Company: NEGG
Filing Date: 2025-04-28
Form Type: 20-F
Source: 0001213900-25-036055
Chunk: 60

Company: Newegg Commerce, Inc.
Filing Date: 2025-04-28
Form: 20-F
Item: Item 4
Chunk 60
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 process customer payments, prepare packages for shipment and delivery, and provide
customer service and support. We stock and ship from our own warehouses, and also drop-ship directly to customers from our partners’
warehouses.

Direct sales is a significant driver of our business,
generating approximately 72.3% of our GMV for the year ended December 31, 2024. The success of our direct sales business depends largely
upon our ability to secure a broad selection of products from suppliers at competitive costs. Since the commencement of our operations,
we have sought and cultivated deep, longstanding relationships with some of the biggest IT brands in the world and many of the largest,
most important IT distributors. We continuously seek to build similar relationships with suppliers in new and emerging categories and
geographies. Due to our strong supplier relationships and our purchasing volume, we are able to obtain favorable pricing, early allocation
of new products, preferential allocation of products in shortage, and funding for product promotion and cooperative marketing. We also
enjoy exclusive arrangements with certain suppliers where we are able to offer highly demanded products exclusively on our platforms.
For more information about merchandise sourced for direct sales, see “ - Merchandise Sourcing.”

Marketplace

Our Marketplace operations enable customers to
discover and purchase products from qualified third-party sellers from over 30 countries and regions globally as of December 31, 2024.
As of December 31, 2024, our Marketplace consisted of over 2,400 active sellers based in the United States, over 2,100 active sellers
based in China, and over 600 active sellers coming from other countries. Our Marketplace sellers pay us commissions on their sales, with
published commission rates varying from 8% to 15% according to product category. We also charge membership fees for the additional value-added
services and tools that we provide to sellers based on their enrollment.

Our Marketplace operations consist of the Newegg
Marketplace that launched in 2010, the Newegg B2B Marketplace, and the Newegg Canada Marketplace that launched in 2014. As of December
31, 2024, our Marketplace connected B2C and B2B customers to over 5,200 third-party sellers offering approximately 4.3 million SKUs. Our
Marketplace offers a variety of product categories, including emerging smart home automation, VR, lifestyle electronics, health and beauty
technology products and houses online stores of some of the most well-known brands in the technology industry, such as Dy