Stamps.com 2007 Annual Report Download - page 6

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Mailing & Shipping Supplies Store.
Our Mailing & Shipping Supplies Store is available to our customers from within
our PC Postage software, and sells NetStamps labels, shipping labels, other mailing labels, dedicated postage printers,
OEM and private label inkjet and laser toner cartridges, scales, and other mailing and shipping-focused office supplies.
Our Supplies Store features a store catalog, same day shipping capabilities, strong messaging of our free or discounted
shipping promotions, strong cross sell during checkout, product search capabilities, and new expedited and rush shipping
options. We plan to continue to increase the breadth of products offered in our Supplies Store.
2
TABLE OF CONTENTS
Customer Value Proposition for Our PC Postage Service
We believe that customers use our PC Postage services to save time and money. Some of the ways our customers save time
include: (1) applying postage to letters or packages at home or at the office, avoiding the time that would ordinarily be spent in a
trip to the post office, (2) generating mass mailings quickly and easily in a single step process, and (3) using our software as an
integrated package with most small business productivity applications such as word processors, financial applications and
address books. Some of the ways in which our customers can save money include: (1) an automatic check of all addresses
against the USPS database, so postage is not wasted on undeliverable-as-addressed mail; (2) avoiding wasted postage by
calculating the exact amount of postage that is needed depending on mail class, mail form, weight and distance to the
destination; (3) tracking and controlling postage expenditures in a small office using cost codes built into our software; (4)
getting electronic Delivery or Signature Confirmation at approximately 50 cents less per package than the comparable services at
a retail USPS post office; and (5) paying our monthly service fee which is up to 75% less than the total cost of an entry-level
postage meter, where users typically pay monthly rental fees, maintenance fees, postage purchase surcharges, cleaning fees, and
fees for proprietary ink cartridges.
Some of the other benefits of using our service noted by our customers include: (1) mail produced with our service is more
professional looking than stamped mail, helping a smaller business resemble a larger business; (2) our service provides the
ability to send USPS packages with Hidden Postage
TM
, which hides the actual amount paid for postage (a useful feature for e-
commerce companies that may not want the recipient to see actual shipping cost information); (3) our software can help a
business reduce its customer support costs by automatically generating and sending package delivery status e-mails to its
customers; and (4) our service provides a complete record of all mail or packages sent, allowing our customers to easily keep a
record of all sent mail.
Marketing of PC Postage
We target our PC Postage services primarily at small businesses and home offices. We market our PC Postage services
through the following channels:
•
Branded Insurance
. We offer Stamps.com branded insurance to our customers so that they can insure their mail or
packages in a fully integrated, online process that eliminates any trips to the post office or the need to complete any
special forms. We also offer official USPS insurance alongside our branded insurance product. Our insurance is provided
in partnership with Parcel Insurance Plan and is underwritten by Fireman’s Fund.
•
Partnerships.
We work with strategic partners in order to leverage their web site traffic, marketing programs, and
existing customer base to distribute our PC Postage software. For example, these partnerships may result in a link to our
website from a partner’s website, a copy of our software along with a partner’s software product, the distribution of our
software at a retail location, or the bundling of our software with a hardware device. Our partnerships include Microsoft,
where our software is available for download from the Office Update section of Microsoft’s website, Peachtree® and
EarthLink.
• Traditional Online Advertising.
We work with companies to advertise our services online through paid searches, banner
ads, permission-based emails, and other online advertising vehicles.
•
Enhanced Promotion Online Advertising.
We work with various companies to advertise our service in various places
across the Internet. This channel typically offers an additional promotion directly to the customer by the partner in order
to get the customer to try our service.
•
Affiliate Channels.
We utilize the traffic and customers of smaller web sites and other businesses or individuals that are
too small to qualify for a partnership directly with us by offering financial incentives for these small businesses and
individuals to drive traffic to our web site. Our affiliate channel is currently managed by a third party.