We offer products on our website from numerous third-party vendors. In general, we agree to offer products on our website and the manufacturers agree to provide us with information about their products and honor our customer service policies. We have established direct vendor relationships with many key suppliers and intend to continue to seek direct relationships with vendors and suppliers.

Competition

     The market for our products is intensely competitive, rapidly evolving and has relatively low barriers to entry. New competitors can launch new websites at relatively low cost. We believe that competition in our market is based predominantly on:

	•		price;
	•		product selection, quality and availability;
	•		shopping convenience;
	•		customer service; and
	•		brand recognition.

     We currently or potentially compete with a variety of companies that can be divided into several broad categories:

	•		other multi-category online retailers and liquidation e-tailers;
	•		online discount retailers of computer and consumer electronics merchandise such as Buy.com, NewEgg and TigerDirect;
	•		consumer electronics and office supply superstores such as Best Buy, Office Depot, OfficeMax and Staples; and
	•		manufacturers such as Apple, Dell, Gateway, Hewlett-Packard and IBM, who sell directly to customers.

     Our largest manufacturers have sold, and continue to intensify their efforts to sell, their products directly to consumers. To the extent additional manufacturers adopt this selling format or this trend becomes more prevalent, it could adversely affect our sales growth and profitability.

Intellectual Property

     We have five trademarks and/or service marks that we consider to be material to the successful operation of our business: eCOST®, eCOST.com®, eCOST.com Your Online Discount Superstore!®, Bargain Countdown® and Bargain Countdown Platinum Club®. We currently use these marks in connection with telephone, mail order, catalog, and online retail services, as well as with various business services. We have registrations in the United States for eCOST® and eCOST.com® for telephone, mail order, catalog, and online retail order services, and a registration for Bargain Countdown® for online retail order services. We also have a registration in the United States for Bargain Countdown Platinum Club® for business services, namely, promoting the goods and services of others by means of a customer loyalty program featuring information, incentives, discounts and rewards. We have registrations in Canada and in the United Kingdom for eCOST®, eCOST.com® , Bargain Countdown® and eCOST.com Your Online Discount Superstore!® . We own an additional registration in Canada for Bargain Countdown Platinum Club® .

     We have received a patent from the U.S. Patent and Trademark Office for our proprietary Bargain Countdown® technology, although we cannot provide any assurance that effective patent and trademark protection will be available in all instances, including in other countries in which our products and services may be available.

ALL BUSINESS SEGMENTS

Technology

     We maintain advanced management information systems and have automated key business functions using online, real-time or batch systems. These systems enable us to provide information concerning sales, inventory status, customer payments and other operations that are essential for us and our clients to efficiently manage