Overstock.com 2009 Annual Report Download - page 15

Table of Contents
The number of total products we offer has grown from less than 100 in 1999, to more than 168,000 non-BMMG products and approximately 661,000
BMMG products (books, magazines, CDs, DVDs and video games) as of December 31, 2009. 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.
Worldstock is our socially-responsible, online marketplace through which artisans in the United States and around the world can sell their products and
gain access to a broader market.
Fulfillment Operations
General
When customers place orders on our Website, orders are fulfilled either by a third-party fulfillment partner or directly from our warehouses in Salt Lake
City, Utah. We monitor all of these sources for accurate order fulfillment and timely shipment.
Payment Terms
Generally, we require verification of receipt of payment, or authorization from credit card or other payment vendors whose services we offer to our
customers (such as PayPal and BillMeLater), before we ship products to consumers or business purchasers. From time to time we grant credit to our business
purchasers with normal credit terms (typically 30 days). However, for most sales in our fulfillment partner business, we generally receive payments from our
customers before our payments to our suppliers are due.
Fulfillment for Direct Business
During 2009, we fulfilled approximately 15% of our order volume through our leased warehouses in Salt Lake City, Utah (see Item 2 of Part I,
"Properties"). Our warehouse staff generally shipped between 7,000 and 10,000 orders per day, and up to 32,000 orders per day during peak periods. We also
process returns of direct and fulfillment partner merchandise in the Salt Lake City warehouses. Our warehouses store approximately 7,000 non-BMMG
products offered on our Website.
Fulfillment Partner Business
During 2009, approximately 85% of our order volume was for inventory owned and shipped by third-party fulfillment partners. We currently coordinate
with approximately 1,250 fulfillment partners that collect orders through our Website. These third-party fulfillment partners perform essentially the same
operations as our warehouse: order picking and shipping; however, we handle returns and customer service related to substantially all orders placed through
our Website.
Sales and Marketing
We use a variety of methods to target our consumer audience, including online campaigns, such as advertising through portals, keywords, search engines,
affiliate marketing programs, banners, e-mail and direct mail campaigns, and we are able to monitor and evaluate their results. We seek to identify and
eliminate campaigns that do not meet our expectations. We also do brand advertising through television, radio, and print ads. We generally develop these
campaigns internally and believe that doing so is cost-effective.
Customer Service
We are committed to providing superior customer service. We staff our customer service department with dedicated in-house professionals and
outsourced professionals who respond to phone,
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