CompUSA 2009 Annual Report Download - page 66

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6
We are continually upgrading the capabilities and performance of these websites. Our internet sites feature on-line catalogs of
hundreds of thousands of products, allowing us to offer a wider variety of computer and industrial products than our printed catalogs.
Our customers have around-the-clock, on-line access to purchase products and we have the ability to create targeted promotions for
our customers’ interests. Many of our internet sites also permit customers to purchase “build to order” PCs configured to their own
specifications.
In addition to our own e-commerce websites, we have partnering agreements with several of the largest internet shopping and search
engine providers who feature our products on their websites or provide “click-throughs” from their sites directly to ours. These
arrangements allow us to expand our customer base at an economical cost.
Catalogs
We currently produce a total of 15 full-line and targeted specialty catalogs in North America and Europe under distinct titles. Our
portfolio of catalogs includes such established brand names as TigerDirect.com™, Global Computer Supplies™, CompUSA,
TigerDirect.ca™, Misco®, Global Industrial™, ArrowStar™and Nexel™.Full-line computer product catalogs offer products such
as PCs, notebooks, peripherals, computer components, magnetic media, data communication, networking and power protection
equipment, ergonomic accessories, furniture and software. Full-line industrial product catalogs offer products such as material
handling products and industrial supplies. Specialty catalogs contain more focused product offerings and are targeted to individuals
most likely to purchase from such catalogs. We mail catalogs to both businesses and individual consumers. In the case of business
mailings, we mail our catalogs to many individuals at a single business location, providing us with multiple points-of-entry. Our in-
house staff designs all of our catalogs, which reduces overall catalog expense and shortens catalog production time. . Our catalogs are
printed by third parties under fixed pricing arrangements. The commonality of certain core pages of our catalogs also allows for
economies of scale in catalog production.
With increased focus on internet advertising, the distribution of our catalogs decreased to 46 million in 2009, which was 26.9% less
than in the prior year. In 2009, we mailed approximately 38 million catalogs in North America, a 18.5% decrease from last year and
approximately 8 million catalogs in Europe, or 51.3% fewer than 2008.
Customer Service, Order Fulfillment and Support
We receive orders through the internet, by telephone, electronic data interchange and by fax. We generally provide toll-free telephone
number access for our customers in countries where it is customary. Certain domestic call centers are linked to provide telephone
backup in the event of a disruption in phone service.
Certain of our products are carried in stock, and orders for such products are fulfilled on a timely basis directly from our distribution
centers, typically within one the day of the order. We operate out of multiple sales and distribution facilities in North America and
Europe. Orders are generally shipped by third-party delivery services. We maintain relationships with a number of large distributors in
North America and Europe that also deliver products directly to our customers.
We provide extensive technical telephone support to our private label PC customers. We maintain a database of commonly asked
questions for our technical support representatives, enabling them to respond quickly to similar questions. We conduct regular on-site
training seminars for our sales representatives to help ensure that they are well trained and informed regarding our latest product
offerings.
Suppliers
We purchase substantially all of our products and components directly from manufacturers and large wholesale distributors. In 2009,
one vendor accounted for 12.0% of our purchases and another vendor accounted for 11.3% of our purchases. One vendor accounted
for 12.0% and 14.4% of our purchases in 2008 and 2007, respectively. The loss of these vendors, or any other key vendors, could have
a material adverse effect on us.
Certain private label products are manufactured by third-parties to our specifications. Many of these private label products have been
designed or developed by our in-house product design and development teams.