Overstock.com 2007 Annual Report Download - page 10

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fulfillment partner relationships with approximately 730 third parties that post approximately 57,000 non-BMMG products, as well as most of the BMMG
products (found in the Books etc. department) on our Website.
Our revenue from sales from both the direct and fulfillment partner businesses is recorded net of returns, coupons and other discounts. During the third
quarter, we updated our returns policy. For products other than computers, electronics and mattresses the returns policy provides for a full refund of the cost
of the merchandise and all shipping charges if the product shipped is returned unopened within 30 days of delivery. If the product is returned after 30 days of
delivery, is opened or shows signs of wear, the transaction may only be eligible for a partial refund. For items shipped from our Computers and Electronics
department, returns must be initiated within 20 days of the purchase date and must be received in the original condition within 30 days of purchase. Computer
and Electronics products returned opened or received at our warehouse after 30 days may only qualify for up to a 70 percent refund. Damaged or defective
mattresses qualify for a full refund only if the items are refused at the time of delivery.
Both direct and fulfillment partner revenues are seasonal, with revenues historically being the highest in the fourth quarter, reflecting higher consumer
holiday spending. We anticipate this will continue in the foreseeable future.
For 2005, 2006 and 2007, the percentages of gross sales contributed by similar classes of products were as follows:
Product class 2005 2006 2007
Home and garden(1) 41% 42% 44%
Jewelry, watches, clothing and accessories 28% 27% 25%
BMMG(2), electronics and computers 23% 23% 23%
Other 8% 8% 8%
Total 100% 100% 100%
Home and garden includes home décor, bedding, bath, furniture, housewares, garden, patio and other related products.
BMMG stands for "Books, Music, Movies and Games".
Unless otherwise indicated or required by the context, the discussion herein of our financial statements, accounting policies and related matters, pertains
to the Shopping section of our Website and not necessarily to the Auctions, Cars, or Community sections of our Website.
Auctions business
We operate an online auction service as part of 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 record only our listing fees and commissions for items sold as revenue. From time to time, we also sell
items returned from our shopping business through our auction service, and for these sales, we record the revenue on a gross basis. Revenue from our auction
business is included in the fulfillment partner segment, as it is not significant enough to segregate as its own segment.
Car listing business
We operate an online site for listing cars for sale as a part of our Website. The car listing service allows sellers to list vehicles for sale and allows buyers
to review vehicle descriptions, post offers to purchase, and provides the means for purchasers to contact sellers for further information and
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