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CONCENTRATIONS
9 Months Ended
Sep. 30, 2014
CONCENTRATIONS [Abstract]  
CONCENTRATIONS

NOTE 11 – CONCENTRATIONS

 

The Company purchases a substantial amount of its products from two vendors; Vendor A and Vendor B. During the nine months ended September 30, 2014, these two vendors accounted for 47% and 33%, respectively of total products purchased. Although we continue to expand our product line and vendor relationships, due to the high concentration and reliance on these two vendors, the loss of one of these two vendors could adversely affect the Company's operations.

 

The Company sells many of its products through various distribution portals, which include Amazon and eBay. During the nine months ended September 30, 2014, these two portals accounted for 85% and 14%, respectively of our total product sales. Due to high concentration and reliance on these portals, the loss of a working relationship with either of these two portals could adversely affect the Company's operations.

 

A substantial amount of payments for our products sold are processed through PayPal. A disruption in PayPal payment processing could have an adverse effect on the Company's operations and cash flow. The Company established an account with a payment processor as an alternate portal for receiving payments for our products sold.

 

Credit Risk

 

The Company minimizes the concentration of credit risk associated with its cash by maintaining its cash with high quality federally insured financial institutions. However, cash balances in excess of the FDIC insured limit of $250,000 are at risk. At September 30, 2014 and December 31, 2013, respectively, the Company had cash balances above the FDIC insured limit of $65,377 and $716,847 respectively. The Company performs ongoing evaluations of its trade accounts receivable customers and generally does not require collateral.

 

Concentration of Funding

 

During the nine months ended September 30, 2014 and 2013, a large portion of the Company's funding was provided by the sale of shares of the Company's common stock to related parties.