Overstock.com 2013 Annual Report Download - page 6

Table of Contents
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We are an online retailer offering discount brand name, non-brand name and closeout merchandise, including furniture, home decor, bedding and
bath, housewares, jewelry and watches, apparel and designer accessories, electronics and computers, and sporting goods, among other products. We also sell
hundreds of thousands of best seller and current run books, magazines, CDs, DVDs and video games ("BMMG"). We sell these products through our
Internet websites located at www.overstock.com, www.o.co and www.o.biz ("Website"). Although our three websites are located at different domain addresses,
the technology and equipment and processes supporting the Website and the process of order fulfillment described herein are the same for all three websites.
Our company, based in Salt Lake City, Utah, was founded in 1997. We launched our initial website in March 1999. Our Website offers our
customers an opportunity to shop for bargains conveniently, while offering our suppliers an alternative inventory liquidation or sales channel. We continually
add new, and sometimes limited, inventory to our Website in order to create an atmosphere that encourages customers to visit frequently and purchase
products before our inventory sells out. We sell products primarily in the United States.
As used herein, "Overstock," "Overstock.com," "O.co," "we," "our" and similar terms include Overstock.com, Inc. and its subsidiaries, unless
the context indicates otherwise.
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We deal primarily in discount, replenishable and closeout merchandise and use the Internet to aggregate both supply and demand to create an efficient
marketplace for selling these products. We provide manufacturers with a one-stop liquidation channel to sell both large and small quantities of excess, closeout
and replenishable inventory without disrupting sales through traditional channels. The merchandise offered on our Website is from a variety of sources
including well-known, brand-name manufacturers. 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. We currently offer approximately 491,000 non-BMMG
products and approximately 805,000 BMMG products. Consumers and businesses are able to access and purchase our products 24 hours a day from the
convenience of a computer, or Internet-enabled mobile device. Our team of customer service representatives assists customers by telephone, instant online chat
and e-mail. We also derive revenue from other businesses, advertising products or services on our Website. Nearly all of our sales are to customers located in
the United States. During the years ended December 31, 2013 and 2012 no single customer accounted for more than 1% of our total net revenue.
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Our direct business includes sales made to individual consumers and businesses, which are fulfilled primarily from our warehouse in Salt Lake
City, Utah. During the year ended December 31, 2013, we fulfilled approximately 12% of our order volume through our warehouse which generally ships
between 3,000 and 5,000 packages per day and up to approximately 6,000 orders per day during peak periods, using overlapping daily shifts.
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For our fulfillment partner business, we sell merchandise of other retailers, cataloguers or manufacturers ("fulfillment partners") primarily through
our Website. We are considered to be the primary obligor for the majority of these sales transactions and we record revenue from the majority of these sales
transactions on a gross basis. Our use of the term "partner" or "fulfillment partner" does not mean that we have formed any legal partnerships with any of our
fulfillment partners. We currently have relationships with approximately 2,400 third parties who supply approximately 488,000 non-BMMG products, as well
as most of the BMMG products, on our Website. These third party fulfillment partners perform essentially the same fulfillment operations as our warehouses,
such as order picking and shipping; however, we handle returns and customer service related to substantially all orders placed through our Website. Revenue
generated from sales on our Shopping site from both the direct and fulfillment partner businesses is recorded net of returns, coupons and other discounts.
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