By Keith Regan E-Commerce Times
04/18/01 3:31 PM PT
In addition to cutting jobs, Stamps.com has rewritten partnership
agreements so that online partners are paid only when they refer paying customers.
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Buoyed by a sharp rise in sales, Internet postage firm
Stamps.com (Nasdaq: STMP)
said Tuesday it is evaluating a number of
revenue-generating measures, including possibly
raising its monthly minimum price of US$1.99
for its "simple plan" customers.
Thought by many to be destined for the dot-com graveyard
last October when, in the course of two weeks, it lost its
original chief executive officer and laid off nearly half of its staff,
Stamps.com said that sales during the first quarter of 2001
grew 158 percent compared to the same period a year ago, to US$5.3 million.
At the same time, Stamps.com's quarterly loss shrunk to
about $9 million, largely due to two rounds of layoffs .
The Santa Monica, California-based company has
reduced its workforce from more than 500 to fewer than 200, in addition to
lowering marketing costs.
"The initiatives we undertook in the fourth quarter of year
2000 and the first quarter of year 2001 have already begun
to pay dividends in our improved gross margins and narrowed
losses," Stamps.com CEO Bruce Coleman said. "Moving forward,
we plan to continue to streamline our costs while enhancing our
revenue growth toward achieving our goal of
profitability and positive cash flow."
More Revenue Sought
Stamps.com said it
is also considering the use of a paid-for customer
support model during the second quarter 2001.
According to the company,
savings in sales and marketing have already been achieved
through a focus on acquisition of higher revenue "power plan"
customers and through renegotiation or termination
of fixed payment partner relationships. Starting in the second quarter of 2001, partners
will only be compensated on a pay-for-performance basis.
Coleman also said that Stamps.com would start selling
stamps over the phone, and that the company has begun building a database of customers
and potential customers by requiring visitors to the Stamps.com
Web site to register before downloading software.
Taken together with its focus on higher revenue
customers, Coleman said, the steps should help the company
become profitable by the first quarter of 2002.
Tepid Market Reaction
Stamps.com said it remains comfortable with forecasts for
$23 million in sales for all of 2001 and said that it would
reduce cash burn for the year by 80 percent over 2000, to
between $20 million and $25 million.
In early trading Wednesday, Stamps.com was down a penny to $2.99.
The company's 52-week low is $2.21.
Long Road Back
Though Stamps.com debuted with high hopes in August 1998
and its stock flirted with the
$100 level in November 1999, the company
found the expected appetite for Web postage was slow to materialize.
In October, then-CEO John Payne, president and chief operating officer
Loren Smith, chief financial officer John LaValles and comptroller
Candelario Andalon all exited the company.
Due to the weak market for Internet postage,
Stamps.com's rival eStamp (Nasdaq: ESTM) decided in November to
get out of the online postage market
altogether and focus on providing shipping and logistics
support to e-tailers and others.
.
The Santa Monica, California-based company has
reduced its workforce from more than 500 to fewer than 200, in addition to
lowering marketing costs.
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