E-Stamp To Provide Online Postage for eBay

E-Stamp Corp. announced today that it has signed a three-year agreement to exclusively sell postage through online auctioneer eBay’s Web site.

Sources close to the deal have indicated that eBay will collect about $10 million (US$) for allowing E-Stamp to pitch computerized stamps to its online auction participants. eBay has attracted more than 7.7 million registered users to its site since its inception in 1995.

“We view E-Stamp Internet postage as a tremendous productivity tool,” said eBay CEO Meg Whitman. “We believe it will save our sellers time by making it easy for them to print postage and help them minimize trips to the post office.”

Drive For Customers

In 1998, the San Mateo, California-based E-Stamp became the first company approved by the U.S. Postal Service to allow consumers to print postage via their personal computers. Since then, E-Stamp has built a base of an estimated 30,000 customers.

Still, E-Stamp is not the leader in the nascent online postage marketplace. The company has been eclipsed by Stamps.com, which now has a customer base that is nearly triple the size.

While E-Stamp plans to promote its services to all eBay users, it will aggressively seek eBay’s so-called “Power Sellers.” These users sell goods worth at least $2,500 a month on eBay, and in some cases use as much as $1,000 a month in postage.

“Our relationship with eBay will help us execute our aggressive seed-the-market strategy as we continue to acquire valuable customers searching for an online postage solution that meets their extensive mailing and shipping needs,” said Robert H. Ewald, president and CEO of E-Stamp.

Joint Marketing Efforts

As a result of this new relationship, officials added that E-Stamp will be prominently featured on eBay’s Web site. The online auctioneer’s users will also enjoy a 50 percent discount on E-Stamp’s $49 Internet postage starter kit, while E-Stamp will waive the charge altogether for “PowerUsers.”

The company will also reduce its convenience fees for users who spend more than $250 on postage at one time. E-Stamp and eBay also plan to offer easy access to E-Stamp’s online supply store by means of a special co-branded micro-site.

eBay and E-Stamp added that they will also engage in a variety of joint marketing efforts, such as special promotions to top sellers, direct mail outreach, and co-branded mailing supplies.

Smooth Beta Test

The two companies tested the first joint promotion toward the end of December with a special holiday offer for eBay members. According to Ewald, the promotion — which was designed to help eBay sellers with their shipping needs during the busy holiday shopping season — was very well received, and generated about 5,000 new accounts for the company.

E-Stamp’s shares gained 1 13/16, or 8.5 percent, to 23 1/16 yesterday. The stock price has risen 36 percent since E-Stamp’s public offering in October.

Last month, E-Stamp also agreed to be the exclusive provider of online postage on Microsoft Corp.’s small-business Web sites.

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