Overstock.com 2005 Annual Report Download - page 5

• our belief that we can maintain inventory levels at appropriate levels despite the seasonal nature of our business; and
• our belief that we can successfully offer and sell a constantly changing mix of products and services, including auctions listing
services, travel services, and custom-made jewelry products.
Furthermore, in some cases, you can identify forward-looking statements by terminology such as may, will, could, should,
expect, plan, intend, anticipate, believe, estimate, predict, potential or continue, the negative of such terms or other comparable
terminology. These statements are only predictions. Actual events or results may differ materially. In evaluating these statements, you
should specifically consider the risks outlined in this Form 10-K, including those described in Item 1A under the caption "Risk
Factors." These factors may cause our actual results to differ materially from those contemplated by any forward-looking statement.
Except as otherwise required by law, we expressly disclaim any obligation to release publicly any update or revisions to any forward-
looking statements to reflect any changes in our expectations or any change in events, conditions or circumstances on which any of
our forward-looking statements are based. Although we believe that the expectations reflected in the forward-looking statements are
reasonable, we cannot guarantee future results, levels of activity, performance or achievements.
PART I
ITEM 1. BUSINESS
The following description of our business contains forward-looking statements relating to future events or our future financial or
operating performance that involve risks and uncertainties, as set forth above under "Special Note Regarding Forward-Looking
Statements." Our actual results could differ materially from those anticipated in these forward-looking statements as a result of
certain factors, including those set forth in Section 1A under the heading "Risk Factors" and elsewhere in this Form 10-K.
Overview
We are an online "closeout" retailer offering discount brand name merchandise, including bed-and-bath goods, home décor,
kitchenware, watches, jewelry, electronics and computers, sporting goods, apparel, designer accessories and limited travel services,
among other products. We also sell books, magazines, CD's, DVD's, videocassettes and video games ("BMV"), and we operate as part
of our Website an online auction site—a marketplace for the buying and selling of goods—between our customers. Therefore our
Website is comprised of five main tabs: Shopping; Books, Music, Movies and Games; Bulk Buys & Business Supplies; Auctions; and
Travel.
Our company, based in Salt Lake City, Utah, was founded in 1997, and we launched our first Website through which customers
could purchase products in March 1999. Our Websites offer our customers an opportunity to shop for bargains conveniently, while
offering our suppliers an alternative inventory liquidation distribution channel. We continually add new, limited inventory products to
our Websites in order to create an atmosphere that encourages customers to visit frequently and purchase products before our
inventory sells out. In eight departments on our main Website, www.overstock.com, we offer approximately 62,000 non-BMV
products and approximately 725,000 BMV products.
Closeout merchandise is typically available in inconsistent quantities and prices and often is only available to consumers after it
has been purchased and resold by disparate liquidation wholesalers. We believe that the traditional liquidation market is therefore
characterized by fragmented supply and fragmented demand. Overstock utilizes the Internet to aggregate both supply and demand and
create a more efficient market for liquidation merchandise. We provide consumers and businesses with quick and convenient access to
high-quality, brand-name merchandise at discount prices. Our objective is to provide
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