Circuit City 2004 Annual Report Download - page 7

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Products
We offer more than 100,000 brand name and private label products. We endeavor to expand and keep current the
breadth of our product offerings in order to fulfill the increasingly wide range of product needs of our customers.
Computer sales include Systemax PCs complemented by offerings of other brand name PCs and notebook
computers. Our computer related products include supplies such as laser printer toner cartridges and ink jet printer
cartridges; media such as recordable disks and magnetic tape cartridges; peripherals such as hard disks, CD-ROM and
DVD drives, printers and scanners; memory upgrades; data communication and networking equipment; monitors;
digital cameras; plasma TVs and packaged software.
5
We assemble our Systemax brand PCs in our 297,000 square foot, ISO-9000-certified facility in Fletcher, Ohio.
We purchase components and subassemblies from suppliers in the United States as well as overseas. Certain parts and
components for our PCs are obtained from a limited group of suppliers. We also utilize licensed technology and
computer software in the assembly of our PCs. For a discussion of risks associated with these licenses and suppliers,
see Item 7, "Management's Discussion and Analysis of Financial Condition and Results of Operations – Factors That
May Affect Future Results and Financial Condition."
Our industrial products include storage equipment such as metal shelving, bins and lockers; light material
handling equipment such as hand carts and hand trucks; furniture, small office machines and related supplies; and
consumable industrial products such as first aid items, safety items, protective clothing and OSHA compliance items.
We began to market our ProfitCenter Software ™ suite of applications in 2004. ProfitCenter Software ™ is a
web-based application which is delivered as an on-demand service over the internet. The product helps companies
automate and manage their entire customer life-cycle across multiple sales channels (internet, call center, outside
salespersons, etc.).
The table below summarizes our mix of sales by product category:
Product Type - Years Ended December 31 (Percentage of net sales)
2004 2003 2002
---- ---- ----
Computer and computer related products 92% 92% 91%
Industrial products 8% 8% 9%
-- -- --
Total 100% 100% 100%
==== ==== ====
Sales and Marketing
We market our products to both business customers and individual consumers. Our business customers include
large businesses (customers with more than 1,000 employees), small and mid-sized businesses (customers with 20 to
1,000 employees), educational organizations and government entities. We have invested consistently and aggressively
in developing a proprietary customer and prospect database. We consider our business customers to be the various
individuals who work within an organization rather than the business location itself. The business customer and
prospect database includes detailed information, including company size, number of employees, industry, various
demographic and geographic characteristics and purchasing history.
We have established an integrated three-pronged system of direct marketing to business customers, consisting of
relationship marketers, catalog mailings and propriety internet web sites, designed to maximize sales. Our relationship
marketers focus their efforts on our business customers by establishing a personal relationship between such customers