In 2004 the Bureau of Engraving and Printing produced seven billion stamps at a cost of $22.3 million. The final year of stamp production for the Bureau of Engraving and Printing will be 2005.

3. Stamp Fulfillment Services Activities

During 2004 Stamp Fulfillment Services (SFS) filled 1.9 million customer orders totaling $180.2 million in revenue. Sixty percent of the orders shipped, which generated 56 percent of the revenue, were placed via the Internet. The remaining 44 percent of order volume was generated via USA Philatelic catalog mail orders (23 percent) and 800- STAMP-24 telephone orders (21 percent). In addition, SFS processed 134,000 personalized envelope orders, which generated $66 million in revenue. Total revenue flow at SFS for stamp sales, envelopes, consignments, and product sales was $947 million in 2004.

H. Licensing and Online Services

In August 2004 the Licensing and Online Services functions were merged. The mission of the Licensing and Online Services program is to leverage the Postal Service's intellectual property as a viable resource for consumer products and services developed by licensed commercial firms. Since these licensees' products are widely available in commercial channels, the Postal Service's traditional brand attributes are reinforced, and the Postal Service realizes additional revenue from the sale of these products. This mission supports the Postal Service's Transformation Plan, which calls for the creative leveraging of postal assets in order to increase revenue.

While the Postal Service has many assets, few are as "liquid" as postal intellectual property (IP). Postal IP ranges from the art displayed on postage stamps to the shape and image of rural mailboxes to the familiar blue collection boxes. It is the role of the Licensing and Online Services Group to optimize the total value of these assets.

Online Services maintains two critical brand protection services associated with online stamp sales: BrandVault and The Postal Store. BrandVault is a Web-based archival system that contains all visual intellectual property, such as corporate signatures, corporate logos, and the Postal Service's graphic guidelines. This system includes secured, digital files of stamps, providing a complete reference for each image, which helps maintain the proper use and reproduction of stamp images. The Postal Store provides customers with a secure and convenient Web-based channel to purchase stamps, as well as an ever expanding consumer product line, including licensed merchandise.

The Postal Store also accepts preorders and back orders; provides alternate product suggestions when a first choice is unavailable, and accepts subscriptions.

An enhanced corporate licensing policy, along with frequently asked questions about licensing with the Postal Service, is available on the Web site at http://usps.com/communications/organization/licensing.htm. The Postal Service will continue to seek licensing opportunities while showcasing its current collection.

I. Service and Market Development

1. Commercial Sales

During 2004 the Sales organization improved its ability to help more commercial customers understand how to meet their mailing objectives. A new vision statement was developed — All customers consider Postal Service solutions for their business and personal needs, resulting in a profitable, long-term, business relationship — resulting in a common focus throughout the organization.

Sales also instituted a Platform for Change, which became the foundation of the Sales organization, and includes:

• Expanded coverage.

• Raised expectations.

• Standardized business processes.

• Focus on training and development.

• Improved Headquarters' support and deployment of field strategies.

• Establishment of monthly business reviews between Headquarters and the field.

• Targeted activities to improve communications.

The platform was designed around people, process, and performance to increase the Postal Service's ability to meet customer needs and win their business.

Sales has a one-to-one relationship with about 50,000 large, sophisticated customers. Other emerging accounts are identified from the mid-market; these new growable accounts are transitioned for sales management. These business customers use the Postal Service as a partner to facilitate their interaction with the marketplace.