UPS and Stamps.com collaborate on reseller deal

Earlier this week, UPS and Stamps.com announced that they have partnered up for a large scale reseller agreement, with Stamp.com’s 740,000-plus customer base gaining access to specially discounted UPS shipping rates,” up to 55% off daily rates, including some waived surcharges, as well as seamless UPS connectivity for e-commerce that is integrated with Stamp.com platforms.

This is the latest in a broad offering of Web-based shipping software services offered by Stamps.com, coupled with others it has with ShipStation, ShippingEasy, ShipWorks, Stamps.com, and Endica, which it said enables small and medium-sized e-commerce shippers function more smoothly.

“UPS wants to make the shipping process seamless for small businesses, so they can focus on growing their business,” said Kevin Warren, UPS Chief Marketing Officer, in a statement. “By collaborating with Stamps.com, their e-commerce customers will have easy access to UPS within the same familiar platform they’ve been using, offering them more choice and control over their shipping needs.”

And Ken McBride, Stamps.com Chairman and CEO, noted that this collaboration brings UPS’s shipping services to its customer base more simply and seamlessly with new discounts he said were attractive.

“We want to empower our customers, and we know that delivery speeds and competitive rates are an important factor for small business success,” he said.

While UPS said that discounts up to 55% off of daily rates and various waived surcharges will be provided to Stamps.com customers, there are still no details regarding minimum charge or dimensional relief that mitigate many discount concessions, observed Gordon Glazer, senior consultant for San Diego-based parcel consultancy Shipware LLC.

“We do know historically these UPS Group Purchasing programs typically come with limitations on who can participate with discounts that most small to mid sized shippers can beat on their own with coaching,” he said. “UPS will be very careful to not dilute existing revenue by excluding existing clients.  In contrast, the USPS Reseller program has little to no visibility on who is using it so few accounts are turned away, and the margin for digitally aggregating USPS volume into these programs generates massive revenue for Stamps.com.” 

Glazer also explained that there are whispers that the USPS is preparing to cancel all Postage reseller programs and replace with a new top line revenue commission for the Postage providers to share with affiliates at a much lower 4%-6%. 

“As part of this, the free credit card processing for Stamps.com is to be eliminated as fee schedules are revised,” he said. “Should this loss of reseller revenue occur it could happen quickly while any new UPS program revenue will take time to ramp up. The calendar was very kind to Stamps.com in the fourth quarter. It was the fear of disrupting postal revenue during this crucial period of time that caused the USPS to delay and defer action on the reseller program.  Don't forget the UPU and International shipping crisis came to a head, too. Stamps was poised to step in with their Global Post program but with the USA remaining [in the UPU], that source of new revenue was greatly diminished. Come February, with the bulk of returns behind them, the USPS will be free to implement changes and then the calendar and the new UPS rev share program may not help Stamps in time.  

John Haber, CEO of Atlanta-based Spend Management Experts, said the collaboration between UPS and Stamps.com is interesting, in that UPS is making a strong push at the small and medium sized shippers through strategic alliances such as Stamps.com, adding that this will be a great move for both companies.

This news was simply viewed as another reseller deal by Jerry Hempstead, president of Hempstead Consulting.

“UPS has had agreements with Unishippers and Worldwide Express for more than ten years,” he said. “I have not yet seen the Stamps.com rate being retailed for UPS, but if they are not comparable to what Stamps.com was peddling for USPS, this might be a yawn. I doubt the rate will attract much FedEx business. The USPS deal with Stamps.com was special, unique, and different, and Stamps.com had a great value proposition, especially for shippers satisfied with USPS service levels. We shall see how competitive the rate is.”