Stamps.com 2015 Annual Report Download - page 15

TABLE OF CONTENTS
Private Carrier Technology Solutions
WecompetewithprivatecarriersbecausecustomersthatchooseaprivatecarriersuchasUPS,FedEx,DHL,oranyothersinstead
oftheUSPS,alsowouldnotuseourUSPStechnologysolution.Whencustomersevaluatecarriers,amongotherfactors,theyconsider
thecostandcomplexityofthetechnologyproductneededtoaccessaparticularcarrier’sservices.Inthiscase,ourservicesand
productscompeteagainstthetechnologysolutionsprovidedbyprivatecarrierssuchasUPSWorldShip,UPS.com,FedExShip
ManagerandFedex.com.Theseprivatecarrierproductsareprovidedatnocosttothecustomer,andinmanycasesalsoincludefree
implementation,freehardwaresuchasprintersorscales,andfreeconsumablesandothersupplies.
Webelievecustomerschooseourproductsandservicesoverprivatecarriertechnologysolutionsinordertoutilizethepackage
servicesoftheUSPostalService,aswellas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privatecarriertechnologysolutionsoverour
solutionswhentheydecidetoutilizeoneoftheprivatecarriersinsteadoftheUSPS,aswellasbecauseoftheadditionalfree
implementation,hardwareorsuppliesthecarrieroffers,thequalityofthecarrier’ssalesandsupportorganization,and/orthetechnical
capabilitiesoftheprivatecarrier’ssolution.InsomecasesacustomermaychooseboththeUSPSandaprivatecarriertomeettheir
needs.
Multi-Carrier eCommerce Solutions
Ourmulti-carriereCommercesoftwareproductsShipStationandShipWorksprovideasolutionformediumandhighvolume
shipperssuchaswarehouses,fulfillmenthouses,e-commerceshippers,largeretailers,andothertypesofhighvolumeshippers
enablingtheuseofmorethanjusttheUSPSfortheirbusiness.Inthisareaofourbusinesswecompetewithalternativemeansavailable
tothosecustomersegments,including:othersimilarmulti-carriersolutions(someofwhichareofferedforfreeforlowervolume
users);warehouseandtransportationmanagementsystemsthatoffermulti-carriershippingcapabilities;packagemanifestingsystems;
eCommerceshoppingcartsthatoffermulti-carriershippingsolutions;andinventorymanagementsolutionsorlistingmanagement
solutionsthatoffermulti-carriersolutions.Inthisareaofourbusinesswealsocompetewithothershippingtechnologyproductssuch
astheprivate-labeledtechnologysoftwareavailableforfreefromprivatecarrierssuchasUPSorFedEx.
Webelievecustomerschooseourmulti-carriereCommerceproductsoveralternativesolutionsbecauseofthecapabilitiesand
performanceofourproducts,thebreadthoffeaturesthatweoffer,thevalueofourproduct,andthequalityofoursalesandsupport
organization.Webelievecustomerschooseothermulti-carriereCommercesolutionsoveroursolutionsbecauseofthehigherfeesthat
wemaycharge,theconvenienceofutilizinganintegratedmulti-carriershippingsolutionaspartofanoveralleCommerceproduct,or
thebreadthanddepthoffeaturesavailableinalargerenterprisesolutionthatalsoincludesmulti-carriershipping.Acustomermayalso
choosetoutilizemultiplesoftwareproductsfromeachindividualcarriersimultaneously(forexample,UPSWorldship,USPSClick-N-
ShipBusinessPro,andFedExShipManager)insteadofasingleunifiedmulti-carriersoftwareproduct.
Industry Overview
Target Customers
OurmailingandshippingservicescurrentlytargetprimarilyU.S.smalloffices,homeoffices,smallbusinesses,enterprisesand
highvolumeshippers,andwithinthesesegmentswetargetbothmailersandshippers.Webelievethenumberofbusinessesthatwecan
servewithourcurrentproductsareasfollows:(1)23.6millionsoleproprietorships;(2)4.6millionsmallbusinesseswith1to9
employees(typicallyusingoursingleuserProservice);(3)1.1millionsmallbusinesseswith10to99employees(typicallyusingour
Proorourmulti-userPremierservice);(4)104,000mediumandlargebusinesseswith100ormoreemployees,whichrepresent1.6
millionseparatelocations(typicallyusingourEnterpriseservice).Inadditionwebelievethereareapproximately24millionnon-
incomegeneratinghomeofficessuchasthoseusedforcorporateafter-hoursworkortelecommuting,thatwecanservicewithour
currentsolutions.Finally,wealsocanservetheindividualconsumermarketwithourlowerpricedsolutions.Dataprovidedhereinis
basedonrecentstatisticsprovidedbytheU.S.CensusBureauandourinternalestimates.
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