Stamps.com 2005 Annual Report Download - page 6

products of 2005. From the May to December 2005, we shipped more than 500,000 sheets, or more than 10 million individual
PhotoStamps.
We are currently authorized by the USPS to sell PhotoStamps for a one year market test that runs through May 2006. We have begun
discussions with the Postal Service about the next steps for PhotoStamps and are encouraged by those discussions so far. In addition,
upper management of the US Postal Service has made several positive public statements about customized postage, and the US Postal
Service also mentioned the customized postage program as part of its 2006 to 2010 Strategic Transformation Plan which was
published during the third quarter of 2005. While we are hopeful that the USPS will ultimately approve the continuation of our
PhotoStamps offering following the end of this second test period, there are many risks related to this offering, including the
possibility that the USPS disallows our continued sale of PhotoStamps after May 2006.
• Supplies Store. With the launch of NetStamps in July 2002, we began selling NetStamps labels directly to our customers via our
Supplies Store (previously also referred to as our “Online Store”) which is available to our customers from within our PC Postage
software. Our Supplies Store has since expanded to sell themed 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. We plan to continue to increase the breadth of products offered in our Supplies Store, in order to enhance customer
convenience.
• Branded Insurance. We offer Stamps.com branded insurance to our users so that they may 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
US Postal Service insurance alongside our branded insurance product. Our insurance is provided in partnership with Parcel Insurance
Plan and is underwritten by Fireman’s Fund.
Customer Value Proposition for the PC Postage Service
We believe that customers use our PC Postage service to save time and money. Our service saves customers time in the following ways:
• Our service allows a customer to apply 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;
• Our service has the ability to generate mass mailings quickly and easily, in a single step process; and
•
Our service saves customers time because of its ability to integrate seamlessly with most small business productivity applications such
as word processors, financial applications and address books.
Our service also saves customers money as follows:
• The service automatically cleanses all addresses so postage is not wasted on undeliverable-as-addressed mail;
• Our service helps customers avoid wasted postage by calculating the exact amount of postage that is needed depending on mail class,
mail form, weight and distance to the destination;
• Our service provides the ability to track and control postage expenditures in a small office using cost codes;
• Customers using our service to ship packages with electronic Delivery or Signature Confirmation save approximately 50 cents per
package versus comparable services at a retail USPS post office; and
• Stamps.com’s service fees are up to 80% less than the total cost of a traditional postage meter, where users typically pay monthly
rental fees, maintenance fees, postage purchase surcharges, and expensive ink charges.
Customers also cite several other additional benefits in using our service, including the following:
• Stamps.com mail is more professional looking than stamped mail;
3