E-Stamp Corp. is closing the door on Internet postage, turning instead to Web-based B-to-B shipping and logistics services. E-Stamp will cut its staff of 120 by 30%.
The company plans to use assets it got in May when it bought Automated Logistics and Infinity Logistics. The Internet postage pioneer will sell or license its Digital Shipper software, which lets customers compare shipping options offered by FedEx, United Parcel Service, and other shippers. Digital Shipper also will connect customers with package-tracking services offered by the major shippers. E-Stamp says it has 200 customers using Digital Shipper, including Intel, Oracle, and Sony.
"While Internet postage is a good idea, it takes awhile for it to become a sustainable business," E-Stamp CEO Robert Ewald says. In E-Stamp's third quarter, ended Sept. 30, shipping and logistics accounted for 40% of the company's $1.8 million in revenue. The rest was postage revenue.
E-Stamp is entering an arena with a lot of solid competition from parcel carriers and shippers, says John Fontanella, an analyst with AMR Research. "They will have to work hard to differentiate themselves from what else is out there." Small businesses may be receptive to E-Stamp's inventory-management products, Fontanella adds, because few small companies have automated their stock rooms "beyond the information they may have in a spreadsheet."
Customers will be able to buy postage from E-Stamp until Dec. 31. Neopost Online Inc., a unit of French postal-equipment maker Neopost Inc., has agreed to buy E-Stamp's postage customers for about $250 per customer.