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By: Danette Mckay
There is a growing number of online digital photo printing services that allow their users to get their digital photos printed in a convenient and low price manner. But many of those digital photo printing sites have grown to much more than simple printing shops.

Digital online photo printing is one of the earliest online ecommerce businesses. The availability of low prices digital cameras and low price broadband Internet access allow those sites to attract more and more users. But the positive growth came at a price. As technologies such as storage and Internet bandwidth became more and more commoditized the barrier to entry got lower and lower and more and more web sites were established offering the same printing service. With a large number of options users could chose the cheapest site and easily switch between sites at no cost. The result was a quick drop in digital prints prices and in return a sharp drop in digital photo printing services profits.

In order to keep up with market developments the digital photo printing site had to find ways to both attract new users and also up sell unique products with high margins and more lucrative profit prospects. One site that has done exactly that and more is the successful and well known digital photo printing site Snapfish. Snapfish successfully changed its positioning and was flexible enough to not just survive the harsh competition but to become a winner winning more market share and collecting more profits.

Snapfish took a three prongs approach. From a corporate perspective Snapfish decided it was better not to fight alone. Instead the small San Francisco based startup chose to be acquired by Hewlett Packard thus enjoying the economy of scale that HP could provide together with its high expertise in photo printing and its reach to lower cost printing techniques and facilities. From a brand perspective Snapfish has done an remarkable work. Instead of converting the HP brand which is old boring and not very Internet style it has chosen to keep its own brand and just mention the HP name as a side note thus enjoying both worlds of being a small young company but backed up by a well known high quality giant at the same time.

The other approach taken by Snapfish was to attract users for great service and low prices while making money from up selling higher margin unique product to these exact users. Snapfish has kept its standard photo prints products at a very low and competitive level. It also offered new users with plenty of free prints and free trials in order to capture more market share. When users got user to the service Snapfish also offered them unique products that were priced higher and provided much better margins. Products like photos printed on coffee mugs calendars and photo books were the profit engine for Snapfish.

And lastly Snapfish kept up with other Internet trends offering more free unlimited services to its users. The obvious example is Snapfish unlimited photo album uploads and storage for everybody regardless if they print photos or not. The idea behind these free services is simply to keep as many users as possible inside the Snapfish web site hoping that eventually those users will end up buying prints or other products.
Danette Mckay explains about this subject in more depth at snapfish prices
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