Overstock.com 2012 Annual Report Download - page 43

Table of Contents
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The following discussion and analysis contains forward-looking statement relating to future events or our future financial or operating performance
that involve risks and uncertainties, as set forth above under "Special Note Regarding Forward-Looking Statements." Our actual results could differ
materially from those anticipated in these forward-looking statements as a result of certain factors described in this Form 10-K, including those set forth
in the Special Note Regarding Forward-Looking Statements or in Item 1A under the heading "Risk Factors" or elsewhere in this Form 10-K.
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We are an online retailer offering discount brand name, non-brand name and closeout merchandise, including furniture, home décor, bedding and
bath, housewares, jewelry and watches, apparel and designer accessories, electronics and computers, and sporting goods, among other products. We
also sell hundreds of thousands of best seller and current run books, magazines, CDs, DVDs and video games ("BMMG"). We sell these products
through our Internet websites located at www.overstock.com, www.o.co and www.o.biz ("Website"). Although our three websites are located at
different domain addresses, the technology and equipment and processes supporting the Website and the process of order fulfillment described herein
are the same for all three websites.
Our company, based in Salt Lake City, Utah, was founded in 1997. We launched our initial website in March 1999. Our Website offers our
customers an opportunity to shop for bargains conveniently, while offering our suppliers an alternative inventory liquidation or sales channel. We
continually add new, sometimes limited, inventory to our Website in order to create an atmosphere that encourages customers to visit frequently and
purchase products before our inventory sells out. We sell products primarily in the United States, with a small amount of products (less than 1% of our
total net revenue) sold internationally.
As used herein, "Overstock," "Overstock.com," "O.co," "we," "our" and similar terms include Overstock.com, Inc. and its subsidiaries, unless the
context indicates otherwise.
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We deal primarily in discount, replenishable, and closeout merchandise and use the Internet to aggregate both supply and demand to create an
efficient marketplace for selling these products. We provide manufacturers with a one-stop liquidation channel to sell both large and small quantities of
excess, closeout and replenishable inventory without disrupting sales through traditional channels. The merchandise offered on our Website is from a
variety of sources including well-known, brand-name manufacturers. We have organized our shopping business (sales of product offered through the
Shopping Section of our Website) into two principal segments—a "direct" business and a "fulfillment partner" business. We currently offer
approximately 344,000 non-BMMG products and approximately 641,000 BMMG products. Consumers and businesses are able to access and
purchase our products 24 hours a day from the convenience of a computer, Internet-enabled mobile telephone or other Internet-enabled devices. Our
team of customer service representatives assists customers by telephone, instant online chat and e-mail. We also derive revenue from other businesses
advertising products or services on our Website. Nearly all of our sales are to customers located in the United States. During the years ended
December 31, 2012 and 2011 no single customer accounted for more than 1% of our total net revenue.
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Our direct business includes sales made to individual consumers and businesses, which are fulfilled from our warehouse in Salt Lake City, Utah.
During the year ended December 31, 2012, we fulfilled approximately 14% of our order volume through our warehouses. Our warehouse generally
ships between 4,000 and 7,000 orders per day and up to approximately 10,000 orders per day during peak periods, using overlapping daily shifts.
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