Overstock.com 2004 Annual Report Download - page 12

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Products
Online Products
We offer products under 4 tabs: Shopping, Auctions, Travel and our Books, Music & Movies Tab. Currently, our products are organized into eight
different product departments on our Shopping Tab:
Apparel, Shoes & Accessories Gifts & Flowers
Books, Music & Videos Jewelry & Watches
Electronics & Computers Recreation & Sports
Home & Garden Worldstock Handcrafted
Each of these departments has multiple categories that more specifically define the products offered within that department. For example, the following
product categories are currently within the "Electronics & Computers" department:
Audio & Video Home Office Equipment
Cameras & Optics Computers & Printers
Telephones
Each category has several subcategories that further detail the product contained within. For example, under the "Computers & Printers" category, we
have the subcategories of "Computers," "Connectivity," "Drives & Storage," "Ink Cartridges," "Monitors," "PDA's & Handhelds," "Peripherals," "Printers &
Scanners" and "Upgrades" and under the "PDA's & Handhelds" subcategory we have the further sub-subcategories of "Accessories," "Handspring," "Other
Brands" and "Palm One."
We historically operated a separate B2B Website. However, our direct revenue has predominantly been based on purchases made directly through our
consumer Website. As a result, during the third quarter of 2004, we integrated the B2B Website into our consumer Website. B2B clients now buy products
primarily through our Club O frequent buyers club and our Club O Gold bulk purchase program. During 2004, no single customer accounted for more than
1% of our total revenue.
During September 2004, we added an online auction service to our Website. Our auction service allows sellers to list items for sale, buyers to bid on
items of interest, and users to browse through listed items online. We are not the seller of the items sold on the auction site and we have no control over the
pricing of those items. Therefore, for auctions, we record only our listing fees for items listed and commissions for items sold as revenue. For the year ended
December 31, 2004, our auction revenues were insignificant.
During the first quarter of 2005, we reopened our discount travel store to our Website, currently offering cruise packages. In the future, we intend to offer
other travel products such as flights, hotels, rental cars, etc. For the products or services that we sell in our travel store, we do not currently have inventory risk
or pricing control, and do not directly provide customer service. Therefore, for these sales we are not considered to be the primary obligor, and record only
our commission as revenue.
Individual products can be accessed and viewed from the category or subcategory pages. These specific product pages include detailed product
descriptions, a color picture and pricing information.
The number of total products we offer has grown from less than 100 in 1999, to more than 50,000 non-BMV products and approximately 500,000 BMV
products (books, magazines, CDs, DVDs, video cassettes and video games) as of December 31, 2004. As the number of products and product categories
change throughout the year, we periodically reorganize our departments and/or categories to better reflect our current product offerings.
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