- E-Stamp, an authorised online seller of US postage, has announced that it plans to abandon its Internet postage product line in six weeks to focus on providing web-based shipping and business supply-chain execution software for its customers.
Approximately 30% of E-Stamp's workforce will be let go to accommodate the shift in corporate strategy.
Citing widespread dot-com failures, Robert "Bo" Ewald, president and CEO of Mountain View, Calif.-based E-Stamp, said the reality of the Internet evaluation model is far different today than it was a year ago. Ewald said market predictions failed to account for such slow development, which is also being felt by rivals such as Stamps.com.
"It is more expensive to acquire [Internet postage] customers than people would have forecasted," Ewald said. "The amount of shipping around the world is growing due to e-commerce. [But] the amount of first-class postage is flat and declining. Businesses are straying away from regulatory [postage]."
The move, justified as serving the best interest of shareholders, brings to a close E-Stamp's Internet postage business, which has been in existence since it won approval by the US Postal Service in August 1999.
E-Stamp stopped shipments of its Internet Postage starter kits on Nov. 24 and customers may continue to purchase postage until Dec. 31. However, effective Jan. 7 and coinciding with the expected postal rate increase announced by the Postal Service, customers need to pay the letter rate of 34 cents. This can be done using the E-Stamp software. Customer support will stop taking returns March 1, 2001.
All postage needs to be used by then and/or postage refunds must be requested no later than that date.
E-Stamp customers will be encouraged to migrate toward NeoPost Online's Simply Postage service for their Internet postage needs and receive special offers. Notification of the offers will arrive to E-Stamp customers by e-mail and standard mail.
The acquisitions last May of Automated Logistics and Infinity Logistics led to the development of E-Stamp's Digital Shipper and E-warehouse products. These products allow customers to compare delivery companies' shipping rates and services, and address the execution side of supply-chain, order-fulfillment, and inventory services, respectively, Ewald said.