Overstock.com 2012 Annual Report Download - page 46
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Table of Contents
factors: (i) the type of shipping carrier (as carriers have different in-transit times); (ii) the fulfillment source (either our warehouses or those of our
fulfillment partners); (iii) the delivery destination; and (iv) actual transit time experience, which shows that delivery date is typically one to eight
business days from the date of shipment.
We review and update our estimates on a quarterly basis based on our actual transit time experience. However, actual shipping times may differ
from our estimates.
The following table shows the effect that hypothetical changes in the estimate of average shipping transit times would have had on the reported
amount of revenue and net loss for the year ended December 31, 2012 (in thousands):
When we are the primary obligor in a transaction, are subject to inventory risk, have latitude in establishing prices and selecting suppliers, or have
several but not all of these indicators, revenue is recorded gross. If we are not the primary obligor in the transaction and amounts earned are determined
using a fixed percentage, revenue is recorded on a net basis. Currently, the majority of both direct revenue and fulfillment partner revenue is recorded on
a gross basis, as we are the primary obligor. In our statements of operations, we present revenue net of sales taxes.
We periodically provide incentive offers to our customers to encourage purchases. Such offers include current discount offers, such as percentage
discounts off current purchases and other similar offers, which, when used by our customers, are treated as a reduction of revenue.
Direct revenue is derived from merchandise sales to individual consumers and businesses that are fulfilled from our warehouses. Direct revenue
comes from sales that occur primarily through our Website, but may also occur through offline and other channels.
Fulfillment partner revenue is derived from merchandise sales that occur primarily through our Website which fulfillment partners ship directly to
consumers and businesses from warehouses maintained by our fulfillment partners.
We offer a consignment service to suppliers where the suppliers' merchandise is stored in and shipped from our warehouse. We pay the
consignment supplier upon shipment of the consigned merchandise to the consumer. Revenue from consignment service business in 2012, 2011 and
2010 were less than 1% of total net revenues and are included in fulfillment partner segment on a gross basis.
37
2 $ (5,724) $ (818)
1 $ (2,779) $ (391)
As reported As reported As reported
-1 $ 4,597 $ 659
-2 $ 8,856 $ 1,266