Overstock.com 2013 Annual Report Download - page 12

Table of Contents
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Our Annual Report on Form 10-K, Quarterly Reports on Form 10-Q, Current Reports on Form 8-K and other reports filed or furnished pursuant to
Section 13(a) or 15(d) of the Securities Exchange Act of 1934 are available free of charge through our the Investor Relations sections of our main website
www.overstock.com as soon as reasonably practicable after we electronically file such material with, or furnish it to, the Securities and Exchange
Commission. Our Internet Website and the information contained therein or connected thereto are not a part of or incorporated into this Annual Report on
Form 10-K.
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We are an e-commerce business and we depend on the continued use of the Internet and the adequacy of the Internet infrastructure.
Our business depends upon the widespread use of the Internet and e-commerce. Factors which could reduce the widespread use of the Internet for e-
commerce include:
•actual or perceived lack of security of information or privacy protection;
•cyber-attacks or other disruptions or damage to the Internet or to users’ computers;
•significant increases in the costs of transportation of goods; and
•taxation and governmental regulation.
We depend on our relationships with independent fulfillment partners for a large portion of the products that we offer for sale on our Website. If
we fail to maintain these relationships, our business will suffer.
At December 31, 2013, we had relationships with approximately 2,400 independent fulfillment partners whose products we offer for sale on our
Website. Sales through our fulfillment partners accounted for 88% of our net revenues for the year ended December 31, 2013, respectively. If we do not
maintain our existing relationships or build new relationships with fulfillment partners on acceptable commercial terms, we may not be able to maintain a
broad selection of merchandise, and our business and prospects would suffer severely. Our agreements with fulfillment partners are generally terminable at
will by either party upon short notice.
We depend on our fulfillment partners to perform certain services regarding the products that we offer.
In general, we agree to offer the fulfillment partners’ products on our Website and these fulfillment partners agree to conduct a number of other
traditional retail operations such as maintaining inventory, preparing merchandise for shipment to our customers and delivering purchased merchandise on a
timely basis. We may be unable to ensure that these third parties will continue to perform these services to our satisfaction or on commercially reasonable
terms. In addition, because we do not take possession of these fulfillment parties’ products (other than on the return of such products), we are generally unable
to fulfill these traditional retail operations ourselves. If our customers become dissatisfied with the services provided by these third parties, our business and
reputation and the Overstock.com brand could suffer.
Risks associated with the suppliers from whom our products are sourced and the safety of those products could adversely affect our financial
performance.
Global sourcing of many of the products we sell is an important aspect of our business. We depend on our ability to access products from qualified
suppliers in a timely and efficient manner. Political and economic instability, the financial stability of suppliers, suppliers’ ability to meet our standards,
labor problems experienced by our suppliers, the availability of raw materials, merchandise quality issues, currency exchange rates, transport availability and
cost, transport security, inflation, and other factors relating to the suppliers and the countries in which they are located are beyond our control. We also largely
rely on our supplier's representations of product content and quality. Concerns regarding product content or quality, or the safety of products that we source
from our suppliers could cause shoppers to avoid purchasing certain products from us, or to seek alternative sources of supply for all of their needs, even if
the basis for the concern is outside of our control. Any lost confidence on the part of our customers would be difficult and costly to reestablish. As such, any
issue regarding the safety of
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