About Stamps.com

Stamps.com Inc. provides Internet-based mailing and shipping solutions in the United States (US) and Europe. The company’s portfolio of solutions is marketed under the brand names Stamps.com, Endicia, Metapack, ShippingEasy, ShipEngine, ShipStation, and ShipWorks. Its software solutions allow customers to print mailing and shipping labels for multiple carriers around the world through downloadable software, web-based user interfaces (UIs) and application programming interfaces (APIs). Its solutions provide its customers with access to discounted carrier rates for select carriers, including the United States Postal Service (USPS) and United Parcel Service (UPS). The company’s customers primarily include small businesses, home offices, medium-size businesses, large enterprises, e-commerce merchants, large retailers and high volume shippers, including warehouses, fulfillment houses and omni-channel retailers. Segments The company operates through two segments: Stamps.com and Metapack. The Stamps.com segment includes the results of brand names Stamps.com, Endicia, ShippingEasy, ShipEngine, ShipStation and ShipWorks. Stamps.com's customers are primarily located in the US. The Metapack segment offers multi-carrier enterprise-level shipping software solutions to large e-commerce retailers and brands who are primarily located in Europe. Services and Products Mailing and Shipping Business The company offers the following mailing and shipping services to its customers under the Stamps.com, Endicia, Metapack, ShipEngine, ShippingEasy, ShipStation and ShipWorks brands: Mailing Solutions As part of its mailing and shipping business, the company offers its USPS-approved solutions to mail and ship a variety of domestic and international mail pieces and packages through the USPS. The company’s USPS mailing solutions enable its customers to print electronic postage using only a personal computing device, printer and Internet connection. Its solutions support a variety of USPS mail classes, including First Class Mail, Media Mail, Parcel Select, Priority Mail, Priority Mail Express, and others. Customers can also add USPS Special Services to their mail pieces, such as Certified Mail, Collect on Delivery, Insured Mail, Registered Mail, Restricted Delivery, Return Receipt, Signature Confirmation and USPS Tracking. Its customers can print postage on NetStamps labels, which can be used just like regular stamps; envelopes and postcards or on labels in a single step process that saves time and provides a professional look; plain 8.5 inches x 11 inches paper; special labels for packages; and on integrated customs forms for international mail and packages. Its USPS mailing solutions also provide its customers with access to discounted postage rates on certain mail classes. Multi-Carrier Shipping Solutions As part of the company’s mailing and shipping business, it offers its industry leading domestic and international multi-carrier e-commerce shipping solutions. The company’s multi-carrier solutions collectively enable its customers to print approved shipping labels for more than 350 regional, national and international carriers and integrate with more than 300 partners, including shopping carts, marketplaces, e-commerce tools and various other software products. Its multi-carrier solutions also provide its customers with access to discounted carrier rates including USPS and UPS. Consolidation Services As part of the company’s mailing and shipping business, it offers domestic and international shipping services through its consolidator partners, who group packages by destination and ship the packages directly or through partners. Back-End Integrations As part of the company’s mailing and shipping services, it offers its back-end integration solutions where it provides the electronic postage for transactions to partners who manage the front-end users. The company’s solutions integrate directly into the most popular e-commerce platforms, allowing web store managers to automate their order fulfillment process by processing, managing and shipping orders from virtually any e-commerce source through a single interface without manual data entry. Managers can retrieve order data and print shipping labels for all types of packages. The company has integration partnerships with the USPS where it provides electronic postage for mailing and shipping transactions generated by certain USPS-branded programs. The company provides the electronic postage for Click-N-Ship, a web-based service available at USPS.com that allows USPS customers to purchase and print shipping labels for certain domestic and international mail classes or packages at no additional mark-up over the cost of postage. Mailing and Shipping Supplies As part of the company’s mailing and shipping services, it offers mailing and shipping-focused office supplies to its customers through its online supplies stores. The company’s supplies stores are available within its mailing and shipping solutions and sell a variety of products, including NetStamps labels, shipping labels, mailing labels, postage printers and scales. Branded Insurance As part of the company’s mailing and shipping services, it offers branded insurance for packages to its customers in an integrated, online process that eliminates any trips to retail carrier locations or the need to complete any special forms. The company’s branded insurance, which is provided by third party insurance providers with which it contracts, is offered by certain of its brands, including Stamps.com, Endicia, ShippingEasy, ShipEngine, ShipStation, and ShipWorks as part of their solutions. The company owns PSI Systems, Inc. (Endicia); Metapack Limited (Metapack); ShippingEasy Group, Inc. (ShippingEasy); Auctane LLC (ShipStation); and Interapptive, Inc. (ShipWorks). Customized Postage Prior to the third quarter of 2020, the company offered customized postage under the PhotoStamps brand name. Customized postage is a patented form of USPS postage that allowed consumers to turn digital photos, designs or images into valid USPS-approved postage. With this product, individuals or businesses could create customized USPS-approved postage using pictures of their children, pets, vacations, celebrations, business logos and more. Customized postage can be used as regular postage to send letters, postcards or packages. PhotoStamps was available from the company’s www.photostamps.com website. As previously disclosed, in the second quarter of 2020, the company received notification from the US Postal Service (USPS) that it was eliminating its customized postage program and also revoking its authorization to offer products pursuant to that program effective June 16, 2020. Seasonality The company’s service revenue is subject to seasonal variation driven by its growth in packages shipped where the fourth calendar quarter (year ended December 31, 2020) is typically seasonally stronger due to the holiday shipping season and to a lesser extent, by customer acquisition which is typically seasonally stronger in the first and fourth calendar quarters and typically seasonally slower in the second and third calendar quarters. Target Customers The company targets different customer segments through its various brands and service plans within those brands. It targets smaller offices, home offices, larger enterprises, e-commerce merchants and higher volume shippers, including warehouses, fulfillment houses and omni-channel retailers. The company’s smaller office and home office customers are primarily mailers but also send some packages. These customers generally need a relatively basic set of mailing and shipping features and primarily use a version of its Stamps.com branded product. The company’s larger enterprise customers are primarily mailers but also send some packages. These customers generally have multiple geographic locations and need a richer set of mailing capabilities, such as multiple-user functionality, automated USPS mail forms, additional reference codes, enhanced reporting and controls. These customers primarily use a version of the company’s Stamps.com branded product. The company’s e-commerce merchant customers are primarily shippers who range in size from individuals to medium size businesses, sell through multiple channels and who ship in medium to higher volumes. These customers generally need a relatively robust set of shipping features, including integrations with shopping carts, marketplaces and e-commerce tools; advanced order management features, including inventory management, combined and split orders, order filters and alerts; sophisticated automation features, such as custom hierarchical rules, batch processing, packing slips, customs forms and emails; robust product management features, including product catalog support and product categorization support; and various other features, including customer marketing, end-to-end package tracking, rate comparisons, returns labels and many more. These customers also generally need access to multiple carriers and discounted carrier rates. These customers primarily use versions of the company’s Stamps.com, Endicia, ShippingEasy and ShipStation branded products. The company’s higher volume shipping customers include warehouses, fulfillment houses and omni-channel retailers, and similar to its e-commerce merchant customers, generally need a relatively robust set of shipping features and need access to multiple carriers and discounted carrier rates. These customers primarily use versions of its ShipEngine, ShipStation, ShipWorks and Metapack branded products. Customer Value Proposition for Mailing and Shipping Business Shippers The company’s shipping customers save time and optimize their shipping operations in a number of ways including: The company’s solutions allow customers to access more than 350 regional, national and international carriers; The company’s solutions integrate with more than 300 partners, including shopping carts, marketplaces, e-commerce tools and various other software products; The company’s solutions provide customers with advanced order management features, including inventory management, combined and split orders, order filters and alerts; The company’s solutions provide customers with sophisticated automation features, such as custom hierarchical rules, batch processing, packing slips, customs forms and emails; The company’s solutions provide customers with robust product management features, including product catalog support and product categorization support; and The company’s solutions provide customers with a variety of other features, including customer marketing, end-to-end package tracking, rate comparisons, and returns labels. The company’s shipping customers save money in a number of ways including: The company’s solutions provide customers with access to discounted carrier rates including from USPS and UPS; The company’s solutions allow customers to optimize carrier services by selecting the lowest cost option based on package size, weight, destination distance and delivery times; and The company’s solutions allow customers to reduce their customer support costs by automatically generating and sending package delivery status emails to customers. Mailers The company’s mailing customers can save money in a number of ways including: The company’s USPS solutions allow customers to receive discounts on single piece First Class letter postage rates and most USPS packages compared to USPS post offices and other retail USPS locations; The company’s USPS solutions allow customers to calculate the exact amount of postage that is required for a mail piece or package depending on mail class, mail form, weight and distance to the destination which allows its customers to avoid overpaying for postage; The company’s USPS solutions allow customers to automatically check and validate destination addresses against the USPS address database so customers do not waste postage on undeliverable-as-addressed mail; The company’s USPS solutions provide customers with advanced reporting and administrative controls that improve the tracking and control of postage spend allowing customers to proactively manage and reduce their postage spend; and The company’s USPS solutions allow customers to save up to 50% or more versus the total cost of operation of traditional postage meters. The company’s mailing customers can save time in a number of ways including: The company’s USPS solutions allow small business customers to mail or ship from their home, office, warehouse or business 24 hours a day, 7 days a week avoiding the time that would ordinarily be spent on a trip to the post office or other retail shipping locations; The company’s USPS solutions allow customers to generate mass mailings quickly and easily by printing the address and postage together in a single step process. In addition, printing the address and postage together saves customers time on a single mail piece or package by combining a two-step process into a one-step process that produces more professional looking mail; The company’s USPS solutions integrate with most small business productivity applications such as word processors, financial applications and address books so its customers can save time by utilizing these integrations to print postage through their existing applications; and The company’s USPS solutions provide customers with advanced reporting so they can easily access and manage their records in one place. This reporting also provides greater visibility into postage activity compared to other USPS solutions, such as post offices and traditional meters. Marketing of Mailing and Shipping Business The company targets its mailing and shipping marketing at smaller offices, home offices, larger enterprises, e-commerce merchants and higher volume shippers, including warehouses, fulfillment houses and omni-channel retailers. The company markets its mailing and shipping solutions through the following channels: Affiliate Channels: The company utilizes the traffic and customers of smaller websites and other businesses or individuals that are too small to qualify for a partnership directly with the company by offering financial incentives for these small businesses and individuals to drive traffic to its website through a third party affiliate management company; Direct Mail: The company sends direct mail pieces to prospective customers with prospect lists purchased from third parties or obtained from partners; Direct Sales: The company utilizes a direct sales force that sells its mailing and shipping solutions to large enterprises and higher volume shippers; Offline Marketing Programs: The company utilizes various other offline advertising and marketing programs, including telemarketing, tradeshows, retail and other programs; Partnerships: The company works with strategic partners in order to leverage their website traffic, marketing programs and existing customer base to distribute its mailing and shipping software. For example, these partnerships may result in a link to its website from a partner’s website, a copy of its software included along with a partner’s software product, the distribution of its software at a retail location or the bundling of its software with a hardware device; Remarketing: The company remarkets its solutions to former customers. The company’s remarketing efforts are generally focused on new features that may relate to the reasons former customers stopped using its service. The company utilize email and regular mail to communicate new features of its products to its former customers; Shipping Integrations: The company markets its solutions through partner integrations with e-commerce platforms, multi-carrier shipping management solutions, shopping cart software and other order-entry management applications; Traditional Media: The company utilizes television commercials and a variety of traditional and internet-based radio endorsements to advertise its solutions; Online Advertising: The company works with companies to advertise its services online through paid searches, banner ads, permission-based emails and other online advertising vehicles; and Carrier Referrals: The company markets to USPS and other carrier account managers with the goal of receiving customer referrals. Business Strategy The company’s 2021 business strategy includes the initiatives and plans. Mailing and Shipping Business: The company plans to continue to execute its strategy to transform its business into a global multi-carrier and e-commerce solutions company in 2021. The company will continue to pursue diversified carrier relationships, such as its partnerships with the USPS and UPS. This strategy also includes leveraging its portfolio of mailing and shipping solutions to drive growth. With the acquisitions of Endicia, Metapack, ShippingEasy, ShipStation and ShipWorks, the company has a full and diverse suite of solutions across these brands, and the company has a complete product and robust solution that will meet the needs of its current and of its target domestic and international customers. The company plans to continue to invest in the shipping part of its business, both domestic and international, where its customers include e-commerce merchants, warehouses, fulfillment houses, large retailers and other types of shippers. In particular, the company plans to continue to expand the features and functionality of its solutions that will improve the value propositions of its solutions for shippers, add new partnerships and integrations, and offers enhanced support. The company also plans to continue offering services, such as its consolidation services program, which bundles domestic or international shipping with valuable customer benefits, such as free package pickup, included loss-protection coverage, upgraded delivery speeds, enhanced tracking, simpler customs procedures and other benefits. Further, the company plans to increase, optimize and refine its enterprise mailing customer lead generation and sales and marketing efforts. The company’s solutions targeted at enterprise customers continue to have a stronger customer value proposition compared to postage meters and its customers continue to be attracted to its enterprise solution versus a postage meter. Research and Development Research and development expense included $95.6 million in 2020. Trademarks The company’s registered trademarks include Stamps.com, Auctane, Endicia, Metapack, NetStamps, PhotoStamps, ShippingEasy, ShipEngine, ShipStation, ShipWorks, and the Stamps.com logo. Competition Retail Mailing and Shipping Locations The company competes with a variety of retail based mailing and shipping offerings from the USPS and non-US postal services, such as Royal Mail in the United Kingdom (UK); and private carriers including UPS, FedEx, and others. Carrier Specific Electronic Solutions The company competes with a variety of carrier specific electronic solutions offered in a variety of formats, including direct UI based solutions, direct API based solutions, and manifesting solutions. Direct UI based solutions of the USPS include USPS.com and USPS Click-N-Ship. Non-US postal services also offer similar API based solutions. The USPS also competes indirectly through authorized PC Postage vendors, including Pitney Bowes with their pbSmartPostage and SendPro products. Direct UI based solutions of private carriers include ups.com, UPS WorldShip, FedEx.com and FedEx Ship Manager. Direct API based solutions of the USPS include USPS Web Tools and Click-N-Ship Business Pro, which utilize the USPS’s electronic verification system (eVS) or ePostage systems for providing access to USPS without needing a PC Postage certification or partnering with a USPS approved PC Postage vendor. Indirect API based solutions for the USPS include those from Shippo and those of other authorized PC Postage vendors, including Pitney Bowes and EasyPost. Manifesting solutions are offered directly by carriers including USPS, UPS, FedEx, and others. Multi-Carrier and Other E-Commerce Solutions The company competes with a variety of multi-carrier and other e-commerce solutions. The company’s UI and API based multi-carrier offerings compete against other multi-carrier offerings, including EasyPost, ProShip, Shippo and others. The company’s multi-carrier offerings also compete with alternative e-commerce solutions including those available through online marketplaces, such as Amazon and eBay; and e-commerce platforms, such as Shopify; warehouse and transportation management systems such as Manhattan and BluJay. In Europe, Metapack primarily competes with transportation and delivery management providers, such as Centiro and Sorted. Traditional Postage Meters The company competes with small business oriented traditional postage meters including those offered by FP Mailing Solutions, Hasler, Neopost and Pitney Bowes in the US market. Customers The company’s mailing and shipping solutions target the home office, home business, small office and small business customers. History The company was founded in 1996. The company was incorporated in Delaware in 1998 as StampMaster, Inc., changed its name to Stamps.com Inc. in 1998.