Careers at Overstock.com
Overstock.com’s mission is to save people money.
Overstock.com (commonly abbreviated as “O.co”) is an online retailer that sells a broad selection of price-competitive products. The company maintains two reportable business segments:
- Direct Business – This consists of sales of merchandise from the company’s owned inventory.
- Partner Business – This consists of sales of merchandise from third parties such as manufacturers, distributors, and other suppliers.
The company maintains the following four reportable product segments:
- Home and Garden (Furniture, Home Décor, and Other)
- Jewelry, Watches, Clothing, and Accessories
- BMMG (Books, Magazines, CDs, DVDs and Video Games), Electronics, and Computers
It was the year 1997 and Dr. Patrick Byrne had an idea. He believed that there was an opportunity for retailers to get rid of excess inventory through the then-burgeoning Internet. At that time, the most common channels for doing so were remotely-located outlets that were often a turn-off to consumers because of their limited product variety and crowds. With online shopping taking off, Byrne decided to take a chance – launching a website in March 1999 with no outside funding. Named Deals.com, the company’s stated founding principles were “fair dealing” and “value investing”.
Byrne’s predictions proved accurate – by September of 1999 sales had climbed to $100,000 (a big deal in the early days of Internet retail). In October he renamed the company Overstock.com and unveiled a revamped website. Success continued – in December the New York Times identified it as the site with the biggest percentage increase in average daily users (173,000 customers). Further, the firm ended the year with 290 SKUs, $800,000 worth of inventory, and $1.8 million in revenues.
Despite its success, Byrne saw room for expansion, with a goal of being larger than Amazon within five years. The company had primarily focused on selling the excess inventory of dying dot-com businesses. However, he decided to broaden the scope of his partnerships, accepting closeout merchandise from manufacturers, brick-and-mortar retailers, distributors, importers, and catalog companies. He was able to acquire items at a heavy discount due to the strong demand.
The turn of the century saw more milestones. The company’s inventory grew to 1,480 products across 37 categories. Good Housekeeping magazine selected it as a “Best Place to Find Bargains“. Media Metrix identified it as the 25th top-visited online retail website, with 2.6 million unique visitors. Moreover, it was identified as the 30th biggest online retailer, with $2 million in average monthly sales (up significantly from $3,000 just a year prior). The company ended 2000 with 70 employees and $25.5 million in sales, showing amazing growth.
Because of its strong performance Overstock.com felt confident enough to go public in 2002. The firm now sells new products in addition to closeout merchandise, with over a million items in its inventory. In 2010, it announced it had achieved its first billion-dollar revenue year.
Benefits at Overstock.com
Business model of Overstock.com
Overstock.com has a multi-sided business model, with two interdependent customer segments that are both needed in order to operate:
- Suppliers: Firms in various categories (retail, manufacturing, distribution, etc.) supply the site with excess merchandise for sale to consumers. Overstock.com receives a commission from the firms.
- Consumers: Individuals visit the website and purchase available items.
Overstock.com offers four primary value propositions: accessibility, convenience, price, and brand/status.
The company increases accessibility by making it possible for suppliers who need to get rid of excess store inventory to do it through the online channel. This is particularly necessary for many small retailers who are not able to use third-party brick-and-mortar outlets for this purpose.
The company offers convenience for consumers by enabling them to shop for excess merchandise from their computers. Consequently, they do not have to travel to far-off outlets, spending time and gas money. It also makes shopping easier by offering a wide variety of items (over one million) in numerous categories in a centralized channel.
The company offers consumers a lower price than they would receive from physical outlets that sell excess inventory because it has lower operating expenses. It does not have to worry about many overhead costs, allowing it to pass savings onto customers. Overstock.com estimates it has saved users millions of dollars since its inception.
The company has established a strong brand due to its success. The National Retail Federation ranked it fourth in terms of customer service among online retailers. Other forms of recognition it has received include “Customer Service Department and Retail and Sales Department of the Year“ at the Stevie Awards and Top Ten “Best Place to Work in Corporate America“ by Glassdoor.
Overstock.com’s main channel is its website, through which it acquires new customers; it also sells products on its mobile app. The company promotes itself through TV, radio, print, and online advertising (the latter includes display ads, product listing ads, search engines, banners, e-mail, affiliate marketing programs, and social media campaigns). Further, it markets its offerings through event sponsorships.
Overstock.com’s customer relationship is primarily of a self-service, automated nature. Customers utilize the website while having limited interaction with employees.
The site offers a “Support” section with detailed answers to many potential questions. That said, there is also a personal assistance component as the company provides phone, e-mail, and online chat support.
Overstock.com’s business model entails maintaining a common platform between two parties: suppliers and consumers. The company does not sign long-term contracts with suppliers.
Overstock.com maintains a Partner Program in which suppliers can utilize the company for management of their customer service and return processing. The firm also connects members with:
- Advertising Advisors - Individuals who can help enhance marketing efforts through SKU building, photo services, and customized branding experiences.
- Buying and Partner Care Teams – Groups that can help partners grow their businesses and manage their daily account issues.
Overstock.com’s main resource is its platform, through which it connects suppliers and consumers. It maintains data centers that it uses for backups, development, and testing, among other purposes.
It also depends heavily on various human resources. The company hires technology employees such as computer programmers and software developers to maintain the platform. It also relies to a great extent on sales/marketing employees and on customer service staff (in-house and outsourced) to answer consumer questions through the phone, online chat, and e-mail channels.
Overstock.com has a cost-driven structure, aiming to minimize expenses through significant automation and low-price value propositions. Its biggest cost driver is sales/marketing expenses, a fixed cost. Other major drivers are in the areas of technology (web services, website search, customer support solutions, etc.) and administration, both fixed costs.
Overstock.com has three revenue streams:
- Merchandise Sales: The company generates revenue through the sale of items to consumers.
- Commission Fees: The company generates commissions from suppliers whose items are listed on its site.
- Advertising Revenues: The company generates income from advertising on its shopping page and other pages.
info: Patrick earned a B.A. from Dartmouth College, a Master’s degree from Cambridge University, and a Ph.D. from Stanford University. He previously served as President and CEO of Fechheimer (a uniform manufacturer) as well as of Centricut (a torch part producer).
info: Stormy has held several positions at Overstock.com, including Co-President, Senior VP of Customer and Partner Care, Senior VP of Marketing, and VP of BMMG. Prior to joining the company she gained extensive experience working in the travel and media sectors.
info: Mitch earned an International Business Law degree from Oxford University and a J.D. from Stanford Law School. He previously served as a consultant for Tofana Partners and as the CFO and General Counsel for Razer and Skullcandy.
info: Robert earned a B.S. in Business Administration from the University of California, Berkeley. He previously served as Controller and Vice President at Overstock.com. Prior to joining he acted as Chief Financial Officer of TenFold.
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