BUSINESS SEGMENTS

12 Months Ended

Dec. 31, 2012

BUSINESS SEGMENTS

BUSINESS SEGMENTS

22. BUSINESS SEGMENTS

        Segment information has been prepared in accordance with ASC Topic 280 Segment Reporting. Segments were determined based on how we manage the business. There were no inter-segment sales or transfers during the years ended December 31, 2012, 2011 and 2010. We evaluate the performance of our segments and allocate resources to them based primarily on gross profit. The table below summarizes information about reportable segments for the years ended December 31, 2012, 2011 and 2010 (in thousands):

	Year ended December 31,
	Direct		Fulfillment partner		Total
2012
Revenue, net	$	155,516	$	943,773	$	1,099,289
Cost of goods sold		140,536		760,323		900,859
Gross profit	$	14,980	$	183,450	$	198,430
Operating expenses						(186,269	)
Other income (expense), net						2,993
Provision (benefit) for income taxes						485
Net income					$	14,669
2011
Revenue, net	$	163,609	$	890,668	$	1,054,277
Cost of goods sold		149,660		725,529		875,189
Gross profit	$	13,949	$	165,139	$	179,088
Operating expenses						(196,622	)
Other income (expense), net						(2,046	)
Provision (benefit) for income taxes						(142	)
Net loss					$	(19,438	)
2010
Revenue, net	$	209,646	$	880,227	$	1,089,873
Cost of goods sold		187,124		713,109		900,233
Gross profit	$	22,522	$	167,118	$	189,640
Operating expenses						(174,675	)
Other income (expense), net						(717	)
Provision (benefit) for income taxes						359
Net income					$	13,889

        The direct segment includes revenues, direct costs, and cost allocations associated with sales fulfilled from our warehouses. Costs for this segment include product costs, freight, warehousing and fulfillment costs, credit card fees and customer service costs.

        The fulfillment partner segment includes revenues, direct costs and cost allocations associated with sales fulfilled from warehouses maintained by our fulfillment partners. Costs for this segment include product costs, outbound freight and fulfillment costs, credit card fees and customer service costs.

        Assets have not been allocated between the segments for our internal management purposes and, as such, they are not presented here.

        For the years ended December 31, 2012, 2011 and 2010, over 99% of sales were made to customers in the United States of America. At December 31, 2012 and December 31, 2011, all of our fixed assets were located in the United States of America.