Practical Ecommerce

ChannelAdvisor CEO Discusses Shop.org

Shop.org is a leading trade association for ecommerce merchants. It’s the online division of National Retail Federation, which represents 3.6 million retail businesses worldwide. To discuss Shop.org and its role in helping online retailers, we spoke with Scot Wingo. He’s the CEO of ChannelAdvisor, the ecommerce services and software firm. He has recently been elected to the Shop.org board of directors.

Practical eCommerce: Tell us about Shop.org.

Scot Wingo: “Shop.org is a subset of NRF — National Retail Federation — a trade association for retailers. That’s a very old organization and very big and very influential in the world of retail. In the late 1990s, they decided to start a focused group on ecommerce to help existing brick-and-mortar people understand ecommerce, but also to welcome in a whole new generation of retailers — those that are called ‘pure plays,’ that were ecommerce only. Effectively, it’s a trade association that is focused on ecommerce.”

Scot Wingo

Scot Wingo

PEC: So, its mission is to help ecommerce merchants prosper?

Wingo: “Like any organization, it’s got a lot of different missions or components to the mission. One mission is to provide a forum and community aspect for online retailers. Another one is that they do quite a bit of lobbying and working with Washington D.C. on issues that relate to ecommerce. The third is a sharing of best practices amongst the community that they built.”

PEC: Where does it get its money?

Wingo: “It’s a nonprofit. The revenue essentially comes from membership dues and trade shows. Probably the thing Shop.org is best known for is that they coined the phrase ‘Cyber Monday.’ They actually run a site Cybermonday.com that is a comparison shopping engine for Cyber Monday [the Monday after Thanksgiving, the U.S. holiday], and that generates quite a bit of revenue for some of the philanthropy things they do at Shop.org.”

PEC: What’s involved with serving on the board? How long is your term, for example, and how often do you meet as a board?

Wingo: “The Shop.org board has around 20 members. Most of them are retailers and about five or six are vendors. What we do as a board is help the organization, guide the organization, give them feedback. Just like in any kind of business, sometimes you get so into the day-to-day that you have to pop up and ask, ‘What’s the strategy?’ As a board, we help Shop.org formulate a strategic plan, make sure they’re executing that plan, and give them feedback on what we’re seeing in the world of ecommerce.

“The board members are elected for two-year terms and they can be re-elected. I don’t believe there are term limits per se, but it does turn over a fair amount because there’s a fair amount of work involved. We meet four times a year physically and then there are a fair number of other ad hoc meetings to go over things. But the primary commitment is for meeting four times a year.”

PEC: Why does an executive in your position sit on the Shop.org board?

Wingo: “We think it’s important for ecommerce to have voice and Shop.org is the premiere body that helps make sure that happens. So, we think it’s important to contribute to the macro side of things in addition to focusing on our own company, ChannelAdvisor.”

PEC: What are some tangible reasons that a smaller merchant should contemplate joining Shop.org?

Wingo: “I’m glad you bring that up. One of the reasons I was excited about this interview was that we’re very pro small-to-medium-sized ecommerce business here at ChannelAdvisor. We have about 3,000 customers, 200 or 300 of those are name brands, larger retailers. But the bulk of our customers are very entrepreneurial. We love working with that customer set and I think they are driving a lot of the growth of ecommerce.

“One of the things I want to bring to Shop.org is the view of that smaller retailer. What you’ll find at Shop.org is that, because it’s tied in with the larger retailers, you get a very interesting view of ecommerce from their perspective, lot of the things that happen in retail offline are definitely applicable online. What I think Shop.org brings to small businesses is [an opportunity to dialog with leading ecommerce executives.] What if you could talk to a vice president of Best Buy and learn something from what he or she has to offer? You have access to that kind of person as part of Shop.org. How do you talk to the much larger companies and get exposure to them? Shop.org can really deliver that.

“I think there’s the community aspect, best practices from the larger retailers that a small business could get. Then there are also two shows a year. There is the upcoming summit, which is held in September every year and that’s really the big show where you can get together and plan out the kind of things you can do for the holiday, and share best practices. There’s also a merchandising event every year. It’s primarily for the marketing side and it’s very well attended as well.”

PEC: For readers that aren’t familiar with ChannelAdvisor, could you tell them about your firm?

Wingo: “We’re a software company. It’s what’s called ‘software as a service,’ meaning you use your browser to access it. You don’t have to install it or anything like that. Retailers use our software to help manage what we call ‘ecommerce channels,’ things like search with Google and Yahoo! and Bing; comparison shopping engines, we support over 110 comparison shopping engines; and marketplaces like eBay, Amazon. There’s been an explosion of marketplaces. We also help people with web stores so we have an integrated web store capability.

“We’re based on a fundamental belief that the ecommerce channel is where you drive a lot of your sales. That’s really what we offer at ChannelAdvisor. It’s all integrated so you have one centralized location where you can manage your inventory and orders and all these different channels and really drive your top line growth as a retailer.”

PEC: Merchants reading this that are interested in pursuing additional channels, how do they plug your services into their carts? What will it cost them if they use ChannelAdvisor to feed their products into these various shopping channels.’?

Wingo: “Our pricing is tiered. On the low side, what you’re looking at is somewhere a monthly commitment of $500 to $1,000, and a small percentage as a revenue share. You send us your inventory — and I mean a data feed of your inventory, not your physical inventory — and then we take that and then optimize it for all these different channels out there that we’ve been talking about. Usually, it’s a pretty simple model to get started with us.

“A lot of small businesses use us as their inventory system. We have a pretty robust inventory system. Let’s say businesses start selling on eBay or on their ecommerce sites and they get to the scale where they realize they need more automation. That’s when they call ChannelAdvisor, and we can help them both automate their business and take a lot of the manual steps out, but then also expand their business pretty rapidly by getting into these new channels.”

PEC: A reader with a small business, what would it cost him or her to join Shop.org?

Wingo: “It’s tiered by your revenue. So if you’re $10 million and under, that’s $2,750 a year. Then if work your way up, it adds about $1,000 as you go from roughly $10 to $50 million. All that is available on the Shop.org website, in the membership section. Essentially, for $3,000 a year, you’re getting access to hundreds of the top retailers, content you can’t find anywhere else and two great shows. We think it’s well worth it. At ChannelAdvisor, we’ve recommended it to a lot of our customers. We’ve received really positive feedback. If you want to grow your business, you’ve got to look all around for different ideas and Shop.org is a great place to get them.”

Practical Ecommerce

Practical Ecommerce

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