overstock note - Lake City rather than multiple hundreds of...

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Below is a note from Overstock.com’s 2005 10K. We have used the note to aid in the answering of question five. The portion we have chosen is from page 9, and states: Prior to July 1, 2003, we did not physically handle the merchandise we sold for our fulfillment partners, as the merchandise was shipped directly by them and they handled all customer returns related to those sales. Beginning July 1, 2003, we took responsibility for returned items relating to these sales and we now handle the possible resale or other disposition of returned items. We made the decision to change this policy to have more control over the Overstock customer shopping experience, as we believe that a seamless customer experience is key to creating loyal, long-term customers. By accepting returns at our warehouse in Salt
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Unformatted text preview: Lake City rather than multiple hundreds of different partner warehouses across the United States, we can verify that fulfillment partner products are being packaged and shipped to our standards. Additionally, as customer returns are now all shipped to one location, the process is more convenient for our customers. As a result, since July 1, 2003, we have been the primary obligor for these sales transactions, and we assume the risk of loss on returned items. Therefore, we now record revenue from sales transactions involving our fulfillment partners (excluding auction and travel products) on a gross basis, rather than on a net basis as we did prior to July 1, 2003....
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