Stamps.com 2015 Annual Report Download - page 13
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costperacquisitionatalevelthatprovidesanattractivefinancialreturn.Wealsoplantocontinueoureffortstogeneratehighvolume
businessorderswhichhavebecomealargerpartofourcustomizedpostagebusinessinrecentyears.
Competition
AsaresultofouracquisitionsofEndicia,ShipStationandShipWorks,thenumberofcompanieswithwhichwecompetehas
expanded.WecompetewithallofthealternatewaysthatconsumersandbusinessesmayaccesstheservicesoftheUSPS,including
retailmailingandshippinglocations,USPSonlineproducts,USPSsoftwaresolutions,traditionalpostagemeters,andotherUSPS-
approvedPCPostageproducts.Wealsocompetewithothermulti-carrierproducts,eCommerceproductswithshippingcapabilities,
shippingtechnologyproductsavailablefromprivatecarriers,packagemanifestingsystems,andlargeenterprisesoftwaresolutionswith
shippingfunctionalitysuchastransportationmanagement,warehousemanagement,orenterpriseresourceplanningsystems.
Retail Mailing and Shipping Locations
ThemajorityofourcustomersuseourPCPostageserviceasanalternativetovisitingUSPSorotherretaillocations.TheUSPS
ownsandoperatesapproximately32,000retailpostofficesacrosstheUnitedStates.ManyoftheUSPSretailpostofficesalsofeaturea
USPSkioskforself-servemailingandshippingserviceswithmoreconvenientaccessandoverextendedaccesshours.TheUSPS
authorizesthousandsofadditionalcontractpostoffices,communitypostofficesandvillagepostofficeswhichallowthirdpartiesto
operatepostofficesthatarenotownedbytheUSPS,suchasthoseavailableinHallmarkstores.Wealsocompeteformailingand
shippingcustomerswithalternativessuchaspostagestampsandprepaidUSPSshippinglabelsavailableatgrocerystoresandat
discountchains(suchasCostco).WealsocompetewithUSPSmailingandshippingservicesavailableatsmallbusinessmailingand
shippingcenterssuchasUPSStoresorFedExOfficesstores,andthoseavailableinsideofficesupplystoressuchasStaplesandOffice
Depot.Further,wehavenotbeenapprovedtoofferourcustomers“Forever”postagerateswhichareratesthatdonoteverexpireand
donotrequireextrapostagefollowingapostagerateincrease.
Webelievecustomerschooseourproductsoverretailmailingandshippingservicesbecauseoftheconvenienceofoursolution,
thebreadthoffeaturesthatweoffer,andthequalityofoursupportorganization.Webelievecustomerschooseretaillocationsoverour
solutionsbecauseoftheadditionalfeesthatwetypicallycharge,theconvenienceofutilizingaretaillocation,and/orthepreferencefor
aForeverpostagelabel.
USPS Online Products
WecompetewithonlineservicesavailableatUSPS.com.UsersofUSPS.comareabletoprintshippinglabelswiththesame
postagediscountsthatweoffer,andusingsimilartoolsthatweoffer.ButtheservicesandfeaturesavailableatUSPS.comareprovided
withoutservicefees,creatingadisadvantageforusbecausewetypicallychargeservicefeesinourbusinessmodel.Theservicesat
USPS.comalsointegratewellwithotherUSPSonlineservicessuchaspackagetracking,postofficelocators,andotherUSPSservices.
Additionally,USPS.comacceptsPayPalforpaymentofpostagebutwearenotapprovedtodoso.USPS.comalsonowfeaturesa
mobileapplicationformoreconvenientcustomeraccesstoUSPSservices.
USPSservicesarealsointegrateddirectlyintowebshippingsolutionsavailablethrougheBay,PayPal,EtsyandAmazon.com.
SellersoperatingwithinthesemarketplacesmaypurchaseUSPSshippinglabelsinaveryconvenientmanneraspartofthestandard
checkoutflow.Inalloftheseonlinemarketplaces,customerscanprintpostageforshippingwithoutpayingamonthlyservicefeelike
wetypicallycharge.ThesesolutionsalsofeatureUSPSpackageratediscountsthataresimilartoours,andinsomecasessuperiortothe
discountsweareapprovedtooffercustomers.eBayinparticularhasoffereditssellersUSPS-approvedpostageratesthatarelowerthan
theratesotheronlineUSPSprovidersareapprovedtooffer.ForpostagepaymentthesewebshippingsolutionsusetheUSPS’s
electronicverificationsystem(eVS),theUSPS’ssolutionbrandedePostageoranotherapprovedUSPSPCpostagevendor.
WebelievecustomerschooseourproductsandservicesoverUSPSonlineproductsbecauseofthecapabilitiesandperformanceof
ourproducts,thebreadthoffeaturesthatweoffer,andthequalityofoursupportorganization.WebelievecustomerschooseUSPS
onlineproductstomeettheirshippingneedsoveroursolutionsbecauseoftheadditionalfeesthatwemaycharge,theconvenienceof
usingoneoftheseonlineproducts,and/orthepackagerateswhichmaybesuperiortothepackageratesweareabletooffer.
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