A virtual seller builds a real-world warehouse

While many e-retailers once thought they could bypass the real world altogether, today they are learning that there's nothing like good old hard inventory to help them keep control over their customer relationship. Overstock.com, an Internet seller of name-brands at clearance prices, began operating its 160,000-square foot warehouse in Salt Lake City Monday. "By investing in our own warehouse space, we are taking full control of the customer experience--from their initial point of purchase on the web site to the timely delivery of the product on their doorstep," says President Karla Bourland. The warehouse enables Overstock.com to continue its rapid sales growth, while ensuring quality customer service--particularly during the upcoming holiday season. In response to averaging nearly 40% monthly sales growth and 25% gross margins since re-launching its site last summer, Overstock.com invested $2 million in a customized warehouse that Bourland designed to incorporate the flexibility and efficiency demands of Overstock.com's liquidation business. Bourland expects that this new facility can support annual sales in excess of $150 million. Overstock.com recently purchased more than $11.5 million (retail value) worth of inventory from ToyTime.com, an Internet toy company that went out of business in June 2000.