Stamps.com 2013 Annual Report Download - page 11

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Competition
The market for our products is competitive. Some of our current direct competitors in the PC Postage and Customized Postage categories
include:
USPS Approved PC Postage Vendors
Endicia.com.
Endicia, a group within Newell Rubbermaid’s Office Products division, is a USPS approved PC Postage vendor that offers
software and web-
based PC Postage services and integrations similar to our PC Postage services and integrations under the brand name Endicia.
Endicia also offers a PC Postage NetStamps-like service in conjunction with Dymo (an affiliated company also owned by Newell Rubbermaid)
under the brand name Dymo Stamps. Endicia also offers a customized postage offering similar to our PhotoStamps service under the brand
name PictureItPostage. All of these services are directly competitive with our own services in these areas.
Pitney Bowes, Inc.
Pitney Bowes, the current market leader in the U.S. traditional postage meter business with revenues of $3.9 billion in 2013,
is an approved PC Postage vendor that offers software and web-based PC Postage services and integrations similar to our PC Postage services
and integrations under the brand name pbSmartPostage. Pitney Bowes also offers an Internet-based service for printing a single label for use in
shipping a package that does not require a monthly subscription fee in partnership with eBay. Pitney Bowes also offers a customized postage
offering similar to our PhotoStamps service under the brand name ZazzleStamps through a partnership with Zazzle.com, a private U.S. company
that specializes in custom products.
We believe that our customers choose our PC Postage service over that of other PC Postage competitors because of our superior user interface
and our larger breadth of features. For example, (1) we are the only PC Postage service that is tightly integrated into the native capabilities of
Microsoft Office for use with Office’s mailing capabilities such as mail merge and envelope printing; (2) we are the only PC Postage provider
with an integration partnership with Amazon.com serving their Marketplace users; (3) we support more address books than any other PC Postage
software; and (4) we are the only company that offers the additional customer choice of our Themed and Photo NetStamps labels. Based on
USPS data and our estimates, we believe we have the highest number of PC Postage customers of any PC Postage provider.
When compared to competitive offerings, we think PhotoStamps offers the best product and overall customer experience in the industry.
PhotoStamps was also the first commercially available customized postage product, and we believe it has the best brand recognition among its
competitors.
Traditional Meters
We also compete with traditional postage meters offered by Pitney Bowes, Neopost, FP Mailing Solutions and Hasler in the U.S. market. We
believe that our customers choose our PC Postage service over traditional postage meters primarily to save money. We also believe that our PC
Postage services and integrations can offer superior capabilities to postage meters in certain areas, such as the ability to integrate tightly with
small business productivity applications and the ability to easily monitor and track USPS packages. We believe customers choose postage meters
over our solutions because of the perceived ease of use of those products versus our current approach of software that runs on a PC.
Other Competition
We also compete with any method of accessing U.S. postage, including but not limited to postage stamps, USPS retail locations, retail locations
that sell postage stamps, USPS online services including but not limited to Click-N-Ship, multi-carrier solutions, e-commerce integrations such
as eBay/PayPal and USPS permit manifest solutions. Some of these competitive offerings are available with no additional markup over the face
value of postage and some are available with discounted postage rates. In the shipping market, we also compete with private carrier shippers
including but not limited to FedEx and UPS.
We believe that our customers choose our service over these alternative methods of accessing postage because of the convenience, capabilities,
reporting and features that are not often available through these alternative methods.
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