Circuit City 2009 Annual Report Download - page 7

Table of Contents
Our computer product include desktops, laptops and notebooks and are primarily offerings of brand name original equipment manufacturers, as
well as our own private label brands. Computer supplies and consumer electronics related products include supplies such as laser printer toner
cartridges and ink jet printer cartridges; media such as flash memory, 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 and LCD TVs; MP3 and DVD players; PDAs; and packaged software.
We assemble our private label PCs in our ISO-9001:2000 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 1A, Risk Factors.
Our industrial products include material handling equipment, storage and shelving equipment, work benches, packaging supplies, furniture and
office products, food service equipment and supplies, janitorial and maintenance supplies, HVAC, electrical and plumbing supplies and
consumable industrial products such as first aid items, safety items, protective clothing and OSHA compliance items.
Sales and Marketing
We market our products to both individual consumers and business customers. Our business customers include for-
profit businesses, educational
organizations and government entities. We have developed numerous proprietary customer and prospect databases.
We continue to have strong growth in sales to individual consumers, through e-commerce means and retail stores. To reach our individual
consumer audience, we use online methods such as website campaigns, banner ads and e-mail campaigns. We are able to monitor and evaluate
the results of our various advertising campaigns to enable us to execute them in the most cost-effective manner. We combine our use of e-
commerce initiatives with catalog mailings, which generate online orders and calls to inbound sales representatives. These sales representatives
use our information systems to fulfill orders and explore additional customer product needs. Sales to individual consumers are generally fulfilled
from our own stock, requiring us to carry more inventory than we would for our business customers. We also periodically take advantage of
attractive product pricing by making opportunistic bulk inventory purchases with the objective of turning them quickly into sales. We have also
successfully increased our sales to individual consumers by using retail outlet stores. Over the past several years, the Company has expanded its
brick and mortar retail operations through the CompUSA acquisition and by opening new stores.
We have established a multi-faceted direct marketing system to business customers, consisting primarily of our relationship marketers, catalog
mailings and proprietary internet websites, the combination of which is designed to maximize sales. Our relationship marketers focus their
efforts on our business customers by establishing a personal relationship between such customers and a Systemax account manager. The goal of
the relationship marketing sales force is to increase the purchasing productivity of current customers and to actively solicit newly targeted
prospects to become customers. With access to the records we maintain, our relationship marketers are prompted with product suggestions to
expand customer order values. In certain countries, we also have the ability to provide such customers with electronic data interchange (“EDI”)
ordering and customized billing services, customer savings reports and stocking of specialty items specifically requested by these customers. Our
relationship marketers’ efforts are supported by frequent catalog mailings and e-
mail campaigns, both of which are designed to generate inbound
telephone sales, and our interactive websites, which allow customers to purchase products directly over the Internet. We believe that the
integration of our multiple marketing methods enables us to more thoroughly penetrate our business, educational and government customer base.
We believe increased internet exposure leads to more internet-related sales and also generates more inbound telephone sales; just as we believe
catalog mailings and email campaigns which feature our websites results in greater internet-related sales.
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