Stamps.com, Inc. (STMP)
Interview with: Ken McBride, CEO
Business News, Financial News, Stocks, Money & Investment Ideas, CEO Interview
and Information on their software-only postage service
that offers customers a secure Internet mailing solution to print postage using their
existing PC, printer and Internet connection. |
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Stamps.com
provides a service that allows consumers to print USPS postage for packages or envelopes
using a basic computer printer at an 80% savings over a basic postage meter
Services
Retail/Internet
(STMP - NASD)
Stamps.com, Inc.
Ken McBride
Chief Executive Officer
Interview conducted by:
Lynn Fosse
Senior Editor
CEOCFOinterviews.com
July 2003
CEO Analysis:
Stamps.com, Inc. (STMP - NASD) is the leading provider of Internet-based postage
solutions. Stamps.com™ was the first company to be approved by the U.S. Postal
Service to offer a software-only postage service that offers customers a secure Internet
mailing solution to print postage using their existing PC, printer and Internet connection
without having to go to the post office. Individuals, home offices and small businesses
can now manage their mailing and shipping operations more efficiently and securely than
with postage meters or regular stamps. Stamps.com uses a two-dimensional barcode as a
replacement for traditional postage. This 2-D barcode contains important information about
the mail piece including the sender's identity. Stamps.com's "intelligent"
postage is thus more secure than traditional anonymous stamped mail which offers limited
information and is not traceable back to the sender. Stamps.com is currently working with
the U.S. Postal Service on ways to increase the use of secure mail and reduce the volume
of anonymous mail. “We offer a complete service to our customer
base,” explains Mr. Ken McBride, CEO of
Stamps.com. “Within the area of printing postage from a
home printer, we offer several variations of that. For small businesses that do mass
mailings, they have the ability to print directly on envelopes. With a product by the name
of NetStamps, you can have the ability to print stamps on a sheet of labels. We have a
shipping focus solution that allows you to print 4x6 shipping labels on a plain piece of
paper for a package, and simply tape it to the package and hand it to the mail carrier. We
also offer an array of office products that compliment the service that we offer, such as
scales and envelopes.” When asked about increased competition, Mr. McBride comments, “The barriers to
entry are probably more significant than most industries that you would typically
encounter. We went through a regulatory process with the Postal Service that took about
two-and-a-half years. A lot of that regulatory process was focused around security and the
security of our system. We enable an individual or small business to print currency at
home on their printer because postage is considered legal tender in the U.S. So, in order
to be able to do that, we had to reach a level of security that was far beyond typical
banking institutions. The barriers to entry are very significant. If you were to get
through that two-and-a-half year regulatory process, then there are significant
intellectual property claims of the companies that are already in the industry including
ourselves. We have over a hundred patents that are either issued or pending.”
As to the challenges ahead for Stamps.com, Mr. McBride tells
us, “Our biggest challenge, now that we have gotten many of
these changes in the product behind us, is the marketing of the company. Small business
and home office has been a tough market to reach and requires a very diligent effort in
terms of keeping costs down and making sure that everything we do is a positive return on
investment for shareholders. It is important to get the distribution and a scaleable
marketing program.” Addressing the investment community, Mr. McBride states, “Most potential
investors that are in the company right now are in the stock. I think many people look at
our balance sheet and look at the fact that we have three dollars and eighty-one cents a
share in cash and tend to trade at the $4.50 range and today we are a little higher than
that. The enterprise value of the company relative to the balance sheet is relatively low.
The opportunity going forward with what we have done with the product over the past year
and the position we have in the market place has really put us in a great position to grow
the business going forward.”
Key features of Stamps.com’s services are:
Stamps.com is a software solution - no additional hardware required and you can use
Stamps.com to print postage on envelopes and labels or print sheets of postage stamps with
their new NetStamps feature. Print postage for packages on plain 8 ½" x 11"
paper with discounted electronic Delivery Confirmation and print postage for any mail
class and any amount. Stamps.com supports use of USPS Special Services such as Delivery
ConfirmationTM, Return Receipt, Registered Mail, Certified MailTM,
and Insured Mail.
Benefits of using Stamps.com includes saving time
because it allows you to mail letters and ship packages from your home or office without
having to go to the post office. It lets you buy and print postage 24 hours a day, 7 days
a week ensuring that you will never run out of postage and you avoid long lines at the
post office. It also allows you to save money because Stamps.com is up to 80% cheaper than
a traditional postage meter, verifies addresses which avoids costly returned mail,
calculates the exact postage required avoiding wasted postage and encourages users to take
advantage of competitive USPS shipping rates, saving up to 60% over expensive shippers and
lets you print plain paper shipping labels with discounted Delivery Confirmation (Free for
Priority Mail, $0.13 for First Class, Parcel Post and Media Mail).
Additional features include: Stamps.com integrates
with Microsoft Word, Outlook and your existing address books. It provides address
verification and bar-coded postage ensuring timely and accurate delivery of your mail and
lets you track, monitor and reduce postage expenditures. Stamps.com makes mass mailings
easier -- print postage and address in one step and produce professional-looking mail by
adding your company logo to your mail.
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Stamps.com,
Inc. (STMP)
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