Stamps.com’s stock drops 50% after it ends its exclusive partnership with the USPS

After Stamps.com announced it would end a partnership with the USPS, its stock dropped 50% -- but it may be an even worse deal for the USPS.


February 24, 2019

After announcing that it would not renew its multi-decade exclusive shipping partnership with the US Postal Service, Stamps.com’s stock price fell more than 50%. 

But since the 2-day shipping e-commerce era began, the USPS has also struggled to compete with Amazon and other quicker competitors, and now it will lose a key partner. 

It’s a sticky situation on both sides of the stamp 

In an announcement, Stamps.com revealed that it expects its sales to decline this year and its earnings to be cut in half due to its reliance on the slow-moving USPS.

But the USPS, which posted a $3.9B loss in 2018, also lost a money hauler in Stamps.com, an exclusive USPS partner since its 1996 launch, which did $536.9m in revenue last year.

According to Stamps.com CEO Ken McBride, the USPS is “working hard to compete in the e-commerce shipping industry, but … they have many issues to deal with that the more nimble product carriers do not.”

Amazon: The postage with the mostage 

“Really, everybody needs to work with Amazon,” McBride told Business Insider.

Amazon still ships some packages through UPS, USPS, and FedEx. But the e-commerce giant is building its own delivery fleet to speed up its fulfillment process and, unlike the USPS, Amazon guarantees 2-day shipping. 

Amazon says it has no plans to become a 3rd-party platform, but now that its delivery capacity has outpaced standard packager delivery, it’s hard to predict how the USPS will survive. 

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