E-commerce consultant increases space, work force

E-commerce consultant ChannelAdvisor is expanding its Morrisville headquarters as it adds employees and pursues more acquisitions.

The company moved its engineering and development division into nearly 10,000 square feet of additional space adjacent to its existing 50,000-square-foot building.

ChannelAdvisor will add about 100 employees worldwide in 2008 after raising about $30 million in venture capital this year. The new hires, mostly Web developers and database and quality assurance engineers, will take the company to a total of about 400, CEO Scot Wingo said.

About half work in Morrisville and the rest at offices in Atlanta, England, Germany and Australia.

"We'll probably add about 30 developers right here," Wingo said, referring to the newly added office.

ChannelAdvisor needs to bulk up to keep pace with surging online sales, which are expected to increase 20 percent this holiday season, research firm ComScore reports.

ChannelAdvisor designs and implements the software that enables retailers to sell and market goods over the Internet, via search engines, shopping Web sites and online clearinghouses such as eBay, Amazon and Overstock. ChannelAdvisor takes a small cut of sales.

In September, the company bought Atlanta-based Marketworks, a smaller competitor, to extend its reach among smaller sellers in the e-commerce market.

The next step is to seek acquisitions to expand into the e-mail sales market and the so-called Web conversion market, or the business of optimizing retail Web sites to achieve higher sales, Wingo said. That business is especially lucrative because it provides two revenue streams: fees for making enhancements, as well as a cut of resulting sales.

"It kind of multiplies," Wingo said.

The company expects roughly $30 million in revenue this year and about $45 million in 2008.

That would take it closer to the size it needs for an initial public offering of stock. Some Wall Street investors consider only those tech companies with close to $100 million in revenue.

"We're maybe two years away from that. I think that's a good time frame for us," Wingo said.

As part of that goal, the company recently brought on new managers for product development and quality control, and implemented a more employee-driven work management system.

The new bottom-up management strategy puts project staff, rather than top executives, in charge of designing, executing and delivering customer products. It's a design used by Toyota manufacturing to break work into smaller chunks with multiple checkpoints, and improve communication and quality control, said Bob Galen, director of product development. "The people doing the work know more than the managers and can react to things happening on the line," Galen said.

That should come in handy as the company looks to improve products that it released this year.

"If 2007 was to create a lot of stuff, 2008 is to improve its quality," Galen said.