“We still have a get-stuff-done attitude. We don’t do cheers every morning. But a lot of people are surprised we have the customer base we do. It’s because we’ll pick up the phone and call the vice president of sales at Best Buy.”Scot Wingo


Editor’s note: RTP Beat is a regular feature on Thursdays.ChannelAdvisor wants top sales people and software developers to help it continue expanding this year, says Scot Wingo, founder, president and chief executive officer.

“Tell people we’re hiring,” Wingo, says.

Wingo also tells Local Tech Wire the company has already received calls from potential customers and business partners since an article about eBay as “America’s Corporate Mall,” featured ChannelAdvisor in its April issue out this week.

The article focused on large corporations learning to use eBay to sell refurbished or older items rather than more traditional liquidators. It notes that ChannelAdvisor is the largest eBay liquidations outsourcer, handling $10 million in gross auction sales monthly for clients such as Sears, Best Buy, Sharper Image and Noikia.

Founded in the heady days of the Internet boom as AuctionRover, Wingo’s company sold to Goto.com, then was bought back by Wingo and investors after the Internet balloon deflated.

Boom survivor

Renamed ChannelAdvisor, it raised about $12 million in venture backing, most recently a $7 million round in January led by Kodiak Ventures in Boston. Local firms Southern Capitol Ventures and the Atlantis Group also invested.

The round even included an investment from eBay itself. Striking a deal with eBay was one of AuctionRover’s early strategic moves and the relationship clearly helped the company differentiate itself from would-be competitors.

The first time we visited Wingo’s offices, the company was still AuctionRover and his dog Mack, a Border Collie greeted us at the door. A Star Wars space ship hung over the receptionist’s desk. Wingo told us then, “This is Mack’s third startup.”

Mack still comes to the office, but the space ship and Star Wars robots have been moved to conference rooms. ChannelAdvisor now does regular business with the likes of IBM, Motorola, and Pioneer.

“You don’t want IBM executives thinking you’re unprofessional,” Wingo says.

Expansion mode

The company’s corporate clients pay a $10,000 set up fee, from $5,000 to $10,000 a monthly as service fees, and a 4 to 15 percent commission.

“That sounds like a lot in absolute dollars,” says Wingo, “but if it’s a $20 million channel, it’s not. If you have to hire three people at $80,000 a year with benefits, it’s not. We’ve been lucky to catch on to the outsourcing trend, ironically enough.”

This year, he says, the company wants to double last year’s revenue to $8 million to $10 million.

Wingo notes that the company is in expansion mode. “We’re near cashflow even, but our goal is not to be that profitable right now. You may actually see us lose a little more money as we hire more people.”

ChannelAdvisor cut back the staff from 70 at Goto.com to the high 40s after the buyback. “We needed to retool and didn’t need a lot of the same sort of people,” Wingo explains. The company has 60 employees now.

Wingo says part of the trouble with the Internet bubble was that the “Gold Rush” attitude kept people from being able to separate the “gems from the trash.”

The handful of surviving Internet firms in the Triangle are thriving and hiring, he says.

Secret sauce

How did ChannelAdvisor succeed when so many Internet focused companies failed? It hasn’t all been easy, he points out.

“This is a marathon,” Wingo says. “Like a marathon, parts of it are grueling and it’s been grueling getting to where we are. But the nice part is that we’ve built a considerable barrier to entry.”

One of ChannelAdvisor’s two competitors, Accenture-owned Connection, shut down in February, and its other competitor, Atlanta-based Auctionworks, picked up its business.

“Accenture threw over 100 people at this and couldn’t get successful. We’ve built something special that has a lot of secret sauce,” Wingo says.

That secret sauce, says Wingo, includes many little ingredients not that interesting by themselves but creating a unique recipe together.

Just throwing people at an information technology problem probably won’t work, he stresses. “There’s this old saying in computer science that it takes a woman nine months to make a baby, but you can’t take nine women and make a baby in a month. More people can actually slow you down sometimes.”

One ingredient of ChannelAdvisor’s secret sauce is that it helps customers like Best Buy decide what to sell and how to sell it.

Another, Wingo adds, is that the company relentlessly examines whatever services people must still perform manually every quarter. “Then we automate that with software,” he says. “We’re really a technology company within a service company and that makes a lot of difference.”

Dealing with eBay’s notoriously finicky individual customers can pose a service problem. ChannelAdvisor staff personally answers service questions for Best Buy’s eBay customers, for instance.

Fortunately, Wingo says, most of the questions are fairly standard. “We use software to avoid a lot of personal service. You’ll always have about 20 percent product questions. We religiously look at every single question, because we hope to get rid of the other 80 percent with software.”

Customers in all sizes

ChannelAdvisor doesn’t just cater to those big corporations. It has a range of customers from small companies such as Glacierbay DVD to individuals. An entry-level package starts at $30 a month. “It’s like Quickbooks for eBay,” Wingo says. It helps users place items online and manage all the “dirty, hands on things you have to do on eBay,” such as managing shipping and feedback.

The company is not resting on its laurels, however. Wingo says it now supports Amazon.com sales and will put company catalogs on Yahoo or AOL Shopping sites.

“We’re also getting into a new area, paid search like Google’s,” Wingo says. “Our customers are asking us to look into that.”

The corporate culture at ChannelAdvisor has always been Gung Ho and Wingo, who turns 37 this summer, says, “We still have a get-stuff-done attitude. We don’t do cheers every morning,” he says. “But a lot of people are surprised we have the customer base we do. It’s because we’ll pick up the phone and call the vice president of sales at Best Buy.”

Wingo originally founded the company because he had been trading collectibles on eBay after selling his previous software company and having both money and time on his hands. He says he still trades collectibles such as the occasional Star Wars item and comic book art. “I buy more than I sell,” he says.

Wingo says ChannelAdvisor could probably move forward growing 50 percent year over year without the additional financing it received, but prefers to grow faster. “This year we want to double 2003 revenue to $8 to $10 million,” he says.

“We happened into a great space. It’s really large and we’re poised for a lot of success.”

ChannelAdvisor: www.channeladvisor.com