Overstock.com 2010 Annual Report Download - page 60

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Table of Contents
Results of Operations
The following table sets forth our results of operations expressed as a percentage of total revenue for 2010, 2009 and 2008:
Year ended December 31
2010 2009 2008
(as a percentage
of total revenue)
Revenue, net
Direct 19.2% 17.2% 20.9%
Fulfillment partner 80.8 82.8 79.1
Total net revenue 100.0 100.0 100.0
Cost of goods sold
Direct 17.2 14.9 18.5
Fulfillment partner 65.4 66.3 64.1
Total cost of goods sold 82.6 81.2 82.6
Gross profit 17.4 18.8 17.4
Operating expenses:
Sales and marketing 5.6 6.3 6.9
Technology 5.4 6.0 6.9
General and administrative 5.1 5.6 4.7
Restructuring (0.1) — —
Total operating expenses 16.0 17.9 18.5
Operating income (loss) 1.4 0.9 (1.1)
Interest income — — 0.4
Interest expense (0.3) (0.4) (0.4)
Other income (expense), net 0.2 0.4 (0.2)
Net income (loss) before income taxes 1.3 0.9 (1.3)
Provision for income taxes — — —
Net income (loss) 1.3% 0.9% (1.3)%
Revenue
Total net revenue increased 24% to $1,090 million for the year ended December 31, 2010, from $877 million for the year ended December 31, 2009.
Direct revenue increased 39% to $210 million in 2010 from $151 million in 2009, and fulfillment partner revenue increased 21% million to $880 million
from $726 million.
Total net revenue increased 8% to $349 million for the three months ended December 31, 2010, from $322 million for the three months ended
December 31, 2009. Direct revenue increased 26% to $69.2 million for the three months ended December 31, 2010, from $55.1 million for the three months
ended December 31, 2009. Fulfillment partner revenue increased 5% to $280 million for the three months ended December 31, 2010, from $267 million for
the three months ended December 31, 2009.
The shift of business between direct to fulfillment partner (or vice versa) is an economic decision based on the economics of each particular product
offering at the time and we do not have particular goals for "appropriate" mix or percentages for the size of either. We believe that the mix of the business
between direct and fulfillment partner is consistent with our strategic objectives for our
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