Revenue |
6 Months Ended |
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Jun. 30, 2020 | |
| Revenue [Abstract] | |
| Revenue |
Note 3 - Revenue
The Company has two categories of revenue channels: retail-partner based (“Retail”), which includes the sale of product to e-commerce retailers, pet specialty chains, grocery, mass and distributors, and direct to consumer, (“DTC”), which is focused on driving consumers to directly purchase product through its online web platform.
Retail-partner based channel
The Company’s Retail channel includes the sale of goods to customers for resale. The Company records revenue net of discounts. Discounts primarily consist of early pay discounts, general percentage allowances and contractual trade promotions such as auto-ship subscriptions, and cooperative agreements with third party distributors. Retail-partner based customers are not subject to sales tax. The Retail channel represents 73% and 75% of consolidated revenue for the three and six months ended June 30, 2020, respectively, and 11% for the three and six months ended June 30, 2019.
Shipping costs associated with moving finished products to customers through third party carriers were less than $0.1 million and $0.1 million for the three and six months ended June 30, 2020, respectively, and no shipping costs were recorded for the three and six months ended June 30, 2019, respectively. Such shipping costs are recorded as part of general and administrative expenses.
Direct to consumer channel
The Company’s DTC products are offered through online stores where customers place orders directly for delivery across the United States. The DTC channel represents 27% and 25% of consolidated revenue of the Company for the three and six months ended June 30, 2020, respectively, and 89% for the three and six months ended June 30, 2019.
Shipping costs associated with moving finished products to customers were $0.3 million and $0.7 million for the three and six months ended June 30, 2020, respectively, and $0.6 million and $1.2 million for the three and six months ended June 30, 2019, respectively. Such shipping costs are recorded as part of general and administrative expenses.
The Company’s DTC loyalty program enables customers to accumulate points based on spending. A portion of revenue is deferred at the time of the sale when points are earned and recognized when the loyalty points are redeemed. As of June 30, 2020 and December 31, 2019, customers held unredeemed loyalty program awards of $0.3 million and $0.2 million, respectively. The Company recognized revenue of $0.1 million and $0.3 million from the loyalty program for the three and six months ended June 30, 2020, respectively, and less than $0.1 million and $0.1 million for the three and six months ended June 30, 2019, respectively.
The amount included in net sales related to recoveries of shipping costs from customers for direct to consumer sales was $0.1 million and $0.2 million for the three and six months ended June 30, 2020, respectively, and $0.2 million and $0.4 million for the three and six months ended June 30, 2019, respectively.
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