Amazon.com, Inc (NASDAQ:AMZN) has launched a new service called Prints, which is responsible for printing digital photos, as well as creating custom photo books. Due to this service released by Amazon, Shutterfly, Inc. (NASDAQ:SFLY) suffered the worst dailydecline that it has seen in over 8 years. Stocks plunged by 12% during the late afternoon.
Amazon prints versus Shutterfly
Amazon is indeed a giant corporation, therefore, new services that are unveiled by the company is expected to take off rapidly. However, Amazon has taken the necessary precautions to rival its competitor in this particular industry.
The first reason that Amazon service prints gained a rapid following, whilst Shutterfly’s fell, is due to the pricing that Amazon has allocated for its services. The basic page printing for Amazon ranges between $0.09, $0.58, as well as $1.79. While Shutterfly’s printing price range is $0.15, $0.99, $3.99 respectively.
However, the cheapest Amazon photo book will be released at a price of $19.99, which is a comparable expense when putting in comparison with the basic Shutterfly photo book, which starts at a price of $15.99.
The disadvantage of Amazon prints
A pitfall for Amazon Prints is that currently, it is only available in the U.S, in addition to this, in order to qualify to use the product; you have to have either an Amazon Prime or Amazon Drive membership. The pricing for membership for, Amazon Prime is $99 per year, $49 for students. The cost of Drive membership is $59.99 per year.
It has been estimated that currently, there are between 45 million to 63 million Amazon Prime subscribers, these statistics are derived from the U.S alone. If you have a Prime membership, you already receive the free perk of unlimited storage space for photos, if however, you are only an Amazon Drive member, you will be liable for an additional $11.99 per year for this feature.
The CEO of Amazon, Jeff Bezos, stated that the current key priority for Amazon is rapidly growing the number of active Amazon Prime memberships. The company has taken up various promotions including, free same-day deliveries, streaming videos and so forth in order to increase the willingness to become an Amazon Prime member.