Company: NEGG
Filing Date: 2025-04-28
Form Type: 20-F
Source: 0001213900-25-036055
Chunk: 21

Company: Newegg Commerce, Inc.
Filing Date: 2025-04-28
Form: 20-F
Item: Item 3
Chunk 21
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customer dissatisfaction. For example, vendors for semiconductor products, including graphics processing units, have previously experienced
and may continue to experience lead times of more than 12 months. Constraints on the availability of these types of products may adversely
affect our operating results.

Certain products help create and maintain customer
loyalty to the Newegg brand. Failing to maintain an adequate supply of these products could damage our ability to retain customers. We
currently do not carry the full product portfolio of, and in some cases do not carry any products of, certain well-known brands. As a
result, consumers who are searching for those brands may not be able to purchase products from us or purchase them at the most favorable
prices, leading to potentially reduced net sales and net income.

Certain vendors provide a significant portion
of our merchandise. In the United States and Canada, for the twelve months ending December 31, 2024, our ten largest suppliers accounted
for approximately 68% of the merchandise we purchased. Three of our ten largest suppliers, ASI Corporation, MSI Computer Corporation,
and TD Synnex, accounted for approximately 33% of our purchases for the same period. Failure to maintain a positive relationship with
these key suppliers could impact our ability to sell to customers the products they want.

Our vendors’ financial performance, liquidity
and access to capital may be materially adversely affected by many factors, including, but not limited to: general economic factors, such
as a continued slowdown in the U. S. or global economy or an uncertain economic outlook; political or financial instability; merchandise
quality issues; product safety concerns; trade restrictions; work stoppages; tariffs; international trade war; foreign currency exchange
rates; transportation capacity and costs; inflation; or outbreak of pandemics. These and other issues may affect their ability to maintain
their inventories, production levels and/or product quality and could cause them to raise prices, lower production levels or cease their
operations, all of which may in turn materially adversely affect our net sales and net income.

We conduct marketing activities to help
attract visitors to our online platforms, and if we are unable to attract these visitors or convert them into customers in a cost-effective
manner, our business and results of operations could be harmed.

Our success depends on our ability to attract
visitors to our online platforms and convert them into customers in a cost-effective manner. We rely on search engines, social media,
shopping comparison sites and other affiliate networks to provide content, advertising banners and other links