Stamps.com 2010 Annual Report Download - page 17

Download and view the complete annual report

Please find page 17 of the 2010 Stamps.com annual report below. You can navigate through the pages in the report by either clicking on the pages listed below, or by using the keyword search tool below to find specific information within the annual report.

Page out of 100

  • 1
  • 2
  • 3
  • 4
  • 5
  • 6
  • 7
  • 8
  • 9
  • 10
  • 11
  • 12
  • 13
  • 14
  • 15
  • 16
  • 17
  • 18
  • 19
  • 20
  • 21
  • 22
  • 23
  • 24
  • 25
  • 26
  • 27
  • 28
  • 29
  • 30
  • 31
  • 32
  • 33
  • 34
  • 35
  • 36
  • 37
  • 38
  • 39
  • 40
  • 41
  • 42
  • 43
  • 44
  • 45
  • 46
  • 47
  • 48
  • 49
  • 50
  • 51
  • 52
  • 53
  • 54
  • 55
  • 56
  • 57
  • 58
  • 59
  • 60
  • 61
  • 62
  • 63
  • 64
  • 65
  • 66
  • 67
  • 68
  • 69
  • 70
  • 71
  • 72
  • 73
  • 74
  • 75
  • 76
  • 77
  • 78
  • 79
  • 80
  • 81
  • 82
  • 83
  • 84
  • 85
  • 86
  • 87
  • 88
  • 89
  • 90
  • 91
  • 92
  • 93
  • 94
  • 95
  • 96
  • 97
  • 98
  • 99
  • 100

TABLE OF CONTENTS
offers, such as trial periods, discounts on fees, postage and supplies, and other promotions. In addition, we may offer new pricing
plans for new and existing customers. We cannot be sure that customers will be receptive to future fee structures and special
promotions that we may implement. Even though we have established a sizeable customer base, we still may not generate
sufficient gross margins to remain profitable. In addition, our ability to generate revenues or sustain profitability could be
adversely affected by the special promotions or additional changes to our pricing plans.
If we do not successfully attract and retain skilled personnel for permanent management and other key personnel
positions, we may not be able to effectively implement our business plan.
Our success depends largely on the skills, experience and performance of the members of our senior management and other
key personnel. Any of these individuals can terminate his or her employment with us at any time. If we lose key employees and
are unable to replace them with qualified individuals, our business and operating results could be seriously harmed. In addition,
our future success will depend largely on our ability to continue attracting and retaining highly skilled personnel. We may be
unable to successfully attract, assimilate or retain qualified personnel. Further, we may be unable to retain the employees we
currently employ or attract additional qualified personnel to replace those key employees that may depart. The failure to attract
and retain the necessary personnel could seriously harm our business, financial condition and results of operations.
The success of our business will depend upon the continued acceptance by customers of our service.
We must minimize the rate of loss of existing customers while adding new customers. Customers cancel their subscription to
our service for many reasons, including a perception that they do not use the service sufficiently. Also customers may feel the
costs for service are too high, they may be going out of business, or they may have other issues that are not satisfactorily
resolved. We must continually add new customers both to replace customers who cancel and to continue to grow our business
beyond our current customer base. If too many of our customers cancel our service, or if we are unable to attract new customers
in numbers sufficient to grow our business, our operating results will be adversely affected. Further, if excessive numbers of
customers cancel our service, we may be required to incur significantly higher marketing expenditures than we currently
anticipate to replace these customers with new customers.
If we fail to effectively market and sell our services and products, our business will be substantially harmed and could
fail.
In order to acquire customers and achieve widespread distribution and use of our services and products, we must develop and
execute cost-effective marketing campaigns and sales programs. We currently rely on a combination of marketing techniques to
attract new customers including direct mail, online marketing and business partnerships. We may be unable to continue
marketing our services and products in a cost-effective manner. If we fail to acquire customers in a cost-effective manner, our
results of operations will be adversely affected.
If we fail to meet the demands of our customers, our business will be substantially harmed and could fail.
Our services and products must meet the commercial demands of our customers, which include home businesses and offices,
small and medium sized businesses, corporations and individuals. We cannot be sure that our services will appeal to or be
adopted by an ever-growing range of customers. If we are unable to ship products such as items from our Supplies Store or
PhotoStamps in a timely manner to our customers, our business may be harmed. Moreover, our ability to obtain and retain
customers depends, in part, on our customer service capabilities. If we are unable at any time to address customer service issues
adequately or to provide a satisfactory customer experience for current or potential customers, our business and reputation may
be harmed. If we fail to meet the demands of our customers, our results of operations will be adversely affected.
A failure to further develop and upgrade our services and products could adversely affect our business.
Any delays or failures in developing our services and products, including upgrades of current services and products, may
have a harmful impact on our results of operations. The need to extend our core
13