Overstock.com 2011 Annual Report Download - page 22

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Table of Contents
If we do not successfully optimize and operate our warehouse and customer service operations, our business could be harmed.
We have expanded, contracted and otherwise modified our warehouse and customer service operations in the past, and expect that we will continue to do
so. If we do not successfully optimize and operate our warehouse and customer service operations, it could significantly limit our ability to meet customer
demand or result in excessive costs and expenses for the size of our business. Because it is difficult to predict demand, we may not manage our facilities in an
optimal way, which may result in excess or insufficient inventory or warehousing capacity. We may fail to staff our fulfillment and customer service centers
at optimal levels. In addition, we rely on a limited number of companies to deliver inventory to us and to ship orders to our customers. If we are not able to
negotiate acceptable terms with these companies, or they experience performance problems or other difficulties, it could negatively impact our operating
results and customer experience.
The loss of key personnel or any inability to attract and retain additional personnel could affect our ability to successfully grow our business.
Our performance is substantially dependent on the continued services and on the performance of our senior management and other key personnel. Our
performance also depends on our ability to retain and motivate other officers and key employees. The loss of the services of any of our executive officers or
other key employees for any reason, including without limitation, illness or call to military service, or loss to competitors as a result of compensation
differentials or other reasons, could harm our business, prospects, financial condition and results of operations. We do not have employment agreements with
any of our key personnel and we do not maintain "key person" life insurance policies. Our future success also depends on our ability to identify, attract, hire,
train, retain and motivate other highly-skilled technical, managerial, editorial, merchandising, marketing and customer service personnel. Competition for
such personnel is intense, and we cannot assure that we will be able to successfully attract, assimilate or retain sufficiently qualified personnel. Our failure to
retain and attract the necessary technical, managerial, editorial, merchandising, marketing and customer service personnel could harm our business, prospects,
financial condition and results of operations.
We have an evolving business model.
Our business model has evolved and continues to do so. In the past we have added additional types of services and product offerings and, in some cases,
we have modified or discontinued those offerings. We may continue to try to offer additional types of products or services and we cannot offer any assurance
that any of them will be successful. From time to time we have also modified aspects of our business model relating to our product mix and the mix of direct/
fulfillment partner sourcing of the products we offer. We may continue to modify this aspect of our business as well as other significant aspects of our
business. We cannot offer any assurance that these or any other modifications will be successful or will not result in harm to the business. The additions and
modifications to our business have increased the complexity of our business and placed significant strain on our management, personnel, operations, systems,
technical performance, financial resources, and internal financial control and reporting functions. Future additions to or modifications of our business are
likely to have similar effects. We may not be able to manage growth effectively, which could damage our reputation, limit our growth and negatively affect
our operating results.
Our foreign brand domain name may cause confusion in foreign markets.
In July, 2010, we undertook an effort to associate our brand globally with the domain address: www.O.co. We did this in part because in many foreign
markets the word "Overstock" lacked a good foreign cognate. Following a period of testing for the O.co brand and domain address, we returned to the
Overstock.com name as our primary brand domestically because domestic consumer acceptance did
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