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Note 2 - Revenue Recognition
 3 Months Ended
Jun. 30, 2021
Notes to Financial Statements  
Revenue from Contract with Customer [Text Block]

Note 2:   Revenue Recognition

 

The Company generates revenue by selling pet medication products and pet supplies mainly to retail customers. Certain pet supplies offered on the Company’s website are drop shipped to customers. The Company considers itself the principal in the arrangement because the Company controls the specified good before it is transferred to the customer. Revenue contracts contain one performance obligation, which is delivery of the product; customer care and support is deemed not to be a material right to the contract. The transaction price is adjusted at the date of sale for any applicable sales discounts and an estimate of product returns, which are estimated based on historical patterns, however this is not considered a key judgment. There are no amounts excluded from the variable consideration. Revenue is recognized when control transfers to the customer at the point in time in which the shipment of the product occurs. This key judgment is determined as the shipping point, which represents the point in time when the Company has a present right to payment, title has transferred to the customer, and the customer has assumed the risks and rewards of ownership.

 

Outbound shipping and handling fees are an accounting policy election, and are included in sales as the Company considers itself the principal in the arrangement given its responsibility for supplier selection and discretion over pricing. Shipping costs associated with outbound freight after control over a product has transferred to a customer are an accounting policy election and are accounted for as fulfillment costs and are included in cost of sales.

 

The Company disaggregates revenue in the following two categories: (1) reorder revenue vs new order revenue, and (2) internet revenue vs. contact center revenue. The following table illustrates revenue by various classifications:

 

Three Months Ended June 30,

 

Revenue (In thousands)

 

2021

  

%

  

2020

  

%

  

$ Variance

  

% Variance

 
                         

Reorder Sales

 $70,937   89.4% $80,425   83.6% $(9,488)  -11.8%

New Order Sales

  8,375   10.6%  15,779   16.4%  (7,404)  -46.9%
                         

Total Net Sales

 $79,312   100.0% $96,204   100.0% $(16,892)  -17.6%
                         

Internet Sales

 $66,447   83.8% $81,511   84.7% $(15,064)  -18.5%

Contact Center Sales

  12,865   16.2%  14,693   15.3%  (1,828)  -12.4%
                         

Total Net Sales

 $79,312   100.0% $96,204   100.0% $(16,892)  -17.6%

 

Virtually all of the Company’s sales are paid by credit cards and the Company usually receives the cash settlement in two to three banking days. Credit card sales minimize the accounts receivable balances relative to sales. The Company had no material contract asset or liability balances as of June 30, 2021 or March 31, 2021.