Overstock.com 2014 Annual Report Download - page 6

Table of Contents
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We are an online retailer offering price-competitive 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 and
services through our Internet websites located at www.overstock.com, www.o.co and www.o.biz (referred to collectively as the “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 and were re-incorporated in
Delaware in 2002. 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 price-competitive, 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 "partner" business. We currently offer approximately 683,000 non-BMMG
products and approximately 696,000 BMMG products. Consumers and businesses are able to access and purchase our products 24 hours a day from the
convenience of a computer, Internet-enabled mobile telephone or other Internet-enabled 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, 2014, 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, from our owned inventory and that are fulfilled primarily from our
warehouse in Salt Lake City, Utah. During the year ended December 31, 2014, we fulfilled approximately 10% of our order volume through our warehouse,
which generally ships between 2,000 and 5,000 packages per day and up to approximately 12,000 packages per day during peak periods, using overlapping
daily shifts.
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For our partner business, we sell merchandise of other retailers, cataloguers or manufacturers ("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" does not mean that we have formed any legal partnerships with any of our partners. We currently have relationships with
approximately 3,200 third parties who supply approximately 667,000 non-BMMG products, as well as most of the BMMG products, on our Website. These
third party partners generally perform 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
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