A local Internet company is starting to put its stamp on online retailers.
Stamps.com Inc. has traditionally considered its core market to be small businesses and people who work out of their homes. The Marina del Rey-based company’s subscription service allows customers to print postage stamps on adhesive paper in their home or office. Stamps.com markets its service as a time-saving alternative to waiting in line at the post office.
But recently the company began moving into a new market: individuals and small business people who sell items on Internet retailers such as eBay, Amazon, Google Checkout and Yahoo Marketplace. Earlier this month, Stamps.com announced new software that the company claims will streamline the postage process for those who do much of their business on such retail sites.
Stamps.com is being particularly aggressive in trying to capture eBay users: It’s offering them free shipping through the end of the year if they subscribe to Stamps.com’s service by then.
It’s a significant step for Stamps.com, which has seen its stock price falter as its traditional market of small businesses has been crippled by the recession.
“This is an evolution of our product,” said Chief Executive Ken McBride. “The e-commerce area is one we haven’t tackled yet in terms of building better integration. Now we should see better penetration of our product into that market.”
Stamps.com does not have a deal with Amazon, eBay or other Web sites. Instead, it is trying to appeal to the individuals and small businesses that are heavy users of those sites, such as small manufacturers and retailers. Stamps.com is using direct mail and Internet ads to reach them.
The push could be an encouraging signs for shareholders, who have seen Stamps.com shares fall from a high of almost $39 in 2006 to about $9 recently. The company’s annual net income also declined: In 2006, it reported a profit of $16.5 million compared with $10.2 million in 2008.
The recession has been particularly tough for small businesses, which have cut back on services including Stamps.com’s, said George Sutton, managing director at Craig-Hallum Capital Group LLC in Minneapolis, who follows the company.
As its core business has been squeezed, the company has tried to compensate by branching into a growth sector. Internet retail is projected to grow at a blistering pace, from about $132 billion in 2008 to almost $189 billion by 2011. The numbers come from eMarketer Inc., a New York research firm.
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