Nautilus 2007 Annual Report Download - page 6

Table of Contents
PRODUCTS
The Company’s principal business activity is the design, development, manufacturing, and worldwide marketing of high quality cardiovascular
and strength products and related accessories.
Branded Fitness Equipment Products
The fitness equipment line is comprised of high-quality cardiovascular and strength products that cover a broad range of technology, price
points, and features that are believed to be among the best in categories in which they compete.
SALES AND MARKETING
Fitness Equipment Business
The Fitness Equipment Business products are marketed and sold through a diversified direct, retail, and commercial sales distribution channel
within the Americas, which includes the United States (the “U.S.”), Mexico, Canada and South America. These distribution channels consist of
independent authorized dealers, our own sales force, distributors and our e-commerce web sites that are accessible through the overall website
(www.nautilusinc.com). We believe we position our products to better meet consumer demand and shopping patterns and to further expand our
sales channels by offering more of the products consumers want in the places they shop and exercise.
Our Fitness Equipment Business has three distinct sales channels:
We use the spot commercials and infomercials, together with Internet advertising and search-engine placement, to lead consumers to
our website, as we believe consumers who visit our website are more inclined to purchase our products. We believe we successfully
balance our goals of finalizing sales and capturing consumer information by strategically designing our web pages and carefully
analyzing web page visits, conversion rates, average sales prices and inquiry counts.
We contract with large telemarketing companies to receive and process information requests generated by our spot television
advertising. The telemarketing agents for these companies collect names, addresses and other basic information from callers but do
not directly sell our products.
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• Our Nautilus brand includes four distinct lines of strength equipment, free weights and benches, and a complete line of cardio
equipment including treadmills, ellipticals, and upright and recumbent exercise bicycles.
•
Our StairMaster brand is best known for steppers and stepmills designed for excellent lower
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body and cardiovascular workouts.
•
Our Bowflex brand has been expanded to represent a complete line of fitness equipment to include both strength and cardio products.
Included in the Bowflex brand are multiple models of rod-based home gyms, the Revolution home gym, SelectTech dumbbells,
weight benches, home TreadClimbers and treadmills.
•
Our Schwinn Fitness brand includes a popular line of equipment designed for indoor cycling which includes upright and recumbent
exercise bikes, as well as treadmills and ellipticals.
•
We acquired the Universal brand in 2006 and we expect to introduce a line of strength products under this brand in 2009.
•
In the
direct channel
, we market and sell our products directly to the end
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consumer. We market and sell a line of Bowflex branded
cardiovascular, strength, and fitness accessory products through this channel utilizing an integrated combination of media and direct
consumer contact. Along with “spot” television advertising, which ranges in length from 30 seconds to as long as five minutes, we
utilize extended 30-minute television infomercials, Internet advertising, our product websites, inquiry response mailings, catalogs,
and inbound/outbound call centers.