Cabela's 2013 Annual Report Download - page 25

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Any disruption of the supply of products and services from our vendors could have an adverse impact
on our revenue and profitability.
Our vendors and the products and services they provide include the following:
• vendors to supply our merchandise in sufficient quantities at competitive prices in a timely manner;
• outside printers and catalog production vendors to print and mail our catalogs and to convert our catalogs
to digital format for website posting;
• shipping companies, such as United Parcel Service, the United States Postal Service, and common
carriers, for timely delivery of our catalogs, shipment of merchandise to our customers, and delivery of
merchandise from our vendors to us and from our distribution centers to our retail stores;
• telephone companies to provide telephone service to our in-house customer care centers;
• communications providers to provide Internet users with access to our website and a website hosting
service provider to host and manage our website;
• software providers to provide software and related services to run our operating systems for our Retail
and Direct businesses; and
• third-party card processors, such as First Data Resources, to provide processing for Cabela’s CLUB Visa
transactions.
We cannot predict when, or the extent to which, we will experience any disruption in the supply of products
and services from our vendors. Any such disruption could have an adverse impact on our revenue and profitability.
Any disruption in these services could have a negative impact on our ability to market and sell our products,
and serve our customers. Our ten largest trade vendors collectively represented approximately 18% of our total
merchandise purchases in 2013. If we are unable to acquire suitable merchandise or lose one or more key vendors,
we may not be able to offer products that are important to our merchandise assortment. We also are subject to risks,
such as the price and availability of raw materials and fabrics, labor disputes, union organizing activity, strikes,
inclement weather, natural disasters, war and terrorism, and adverse general economic and political conditions that
might limit our vendors’ ability to provide us with quality merchandise on a timely basis. We have no contractual
arrangements providing for continued supply from our key vendors and our vendors may discontinue selling to us
at any time. We may not be able to develop relationships with new vendors, and products from alternative sources,
if any, may be of a lesser quality and more expensive than those we currently purchase. Any delay or failure in
offering products to our customers could have a material adverse impact on our revenue and profitability. We also
rely on our vendors to comply with our social responsibility program, and the failure of a vendor to comply with
our social responsibility program could harm our brand or cause us to terminate a vendor prior to securing an
alternative source for the terminated vendor’s products or services. In addition, if the cost of fuel rises, the cost to
deliver merchandise to the customers of our Direct business and from our distribution centers to our retail stores
may rise which could have a material adverse impact on our profitability.
In addition, the SEC has adopted rules regarding disclosure of the use of conflict minerals (commonly
referred to as tantalum, tin, tungsten, and gold), which are mined from the Democratic Republic of the Congo and
surrounding countries. We expect to incur costs to design and implement a process to discover the origin of the
tantalum, tin, tungsten, and gold used in the products we sell, and may incur costs to audit our conflict minerals
disclosures. Our reputation may also suffer if the products we sell contain conflict minerals originating in the
Democratic Republic of the Congo or surrounding countries.
Political and economic uncertainty and unrest in foreign countries where our merchandise vendors are
located and trade restrictions upon imports from these foreign countries could adversely affect our ability to
source merchandise and operating results.
In 2013, we imported 57% of our private label merchandise directly from vendors located in foreign
countries, with a substantial portion of the imported merchandise being obtained directly from vendors located
in China, Mexico, and various Far East, Asian, and European countries. In addition, we believe that a significant