PART I
ITEM 1. BUSINESS
GENERAL
PFSweb is a leading provider of outsourcing services. These services include
web-site development and hosting, order management, call center, product kitting
and assembly, order fulfillment, warehousing, credit and collections, technology
capabilities and more. Collectively we define this group of services as Business
Process Outsourcing because we offer our clients infrastructure and technology
capabilities that address an entire business transaction cycle, from demand
generation to product delivery.
PFSweb serves as the "brand behind the brand" for companies seeking to
increase their supply chain efficiencies. As a business process outsourcer, we
offer scalable and cost-effective solutions for manufacturers, distributors,
retailers and direct marketing organizations. We provide our clients with
seamless and transparent solutions to support their business strategies,
allowing them to focus on their core competencies while we provide cost
effective capabilities for areas of their business that are not core
competencies. Leveraging PFSweb's technology, expertise and proven methodology,
we enable client organizations to develop and deploy new products quickly and
implement new business strategies or address new distribution channels rapidly
and efficiently through our optimized solutions. Our clients engage us both as a
consulting partner to assist them in the design of a business solution as well
as a virtual and physical infrastructure partner providing the mission critical
operations required to build and manage that business solution. Together, we not
only help our clients define new ways of doing business, but also provide them
the technology and physical infrastructure necessary to quickly implement this
new business model. We allow our clients to quickly and dramatically change how
they 'go-to-market.'
Each client has a unique business model and unique strategic objectives that
require highly customized solutions. Clients in a wide array of industries, from
computer products to cosmetics to consumer goods to collectibles, turn to PFSweb
for help in addressing a variety of business issues, such as customer
satisfaction, production capacity requirements, vendor integration, supply chain
compression, cost model realignment and international expansion, among others.
We also act as an agent of change, providing clients the ability to alter their
current distribution model, establish direct relationships with end-customers,
and reduce the overall time and costs associated with existing distribution
channel strategies. Our clients are seeking solutions that will provide them
with dynamic supply chain and channel marketing efficiencies, while ultimately
delivering a world-class customer service experience.
Our technology and business infrastructures are adaptable, changeable and
reliable. This flexibility allows us to design custom, variable cost solutions
to fit the business requirements of our client's strategies. Our revenue is
primarily earned from product revenue earned through our master distribution
relationship with certain clients and service fees charged to process individual
business transactions on our client's behalf through our technology and
infrastructure capabilities. These business transactions may include the
answering of a phone call or an e-mail, the design and hosting of a client
web-site, the processing of an electronic credit card authorization, the receipt
and storage of our client's inventory, the assembly of a kit of products to meet
our customers specifications, the shipping of products to our client's customer,
the management of a complex set of electronic data transactions designed to keep
our client's suppliers and customers accounting records in balance, or the
processing of a returned package.
Our capabilities are expansive. In an ongoing quest to offer the most
necessary and resourceful products to our clients, we are continually developing
capabilities to meet the most pressing business issues in the marketplace. Our
business objective is to focus on "Leading the Evolution of Outsourcing." As our
tagline suggests, we will continue to evolve our master distributor
relationships and service offerings to meet the needs of the marketplace and the
demands of unique client requirements. We are most successful when we develop a
new capability to enable a client to pursue a new initiative and we are then
able to leverage that revolutionary development across other client or prospect
solutions as it becomes "best practice" in the marketplace. Our team of experts
design and build diverse solutions for Fortune 1000, Global 2000 and brand name
clients around a flexible core of technology and physical infrastructure that
includes:
o Technology collaboration provided by our suite of technology services,
called the Entente Suite(SM), that are e-commerce and collaboration
services that enable buyers and suppliers to fully automate their
business
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