Overstock.com 2009 Annual Report Download - page 56

Table of Contents
Change in our accounting for external audit fees to the "as incurred" method instead of the "ratable" method.
Other miscellaneous adjustments, none of which were material either individually or in the aggregate. Certain of these adjustments were related
to a reduction in revenue and cost of goods sold in equal amounts for certain consideration we received from vendors, an increase in inventory,
accounts payable and accrued liabilities to record our sales return allowance on a gross basis, an adjustment to our cash and restricted cash
balances due to compensating balance arrangements and an adjustment to record redeemable common stock for certain shares previously issued
to employees.
The effect of the adjustments on the consolidated statement of operations as of and for the year ended December 31, 2008 is to decrease net loss
attributable to common shares by $1.6 million. All amounts in Management's Discussion and Analysis of Financial Condition and Results of Operations for
the year ended December 31, 2008 have been adjusted, as appropriate, for the effects of the restatement.
A more complete discussion of the restatement can be found in Note 3 to the consolidated financial statements contained in Part IV, Item 15 of this
Form 10-K.
Overview
We are an online retailer offering closeout and discount brand and non-brand name merchandise, including bed-and-bath goods, home décor,
kitchenware, watches, jewelry, electronics and computers, sporting goods, apparel, and designer accessories, among other products. We also sell books,
magazines, CDs, DVDs and video games ("BMMG"). We also operate as part of our Website an online auctions business—a marketplace for the buying and
selling of goods and services—as well as online sites for listing cars and real estate for sale. We also recently launched O.biz, a website where customers can
shop for bulk and business related items.
We offer approximately 168,000 products under multiple departments under the shopping tab on our Website, and offer approximately 661,000 media
products in the Books etc. department on our Website. We have organized our shopping business (sales of product offered through the Shopping section of
our Website) into two principal segments—a "direct" business and a "fulfillment partner" business (see Item 15 of Part IV, "Financial Statements"—Note 25
—"Business Segments"). We include revenue from our auctions, car listings, real estate and consignment operations in the fulfillment partner segment.
Revenue generated from our O.biz website and our international sales is included in either direct or fulfillment partner revenue, depending on whether the
product is shipped from our warehouses or from a fulfillment partner. Less than 1% of our sales are made indirectly to international customers. During the
years ended December 31, 2007, 2008, and 2009, no single customer accounted for more than 1% of our total revenue.
Direct business
Our direct business includes sales made to individual consumers and businesses, which are fulfilled from our leased warehouses in Salt Lake City, Utah.
During the years ended December 31, 2008 and 2009, we fulfilled approximately 15% of our order volume through our warehouses. Our warehouses
generally ship between 7,000 and 10,000 orders per day and up to approximately 32,000 orders per day during peak periods, using overlapping daily shifts.
Fulfillment partner business
For our fulfillment partner business, we sell merchandise of other retailers, cataloguers or manufacturers ("fulfillment partners") through our Website.
We are considered to be the primary
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