Stamps.com 2001 Annual Report Download - page 9

Telemarketing. We market our service using representatives who contact prospective customers over the telephone.
Third-Party Direct Sales. During 2001, we marketed our service using independent third party sales forces. These sales representatives called
on small businesses primarily in commercialized areas of urban markets. Although we believe this channel could potentially be an effective one
in the future, we have not utilized it since June of 2001.
Customer Usage and Retention Programs. We utilize marketing programs that are designed to increase usage of our service by our current
customers, and are designed to reduce the rate at which customers quit our service.
For all of our partner and affiliate channels, and generally all of our marketing programs, we minimize our financial risk and maximize our
return on investment by only utilizing payment structures where we compensate a partner using a bounty or a revenue share only if that partner
has provided a customer to us. During 2001, as part of our restructuring programs, we exited all of our partnerships that required payments that
were not dependent on the number of customers that were delivered to us, such as a fixed up-front payment, and we do not expect to enter any
new partnerships with that structure.
Our Competition
We compete with traditional methods of creating postage, such as postage stamps or postage meters, and we also compete with other Internet
Postage providers, including Neopost Industrie, Pitney Bowes, and Envelope Manager. Based on current information available from the US
Postal Service, we believe that we have over 80% of total Internet Postage customers.
The following is a summary of our current competitors in the PC Postage, or Information Based Indicia Program:
Neopost Industrie. Neopost is a large French postage company with a US presence in the traditional postage meter industry. Neopost has a
commercially available specialty metering device that can be attached to a user's PC and allows a user to download postage to the device from
the Internet. This specialty metering device is not regulated by the open system Information Based Indicia Program because it does not allow
for the printing of postage from standard inkjet or laser printers.
Envelope Manager. Envelope Manager is a small private US based company that launched a software-based Internet postage service
commercially in 2000.
Pitney Bowes, Inc. Pitney Bowes is the current market leader in the traditional postage meter business and had approximately $4.1 billion in
revenues in 2001. Pitney Bowes launched a software-based Internet postage product in April 2000.
In addition to competing with Internet postage vendors for market share of Internet postage sales, we also compete with traditional postage
methods including postage stamps and postage meters. We believe that customer choose our service over other postage methods primarily to
save time and to save costs.
Our service saves customers time in a number of ways. First, our service allows a customer to apply postage to letters or packages at home or at
the office, thus avoiding the time that would ordinarily be spent traveling to, or waiting at, the post office. Second, our service has the ability to
generate mass mailings quickly and easily, in a quick single step process. Finally, our service saves customers time because of its ability to
integrate quickly and easily with most small business productivity applications such as word processors, financial applications, and address
books.
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2002. EDGAR Online, Inc.