Amazon undercuts rivals with launch of new photo printing service, Amazon Prints

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Watch out, Shutterfly. Amazon has quietly launched a new service called Amazon Prints, which allows consumers to print photos and custom photo books, and soon, other photo products like stationery and calendars, at prices significantly cheaper than rivals. Though the company made no formal announcement, Amazon Prints debuted last week and is being made available to customers who use the Amazon Drive cloud storage service – in fact, that’s the only way you can use Prints, as it turns out.

The news of the launch caused Shutterfly’s stock to take a big nose-dive, Bloomberg reported. With shares dropping 12 percent to close at $44.20 on Wednesday, it clocked in as the worst single-day decline for Shutterfly stock since February 2008.

Investors’ concerns about Amazon’s entry into this space may be valid. Amazon appears to be using Prints as something of a loss-leader to move customers to its online storage service – and course, Amazon has the server capacity to handle an influx of new customers, too, thanks to its cloud computing business, AWS.

And for consumers, Amazon Prints offers sizable savings over competitors, like Shutterfly.

For example, Shutterfly charges $0.15 for a 4×5 print, while Amazon charges just $0.09. Meanwhile, 5×7 prints are $0.99 on Shutterfly, but only $0.58 on Amazon. The larger 8×10 prints are $3.99 on Shutterfly, and $1.79 on Amazon Prints.

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In addition, Amazon offers affordably priced photo books that start at $19.99. Customers can choose between hardcover-bound books with glossy paper, or Premium Layflat hardcovers with matte paper.

Another notable advantage is that Amazon is offering free standard shipping and free expedited shipping on orders over $15.00, according to the Amazon Prints website.

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However, to use Amazon Prints, there’s a slight catch. Unlike on other services, where you can simply upload files from your computer or via a native mobile application, Amazon Prints requires that you use Amazon Drive. That makes Prints more of an advantage for Amazon Prime subscribers, as one of the benefits of Prime membership is unlimited, free photo storage.

Prime membership, Amazon’s $99 per year service, today offers consumers a growing number of benefits beyond free, 2-day shipping. Over the years, the retailer has added extra perks like free streaming TV and movies, free streaming music, access to a selection of free Kindle e-books, unlimited photo storage, early access to deals, and more.

In other words, while Amazon Prints isn’t exactly a Prime benefit, it helps to make joining Prime look more appealing.

As a non-Prime member, you would instead have to pay $59.99 per year for the Unlimited Storage plan, which lets you save other types of files to Drive, too. (A previously available $11.99/yr Unlimited Photos plan appears to have been discontinued).

Amazon confirmed to us that Prints launched last week, and is currently only available online for its U.S.-based customers using either Amazon Drive or Prime Photos.

Update: Post updated to note the Unlimited Photos plan is now missing from the storage options pricing page.