Stamps.com 2006 Annual Report Download - page 7

PhotoStamps is currently available under authorization of the USPS for its third phase market test, with an initial authorization for one
year through May 16, 2007 and an option for the USPS to extend the test for a second year.
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Mailing & Shipping 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.
In September 2006 we launched a brand new Mailing & Shipping Supplies Store within version 6.0 of the PC Postage client software.
This new store features a totally overhauled and reorganized store catalog, same day shipping capabilities, strong messaging of our
free or discounted shipping promotions, strong cross sell during checkout, SKU search capabilities, and new expedited and rush
shipping options. We plan to continue to increase the breadth of products offered in our Supplies Store, in order to enhance our
customer convenience.
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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
U.S. 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 our PC Postage Service
We believe that customers use our PC Postage service to save time and money. Our service saves customers time in at least three ways:
(1) 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; (2) our service has the ability to generate mass mailings quickly and easily, in a single step process; and (3) 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 in at least five ways: (1) our service automatically cleanses all addresses so postage is not wasted
on undeliverable-as-addressed mail; (2) 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; (3) our service provides the ability to track and control
postage expenditures in a small office using cost codes built into our software; (4) 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
(5) our service fee of $15.99/month 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.
Customers also cite several other additional benefits in using our service, including at least five additional items: (1) mail produced with
our service is more professional looking than stamped mail and it helps a small business look more like a big business; (2) our service provides
the ability to send U.S. Postal Service packages with Hidden Postage™, 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; (4) our software can be
incorporated into an existing workflow process for a small business as it integrates into most popular address books and is tightly integrated
with Microsoft® Office®
2003 and later versions; and (5) our service provides a complete record of all mail or packages sent so that a business
can easily keep a complete record of all mail it has sent.
Marketing of PC Postage
Our PC Postage marketing has traditionally been targeted primarily at small businesses and home offices. We have marketed, and plan to
continue marketing, our PC Postage service in several ways, including the following channels:
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