Direct-to-Consumer Financial Management. For DTC clients, we offer secure credit card
processing related services for orders made via a client web site or through our customer contact
center. We offer manual credit card order review as an additional level of fraud protection. We
also calculate sales taxes, goods and services taxes or value added taxes, if applicable, for
numerous taxing authorities and on a variety of products. Using third-party leading-edge fraud
protection services and risk management systems, we can offer high levels of security and reduce
the level of risk for client transactions.
Professional Consulting Services
As part of the tailored solution for our clients, we offer a full team of experts specifically
designated to focus on our clients businesses. Team members play a consultative role, providing
constructive evaluation, analysis and recommendations for the clients business. This team creates
customized solutions and devises plans that will increase efficiencies and produce benefits for the
client when implemented.
Comprised of industry experts from top-tier consulting firms and industry market leaders, our
team of professional consultants provides client service focus and eCommerce, customer care,
logistics and distribution expertise. They have built solutions for Fortune 1000 and Global 2000
market leaders in a wide range of industries, including multi-channel retailers, apparel,
technology, telecommunications, cosmetics, aviation, housewares, high-value collectibles, sporting
goods, pharmaceuticals and several more. Focusing on the evolving infrastructure needs of major
corporations and their business initiatives, our team has a solid track record providing consulting
services in the areas of interactive marketing eCommerce, supply chain management, distribution and
fulfillment, technology interfacing, logistics and customer support.
SELLER SERVICES FINANCIAL MODELS
Enablement Financial Model
We refer to the standard PFS seller services financial model as the Enablement model. In
this model, our clients own the inventory and are the merchants of record and engage us to provide
various business outsourcing services in support of their business operations. We provide
ecommerce website services, inventory and order management, customer service, payment processing,
and operations reports such as product sales, sales tax, and inventory management reports. In this
model, we provide infrastructure and services and the clients are responsible for all financial
operations and reporting related to the sales transactions.
The Enablement model should generate net margins for our clients consistent with other
retailers in our clients product category and the bottom line financial results for our clients
should be similar to other retailers in their space. Service fee revenues in this model will be reported in our traditional PFSweb service fee segment.
Agent (Flash) Financial Model
As an additional service, we offer an Agent model, or Flash model, in which our clients
maintain ownership of the product inventory stored at PFSweb as in the Enablement model. When a
customer orders the product from our client, a flash sale transaction passes product ownership of
each order to a PFSweb subsidiary that, in turn, immediately re-sells the product to the customer.
The flash change in ownership establishes the PFSweb subsidiary as the merchant of record. This
enables us to use our existing merchant infrastructure to process sales to end customers, removing
the need for clients to establish these business processes internally, but permitting clients to
control the sales process to end customers. We accumulate the inventory ownership transactions and
settle them with clients on a mutually agreed upon schedule.
The costs of many of PFSweb services normally billed on a transaction basis under the
Enablement model as well as certain administrative fees and credit risks are covered by the selling
margin under the Agent model. The bottom line financial results for our clients should be similar
to the Enablement model. In this model, the selling margin for product sales will typically be reported in our traditional PFSweb service fee segment although in certain situations
the product revenues will be reported in our PFSweb Retail and Business Connect segment.