BUSINESS SEGMENTS

9 Months Ended

Sep. 30, 2013

Segment Reporting [Abstract]

BUSINESS SEGMENTS

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 three and nine months ended September 30, 2013 and 2012. 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 three and nine months ended September 30, 2013 and 2012 (in thousands):

	Three months ended    September 30,						Nine months ended    September 30,
			Fulfillment						Fulfillment
	Direct		partner		Total		Direct		partner		Total
2013
Revenue, net	$	35,681	$	265,745	$	301,426	$	113,873	$	792,751	$	906,624
Cost of goods sold	30,777		211,499		242,276		99,768		630,931		730,699
Gross profit	$	4,904	$	54,246	$	59,150	$	14,105	$	161,820	$	175,925
Operating expenses					55,692						160,887
Other income, net					166						339
Provision for income taxes					91						449
Net income					$	3,533					$	14,928
2012
Revenue, net	$	34,215	$	221,137	$	255,352	$	109,048	$	648,207	$	757,255
Cost of goods sold	30,684		178,126		208,810		99,422		520,614		620,036
Gross profit	$	3,531	$	43,011	$	46,542	$	9,626	$	127,593	$	137,219
Operating expenses					44,767						132,950
Other income, net					1,049						1,795
Provision for income taxes					131						182
Net income					$	2,693					$	5,882

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 three and nine months ended September 30, 2013 and 2012, 99% of sales revenues were attributable to customers in the United States. At September 30, 2013 and December 31, 2012, all of our fixed assets were located in the United States.