ChannelAdvisor merchants can now list their inventory on Overstock.com Shopping as part of a deal announced at the ChannelAdvisor Catalyst conference on Wednesday. Overstock.com CEO Patrick Byrne announced the strategic alliance at his keynote address that outlined a shift in how his marketplace thinks about product sourcing.

Byrne said 68 percent of Overstock sales are drop-shipped from its network of partners, the rest are sourced by Overstock buyers who "are spread very thin." The deal allows Overstock to offer more product to fill demand that the site already sees. The company has been reviewing searches conducted on its site, and Byrne said, "the scope of unmet demand is too large to enable Overstock to get the expertise ourselves."

ChannelAdvisor customer Zu Ahmed, who sells jewelry and baby items on eBay (allearrings) and on her own website (www.blingaddict.com), said she is excited about the deal and sees it as an excellent away for her to increase revenues. "Any new venue like this, you see dollar signs - without hurting your own sales somewhere else."

Ahmed does $30,000/month in sales, about 85% on eBay. She recently joined the invitation-only Merchant@Amazon program and said she has barely anything listed and the sales are coming in for stuff that she could barely give away on eBay - and at better prices.

Overstock.com requires partners to ship to customers as if the products come directly from the marketplace, so packing slips and boxes may not include the sellers' branding. That was disappointing to Ahmed, who uses marketplaces in part as a customer acquisitions tool.

Byrne also announced that a new taxonomy and navigation will roll out on the site on April 10. He said Overstock staff responsible for buying inventory had been driving the taxonomy instead of how customers searched the site. The recently implemented, "very expensive," enterprise data-warehouse is giving management a lot of answers, "making us change how we think about things," Byrne said.

He also said the company has invested in personalization and relevancy. It currently sends email campaigns to 10 million people 3 - 4 times a week. "Instead of sending 12 products to 10 million people, we will be able to send 10,000 products to 10 million people" based on relevancy, Byrne said, though he did not give a timetable for when this would roll out.

There is critical demand in four areas: electronics, apparel, housewares, and sporting goods. "The deal with ChannelAdvisor is the only way to quickly get a supply chain to satisfy this demand." Byrne said.

ChannelAdvisor sellers must negotiate with Overstock.com buyers in their categories. One ChannelAdvisor is going live with the beta test today, and three people are going live this week.

In conjunction with this announcement, ChannelAdvisor is waiving all ChannelAdvisor fees associated with selling via Overstock.com through March 30, 2008.

ChannelAdvisor CEO Scot Wingo said, "By integrating Overstock.com into our platform, ChannelAdvisor continues to provide online retailers the solutions they need to become multi-faceted and innovative retailers."

http://www.channeladvisor.com/overstock