Overstock.com 2009 Annual Report Download - page 109

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Table of Contents
Overstock.com, Inc.
Notes to Consolidated Financial Statements (Continued)
2. ACCOUNTING POLICIES (Continued)
Direct revenue
Direct revenue consists of merchandise sold through the Company's Website to individual consumers and businesses that is fulfilled from its leased
warehouses.
Fulfillment partner revenue
Fulfillment partner revenue is derived from merchandise sales through the Company's Website which fulfillment partners ship directly to consumers and
businesses from warehouses maintained by the fulfillment partners.
The Company provides an online auction service on its Website. The Auctions tab allows sellers to list items for sale, buyers to bid on items of interest,
and users to browse through listed items online. Except in limited circumstances where the Company auction-lists returned merchandise, the Company is not
the seller of auction-listed items and has no control over the pricing of those items. Therefore, the listing fees for items sold at auction by sellers are recorded
as revenue during the period these items are listed or sold on a net basis. The revenue for the merchandise returned that the Company sells at auction is
recorded on a gross basis. Revenue from the auctions business is included in the fulfillment partner segment.
The Company provides an online site for listing cars for sale as a part of its Website. The cars listing service allows dealers 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
negotiations on the purchase of an advertised vehicle. Revenue from its cars listing business is recorded net and is included in the fulfillment partner segment.
The Company provides an online site for listing real estate for sale as a part of its Website. The real estate listing service allows customers to search
active listings across the country. Listing categories include foreclosures, live and on-line auctions, for sale by owner listings, broker/agent listings and
numerous aggregated classified ad listings. Revenue from the real estate business is recorded net and is included in the fulfillment partner segment.
Total revenue from Auctions, Cars and Real Estate businesses was $1.4 million, $1.0 million and $2.1 million for the years ended December 31, 2007,
2008 and 2009, respectively.
International business
The Company began selling products through its Website to customers outside the United States in August 2008. As of December 31, 2009, the
Company was selling to customers in 58 countries. The Company does not have operations outside the United States, and is using a U.S. based third party to
provide logistics and fulfillment for all international orders. Revenue generated from the international business is included in either direct or fulfillment
partner revenue, depending on whether the product is shipped from the Company's leased warehouses or from a fulfillment partner.
Total revenue from International sales was $1.3 million and $5.1 million for the years ended December 31, 2008 and 2009, respectively.
In September 2009, the Company began offering a consignment service to suppliers where the suppliers' merchandise is stored in and shipped from the
Company's leased warehouses. The Company pays the consignment supplier upon sale of the consigned merchandise to the consumer.
F-15