The nation’s biggest retailers are arming themselves with a secret weapon against Amazon — and it’s coming from Albany.
CommerceHub, a tech company owned by billionaire John Malone’s Liberty Media, has watched growth skyrocket in recent seasons as it fuels online sales nationwide for chains like Walmart, Costco, Best Buy and JCPenney.
The service, which allows retailers to beef up their picks online without buying inventory or operating costly warehouses, was a big hit industrywide during the Thanksgiving weekend. It adds merchandise to client websites while making sure a network of third-party suppliers can deliver it posthaste.
“To compete with Amazon, retailers are trying to radically build out their assortments,” says Frank Poore, CommerceHub’s founder and chief executive. “If you don’t have the big-screen TV they’re looking for, they’ll go somewhere else.”
Sales of CommerceHub’s “virtual inventory” — the name Poore uses for third-party goods that his firm sources for retail clients — surged 42 percent to $1 billion from Thanksgiving through cyber-Monday.
Year to date, online sales processed through CommerceHub are up 31 percent to $7 billion, he says, or about double the rate of online sales growth across the US generally.
What’s more, Poore predicted that virtual inventory fulfilled by third-party suppliers will account for more than 90 percent of all online goods within the next five years, up from about a third today.
Currently, the company has 175 employees. It added 40 workers this year and expects to hire an additional 60 in 2014.