Company: NEGG
Filing Date: 2025-04-28
Form Type: 20-F
Source: 0001213900-25-036055
Chunk: 76

Company: Newegg Commerce, Inc.
Filing Date: 2025-04-28
Form: 20-F
Item: Item 4A
Chunk 76
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a broad mix of brands and sellers. As of December 31, 2024, we offered approximately 4.4 million SKUs across over 1,510 categories.
Products are offered on our online platforms across a range of types, brands, and price points. We believe that customers are attracted
to our online platforms primarily by the breadth and depth of our product offerings, a critical component of our ability to increase sales
and drive long-term profitability.

Our results of operations are affected by our
merchandise mix, as products of different categories, brands and price points have a range of margin and profitability profiles. For example,
categories where we hold lower market share and we strive to grow at an accelerated rate over market may offer relatively lower margins.
Our merchandise mix may shift over time due to the combination of a variety of factors, including consumer demands and preferences, average
selling prices, our ability to maintain and expand our supplier relationships, our ability to forecast market trends, and our marketing
and promotional efforts. We continuously monitor the GMV and margin mix of our product offerings and we seek to increase the percentage
of GMV and net sales from categories and brands with attractive margin profiles.

Success of Newegg Marketplace

A key component of our long-term strategy is the
success of our Newegg Marketplace, which we believe is an important driver of future profitable growth.

For the years ended December 31, 2024, 2023, and
2022, our Newegg Marketplace generated GMV of $318.6 million, $369.7 million, and $552.2 million, respectively, and accounted
for approximately 20.8%, 20.4% and 25.1%, respectively, of our total GMV. During the same periods, our Newegg Marketplace generated
net sales of $25.2 million, $32.3 million, and $47.0 million, respectively, and accounted for 2.0%, 2.2%, and 2.7%, respectively,
of our total net sales. The decrease in GMV and net sales in our Marketplace business for the year ended December 31, 2024 versus prior
years was primarily driven by softening consumer demand amid macroeconomic uncertainties. Additionally, the decrease was influenced by
a strategic reduction in underperforming sellers, as part of our enhanced quality control and fraud prevention measures.

Our results of operations have been, and will
continue to be, influenced by shifts over time in the GMV