A Solution for Every Segment

While perhaps best known for its namesake service, Stamps.com’s (STMP) acquisition strategy has yielded a portfolio of highly regarded products catering to shippers at various stages of maturity. The company’s PC Postage solutions, Stamps.com and Endicia, enable mailers and shippers to print USPS postage directly onto envelopes, plain paper or labels with the only requirements being access to a PC, printer and internet connection. Aside from the convenience of purchasing postage online, other key features include discounted postage and insurance rates, address verification, batch label printing, SCAN form generation and integrations with a wide array of online marketplaces, shopping carts and other applications. As the only shipping option is USPS, the company’s PC Postage offerings are typically adopted by smaller shippers that are beginning to see volume growth and experiencing related productivity constraints imposed by alternative postage options such as visiting a retail post office or procuring a label through the online platform where the purchase originated. Stamps.com offers its Pro service for $17.99 per month and its Premier multi-user service for $24.99 per month. An Enterprise tier is also available with customized pricing, which we believe is geared towards large shippers with negotiated USPS rates. Monthly pricing for Endicia Premium is $15.95 per month, while Endicia Professional, which is targeted at larger shippers and warehouse shippers, is $34.95 per month.

As a shipper’s business expands and multiple carriers are required to optimize fulfillment costs, Stamps.com’s multi-carrier software solutions come into play. The company’s multi-carrier brands include ShippingEasy, ShipWorks and ShipStation, and all target e-commerce merchants, online retailers, warehouse shippers, fulfillment houses and other large retailers and shippers. While the core functionality is similar across the various brands, the number of built-in integrations varies. In this regard, ShippingEasy currently has the fewest of the three and is positioned as the entry-level offering for those graduating from a PC Postage solution. Ease of use is one of the more critical requirements, and Stamps.com has expanded the platform beyond shipping to include add-on modules for inventory management and customer relationship management, thereby enabling customers to easily manage multiple functions on a common platform. ShipWorks has double the number of integrations as ShippingEasy and has historically seen success in warehouse and distribution settings. ShipStation has even more integrations and also features automation capabilities allowing customers to create customized rules to optimize their shipping. In essence, ShipStation represents the Rolls Royce of the company’s various multi-carrier solutions. Leveraging the same infrastructure that powers ShipStation, the company also introduced ShipEngine in 2017, a set of multi-carrier shipping APIs. We believe ShipEngine is likely to appeal to larger organizations with in-house IT capabilities as well as other tech-savvy online retailers looking to integrate multi-carrier shipping functionality with other existing systems. Monthly pricing for ShippingEasy and ShipStation is similar with the exception of a free option for ShippingEasy at less than 50 shipments per month versus $9.00 per month on ShipStation, and the latter’s offering of an unlimited plan for $159.00 per month. Otherwise, the pricing tiers across the two platforms are identical starting at $29.00 per month for up to 500 packages and reaching $99.00 per month for 6,000 packages. ShipWorks pricing begins at $25.00 per month for up to 600 shipments and runs as high as $199.00 per month for unlimited shipments. Finally, ShipEngine offers a pay-as-you-go option at five cents per shipment, but also offers monthly plans for $99.00 per month and $179.00 per month for 5,000 and 10,000 shipments, respectively. Negotiated pricing is also available for higher volumes and support levels. More recently, Stamps.com also acquired MetaPack, another multi-carrier software solution. However, MetaPack differs from the aforementioned products given its focus on enterprise-level customers in international markets.

Disclosure(s):

The author holds a long position in Stamps.com (STMP).