Stamps.com 2015 Annual Report Download - page 14

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TABLE OF CONTENTS
USPS Software Solutions
WecompetewithUSPSprivate-labeleddownloadablesoftwareandAPI(applicationprograminterface)solutionswhichare
offeredunderthebrandnamesClick-N-ShipforBusiness,Click-N-ShipBusinessProandUSPSWebTools.Thesesolutionsare
targetedathighervolumebusinessusersorpartnersandincludeenhancedfeaturesforhighervolumecustomerscomparedtothose
availableatUSPS.com.ForpostagepaymentthesesolutionsutilizetheUSPS’selectronicverificationsystem(eVS),orutilizethe
USPS’ssolutionbrandedePostage,whicharetwosimilarsystemsforprovidingaccesstoUSPSshippingwithoutneedingPCPostage.
eVSandePostageoffermoreconvenientsolutionstohigher-volumeshipperswithcertainadvantageswecannotoffersuchas:(a)
labelscanbeprinted“offline”withoutrequiringaninternetconnection;(b)labelsarenotchargedtoacustomer’saccountuntiltheyare
insertedintothemailstream;(c)eVS/ePostagelabelsdonotexpireandcanbeusedatanytime;(c)eVS/ePostagelabelsdonotneedto
besavedandsubmittedforrefunds;and(c)eVS/ePostagelabelsareabletosupportnewerUSPSfeaturessuchaspackageinterceptand
re-routing,orcertainUSPSreturnsproducts.Additionally,allUSPSsoftwaresolutionsaremadeavailabletocustomerswithno
additionalmonthlyortransactionfees,andtheymayalsobeofferedwithdiscountsonthepostageratesthataresuperiortothe
discountsthatweareabletoprovidetoourcustomers.
WebelievecustomerschooseourproductsandservicesoverUSPSsoftwaresolutionsbecauseofthecapabilitiesandperformance
ofourproducts,thebreadthoffeaturesthatweoffer,andthequalityofoursalesandsupportorganization.Webelievecustomers
chooseUSPSsoftwaresolutionsoveroursolutionsbecauseoftheadditionalfeesthatwemaycharge,theconvenienceofusingoneof
thesesoftwareproducts,and/orthepackagerateswhichareofferedtothecustomerandwhichmaybesuperiortothepackagerateswe
offer.
Traditional Postage Meters
WecompetewithtraditionalpostagemetersofferedbyPitneyBowes,Neopost,FPMailingSolutionsandHaslerintheU.S.
market.Postagemetersoffercustomersasimpleuserinterfaceandoftenworkbetterinahighervolumemailpreparationprocesssince
postagemeterscanaddpostageafteranenvelopehasalreadybeenstuffedandsealed,andcanautomaticallyweighanenvelopeand
addtheappropriatepostage.Additionally,moreexpensivepostagemeterscanaddpostagetoenvelopesatratesthatarefasterthan
postagecanbeaddedusingourPCPostagesolutionsincewearelimitedbythespeedofanofficeprinter.
Webelievethatcustomerschooseourmailingandshippingservicesovertraditionalpostagemetersbecauseofourlowertotal
costofownershipand/orthegreatervisibilityandfinancialcontrolsweprovideandwhicharenotreadilyavailablewithpostage
meters.Webelievecustomerschoosepostagemetersoveroursolutionsbecauseoftheeaseofuse,speed,and/orconvenienceofthose
products.
Other USPS Approved PC Postage Vendors
WecompetewithotherUSPSapprovedpostagevendors.Currently,PitneyBowesistheonlyothersuchvendorinadditionto
Stamps.comandEndicia.
PitneyBowesisthecurrentleaderintheU.S.traditionalpostagemeterbusinesswithrevenuesof$3.6billionin2015,offers
softwareandweb-basedPCPostageservicesandintegrationssimilartoourmailingandshippingservicesandintegrationsunderthe
brandnamepbSmartPostage.PitneyBowesalsoprovidestheapplicationprogramminginterface(API)thatfacilitatesthewebshipping
solutionsavailablethrougheBayandPayPalwheresellersoperatingwithinthosemarketplacesmaypurchaseUSPSshippinglabelsin
aconvenientmanner.PitneyBowesalsooffersacustomizedpostageofferingsimilartoourPhotoStampsandPictureItPostage
offeringsunderthebrandnameCustomPostagefromPitneyBowesthroughapartnershipwithZazzle.com,aprivateU.S.company
thatspecializesinmanufacturingandmarketingofcustomproducts.
WebelievethatourcustomerschooseourmailingandshippingserviceoverthatoftheotherPCPostagevendorbecauseofour
superioruserinterfaceandourlargerbreadthoffeatures.Forexample,(1)wearetheonlymailingandshipping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forinternationalshippingfortheir
Marketplaceusers;(3)wesupportmoreaddressbooksthananyotherPCPostagesoftware;and(4)wearetheonlycompanythatoffers
customerstheadditional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.
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