Amazon Now in the Printing Business, Big Time

To date this year, Amazon announced its entry into two potential lucrative businesses within the printer/imaging industry, both involving printer consumables. In the beginning of 2016, Amazon announced their Dash Replenishment Program (DRS). The vision was that any consumer device that had consumables and could be monitored via the internet could be a potential DRS target for automatic supplies replenishment whether a washing machine (detergent replenishment), coffee makers, dog food dispenser, oh yes, and now even ink or toner cartridge replenishment for your printers.

Today, over 24 models of Brother printers and 11 models of Samsung printers support Amazon’s DRS program. Both Brother and Samsung worked with Amazon to leverage sensors in the devices to detect when new supplies need to be ordered so the models could support the DRS program and be labeled “Amazon Dash Replenishment Enabled”. Upon detecting that new supplies need to be ordered, an automatic purchase order would be placed on Amazon. With open APIs, expect new applications to be written for a wide variety of applications for the DRS program … one can expect more to follow.

It will be very interesting to see if any other printer manufactures partner with Amazon on their DRS program. Now that HP has acquired Samsung’s printer business, it will be very thought-provoking to see what HP does with this program in light of their own HP Ink in the Office cartridge replenishment program.

On September 21, 2016, Amazon announced another entry into the printing market, their AmazonPrints program, available to Amazon Prime and Amazon Drive customers, allowing them to store and print photos via online ordering. As a result of this announcement, Shutterfly’s stock price dropped 12 percent. The service offers photo prints in 4” x 6” at $0.09/print, 5” x 7” prints at $0.58/print and 8” x 10” at $1.79/print and even offers photo books in a number of configurations. Amazon’s pricing is very competitive against incumbents such as Shutterfly, Snapfish, DotPhoto and others. It is expected that Amazon will offer specialty photo items such as calendars, cards, etc. in the near future. Amazon is hoping to capitalize on the fact that its Amazon Prime members are provided unlimited photo storage and free shipping as part of their monthly ($10.99/month) or annual ($99/year) plans.

With Amazon’s 63 million Prime members as of June 2016 (an increase of 19 million members from June 2015) Amazon has a huge potential customer base that they can upsell to either of these new services. They also have the required infrastructure and processes to effectively handle both of these businesses very cost effectively.

Will Amazon be successful in these new business endeavors?  Of course, time will tell how successful Amazon will be in both businesses since there are many factors effecting success (i.e., product quality, order processing and shipment time, and customer support). Assuming that Amazon addresses these issues successfully, we would not bet against them.

 

 

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