sure that second chance offers were issued as soon as possible once an auction had ended. Now all of that’s automated it’s given him the ability to expand his business as well as reducing the time taken on day to day repetitive listing and post sales tasks.
Jonny summed up his overall experience with ChannelAdvisor as “You’re dealing with what you’ve got but overall it’s a fantastic tool”. It’s enabled him to grow his business to a level that would be unthinkable if he didn’t have automation to assist him.
Disclosure: ChannelAdvisor advertise on TameBay
Nice to see that you advise buyers you use a 3rd party checkout. For me that would mean I wouldn’t buy anything from you, but top man for mentioning it, most don’t.
its the percentage cost thats stops us using CA apart from it being a tax on success
we cant work out why channel advisor can justify being paid more to process one item than another,
when its ebay that sold the item
That’s the main reason that scared us off a few years ago. The bigger we got, the more CA would take, even if the growth had nothing to do with them.
I also remember there being a problem coping with multiple skus on Amazon.
Like a lot of people, I’ve bought once with CA checkout, but never again.
Has anyone ever had a buyer that likes third party checkouts on eBay? I’ve never heard of one, as a buyer myself I have to admit I actively avoid listings that use third party checkouts.
I agree, I used CA once as a buyer…never again, a real pain and only serves to help the seller. No benefit to the buyer at all.
This is where CA fail, IMO…They are great for the sellers but no-one at CA seem to have looked at it from a buyers POV.
I can honestly see CA going the same way as Frooition or whatever they call themselves these days.
‘This isn’t an ideal solution for an online retailer, especially one with green credentials – Jonny would love to be able to simply email invoices and only print shipping labels as required.’
I can’t see why this is a problem, you must be able to download the sales from channel advisor, either as a csv, or via an API or screen scrape. If you couldn’t the third party solutions couldn’t work either.
Then its a simple matter of a simple shell script/batch file/mail merge to print labels and send invoices by email.
I used to used channel advisor back when it was called Marketworks, it was OK but hads it own problems. I didn’t notice a drop in sales? in fact we were making thousands.. better if your looking to expand.
Had dealings with them in the past I am sure they may work for some people, but certainly not for some products, anything that needs good design to show it off for starters doesn’t work as their website’s aren’t capable of that unless you upgrade which is even more money.
I suppose I think why pay for something that doens’t work for everything?
We just employed people to do the job instead of a computer, it means you can do more and I think better.
Urban33 – you can design the basic store almost as well as the premium store. Take a look at Buyforless, a CA case study.
First of all – thanks to Jonny for an honest “warts-and-all” interview. I’m all for an open dialogue and posts like this are a great catalyst for such discussions. Also, thanks to those making comments – always very interesting – in fact I wanted to respond to a couple of points to provide some clarity.
One of the biggest misconceptions I see on these forums (and others) is that ChannelAdvisor forces our customers to use the ChannelAdvisor checkout. This is not the case.
It is actually very likely, as a buyer, you’ve bought from a seller who uses ChannelAdvisor and not even realised it! This is because our clients can choose either to use our full checkout flow, use a shortened version (using PayPal Express Checkout) or even use the eBay Checkout (with Immediate Payment). The fact that many choose to still use either the full or shortened version of our checkout usually means that they are gaining some benefit from doing so. However, it is also true that some ChannelAdvisor customers choose not to use either and instead use the eBay Checkout instead.
The point is, our customers get choice – we are flexible. Having said that, we are always looking at ways to improve the buyer experience and will continue to make improvements to our own checkout during the course of 2010.
Charging a % of sales
We fundamentally believe in our model of charging a performance-related fee. In the same way as eBay and Amazon charge a percentage on the sales that are made, so does ChannelAdvisor.
Why? Well, first it means our goals are as closely as possible aligned with the goals of our clients – to grow the top line. It also means that we only make money when our customers make sales, which in general most of our customers are very happy with. Secondly, it means that the overhead cost of our technology to our customers is variable – which means if they have a slow month and sell less (which sometimes happens when eBay make a change to the rules!), they pay us less. If they have a cracking month and make a ton of money, they pay us more – but generally don’t mind doing so!
I totally accept that this model isn’t for everyone, but I wanted to make sure everyone reading understood the reasons for us adopting this fee structure.
I’m sure there will be more comments, and if it seems appropriate I’ll jump in with some more comments – but until then, thanks to Chris and Sue and the Tamebay community for coming up with this article and I look forward to hopefully seeing some of you at Catalyst in April.
MD, ChannelAdvisor UK
your explanation concerning %.
just does not cut the mustard with us
Ebay increase value by attracting buyers by promotions and advertising, attracting foot fall, our items sell and they charge us a commission for their efforts, as far as we are aware CA is just a software tool. that stocks the shelves
I bought a pair of shoes from a well known outlet on ebay last week and went through the 5 page 😯 CA checkout. When the CA checkout eventually transferred me to Paypal, the shipping address had been changed. I had to then email 😡 the outlet to check that my item could be sent to the correct address. That’s just abysmal for a company describing itself as “The leader in online channel management solutions and services”. In fact, the outlet felt compelled to send me a 5 column email on how to use the CA checkout 😥 .
The % take is ok if it is capped or if you provide a premium fixed price service that has no % take. Otherwise, the financial equation ceases to make sense once a certain level of turnover is reached.
Yes that has happened to me numerous times with a channel advisor checkout, very very frustrating
Is it just me or is something not quite right with this interview… 😕
a pound of flesh and the Merchant of Venice is what comes to mind
Always happy to learn, tell us what you want 🙂 (Bear in mind that it was you guys that asked us to speak to a real life customer and to find out what they thought was good about ChannelAdvisor as well as what they didn’t like.)
If you’ve got some suggestions for follow up questions drop them in comments and I’ll give Jonny a call and see if I can get them answered.
there can only be one reason why CA dont offer a plebs version with no % charge
and thats because they dont need to
CA offers nothing you can’t do for less (or even nothing) with other solutions, I manged 15+ IDs with it and so can anyone else. 1% of every transaction ? I don’t think so !
Any chance of sharing what these other solutions are?
I have heard good things about this company. They have a good pricing structure – different to ChannelAdvisor.
Look, I do like James … But come on ….
“We fundamentally believe in our model of charging a performance-related fee”
Well of course you do, a % is nearly always more than a flat fee would be, and if it isn’t then you’ll be be doing virtually nothing for the client anyway. It’s called “milking it”.
Congratulations to Jonny! No sooner does he say a few nice words about CA, and they’ve awarded him Retailer of the Month.
Well go figure, thought something was a bit odd about that post… 😆
There seems to be some very bitter people out there that have it in for CA, it looks like a good solution although not cheap, can anyone enlighten me why your so upset with them?
CA is a VERY good solution. We have been using it for a little over a year, managing over 1000 SKU’s on eBay and Amazon and everything works fine.
The expense is relative, if we didn’t use CA I know we would need to be paying someone to do a lot of the jobs that are automated by CA. Their salary would be more than twice the commission we pay CA.
The only gripe we have is that it can be a little over complicated in some areas and we really do need UK support which we don’t have. We can make an immediate 2 minute call to Amazon or eBay support to sort out a query. With CA we have to send an email to the States and normally wait a couple of days to get a reply and then sometimes get an answer to something we didn’t actually ask or be told to read all the details on the CA Strategy and Support Centre. Maybe someone can tell me how we can get UK support, I have never had a straight answer from the CA London office
It’s all about the customer, I have not found a single account of a buyer that has said “That CA checkout process is great”
…Selling online is all about removing obstacles and for us, CA adds rather than reduces them.
There are many other ways to achieve the same results if selling via multiple venues without the huge costs, slow support (after sales) and massive learning curve.
Its a steep learning curve but CA has saved me an hour a day refunding EBAY buyers who overpay postage due to the useless checkout EBAY have.
Add in an hour a day saved combining invoices and its paying for itself.
The ease of listing enabled us to create and upload 1900 skus in days rather than weeks..
Sales have increased by 40% in less than 30 days as our listings now look the business.
Its not for everyone… checkout is long (but the completion rate is better than EBAY!)… and it costs good money BUT as a solution for serious sellers it (or something similar) is a must
Why didn’t you just go free postage, buyers like it 😉
Interesting to hear that CA is helping you behind the scenes. I do agree that muti-channel sales management is a critical activity for any serious business. Any tool that can contribute to such impressive growth must be worthy of investigation.
Have to say, though, that the CA checkout honestly is awful. I’ve used it twice and it caused me headaches both times by changing the shipping address when it redirected me to Paypal. And there’s absolutely no justification to put buyers through 5 screens.
If CA can get combined postage right (credit where it’s due), why are the other parts of it so bad? eBay checkout certainly is out of date – it’s crazy that ebay doesn’t have a proper shopping cart system – but I couldn’t justify paying good money for something that’s just as flawed. Even if CA is the proverbial business for the seller, I have a nagging concern in the back of my mind that it’s not the same story from the buyer’s point of view. Try searching ‘channel advisor checkout’ on the ebay forums.
I avoid sellers with CA checkout, if I possibly can.
PS Couldn’t view any of your listings at the weekend – my better half was shopping for shiny things! Frooition servers down again?