Views from Phanfare CEO and Co-founder Andrew Erlichson

Link Phanfare merchandise prices are going up

This is hard post to write, because conventional wisdom is that you don’t announce price increases. But I feel like we are in partnership with our customers and I want to make you aware of what we are doing and why we are doing it.

Over the last few years, we have added high quality merchandise to Phanfare: first prints, then photo books and cards and data DVDs. Recently we experimented with super low prices, fairly close to our cost, to see how it affected subscriptions to Phanfare. Those experiments confirmed my intuition that being the bargain basement provider is not consistent with our premium positioning or cost structure.

One of my goals for this year in these recessionary times is to make sure that we make money at everything we do. As a result, you are going to see some fairly dramatic prices increases on some items. For example, 4×6 prints will be going from 8 cents to 16 cents. An 8×8 book is increasing from $19.59 to $34.99.

I realize that for some of you, these price increases will come as a shock, and it will certainly reduce the overall volume of merchandise we sell. But I don’t think you will be disappointed with the quality of our merchandise, the customer service behind it, or our guarantee of your complete satisfaction.

As close Phanfare watchers know, we just lowered the price of Premium subscription from $54.95/year to $49.99/year. We did this in anticipation of introducing storage limits for new customers after approximately August 1st (existing customers grandfathered). Once the new accounts have a storage limit, the pricing will be rational. Our new Pro accounts will come with more storage and the option to buy additional storage.

We also used to offer two sets of merchandise prices, one to premium subscribers and one to free users. We used the merchandise discount as an enticement to join our premium program. We are no longer doing that. There will be one set of prices. Many of the people who buy merchandise are the friends and loved ones of the account holder and we don’t want to discriminate against them.

Free accounts (freemium) are not a big part of our future. We are right now offering all free users the ability to buy their first year of Premium at half off if they buy before August 1. Freemium users who buy Premium before August 1st also get an unlimited storage account, also going the way of the dodo bird on August 1.

Note that if if you sign up on our home page today, the offer is a 14 day unrestricted trial account, not a freemium account.

I hope you will still buy and enjoy our merchandise. It is expensive to produce integrated merchandise. Aside from the engineering involved, there are configurators, customer support and the management attention to finding high quality vendors. By buying our merchandise, you are supporting Phanfare and we appreciate it.

As always, we don’t hold your images hostage at Phanfare. You can download full size originals, even zip files of entire albums, and print at home or print through a third party. We sell photo merchandise as a convenience to our customers and for some incremental revenue, but it is not our main purpose. The main business of Phanfare is providing a subscription-based, archival, photo and video sharing service.

  • Mark

    Wow. Thanks at least for letting us know. I'd really, really, really like to get an ICC profile from your printer to do better color management.

  • http://blog.phanfare.com erlichson

    I am not sure our print partner supports a managed workflow but we will eventually add labs that do. are you talking for prints or books? Books are digital and a different provider than our silver halide.

  • Mark

    Since prices are going up, I'm not going to spend more $$ to print some large prints (posters) that aren't color managed.

    Darn it, my family and I loved being able to send phanfare photos to other photo sites to print and pick up locally. I should have stayed with smugmug since their printing partners are much better quality.

  • http://blog.phanfare.com erlichson

    We tested our printing partner against theirs and found that we got more pleasing prints from our partner. That said, SmugMug may allow you to turn off color correction entirely, and we don't. And we were not comparing them using their special adjustment recipe, but instead comparing the partners's recipes available to third party.

    Our printing partner consistently did better on red eye correction, black and white photos from color RGB files (if you desaturate) and skin tone. But our partner does do correction including sharpening by default and you can't turn it off.

    Our partner is not a pro lab. If you want a pro lab, then you will need to download your images and print somewhere else (or convince the pro lab to write to our API, which is fine by us).

    We spent a long time evaluating the prints from various labs and chose our partner carefully based on the quality of the prints themselves and the consistency of the process.

    We tested with a variety of point and shoot photos and photos from digital SLR cameras.

    At some point in the future, we may add a true pro lab for our pro version, but probably not in the next 12 months.

  • chris

    hi,
    when do you expect these changes to take place? also around AUG 1st as some of the other changes? i have some family considering buying a family reunion album that i put together on phanfare, and i'm sure the cost change would be a factor for when and if they decide to purchase. also, as far as i can tell, i and other people are only able to buy a copy of my photo book from my profile specifically….i.e. there is no way to share a photo book across accounts. is this true?. thanks for always keeping us in the loop with changes and stuff. change is always hard…

  • http://blog.phanfare.com erlichson

    Phanfare merchandise prices already changed on our site. That rolled out earlier today. The release that includes Phanfare Pro, which is slated for August 1st (but that date is not set in stone) will include Phanfare Pro. New accounts created after that account, both Premium and Pro will include storage limits and there will be a way to buy additional storage.

    All current Phanfare customers are grandfathered out of storage limits at this time. We may revisit this for the heaviest users but we hope not to.

    Yes, you can't save a book and be able to purchase it across accounts.

    I agree, change is hard. We are trying to communicate what we are doing and what we plan to do to make it easier for our customers.

  • chris

    ouch! my book went from $43.27 up to $72.87. i enjoyed the ease and quality of making the books on phanfare, but to be honest, the cost may be a little prohibitive for me. i'll still consider it though, because i do like to support phanfare (best way to try and keep phanfare around for my kids and (far in the future) their kids). (could i just order a few more at the OLD PRICE???……..i know….i know). thanks again.

  • Wayne Schepers

    Andrew Erlichson,

    As a business owner I understand your issue of profitability.

    I purchased 4 accounts for my family so we could all share photos via the iphone from Fairbanks Alaska to Charelston SC. It works Ok and viewing each others photos has be nice.

    The premium accounts we purchased were well worth the cost for the value we get.

    My concern is in the 4 X 6 Prints. Double the price is going to be an issue for us. I wish there was an easy way to take them from Phanfare to Snapfish and use there print abilities, without downloading from phanfare then reuploading to snapfish.

    The value was great to be able to do this from the iphone, order prints etc..

    I would rather have seen you increase the price much less on your 4 x 6 prints and take the price increase across other areas of merchandise. It is a real disinsentive to purchase prints when the price for the most used size is double that of snapfish.

    I really like your sharing service, I would rather pay 10.00 more a year for a subscribtion than pay double the price for a 4 x 6 prints

  • http://blog.phanfare.com erlichson

    We thought long and hard about the prices and in the end, we just set them so they uniformly gave us good margin to ensure our long term success. So much rides on having decent margins in this business and many players runs unhealthy businesses that are unsustainable.

    I don't know what Snapfish pays for the prints, but I suspect that they are using the print as a loss leader, something that we can't afford to do.

    Sorry that this change snuck up on you. The prices should be stable for a long time now.

  • Pat

    What I want to know, what is the difference between pro and premium?
    Also, I see that the pro users will be able to do a “custom” style. I wish there was a way to change all the aspects of the “style” not just the colors. Being able to make “special event” (like some you have) would be nice. It would be great to be able to add art to the background.

  • http://blog.phanfare.com erlichson

    Pro should be released the first week of august. major features will be custom colors, custom header, custom footer, custom backgrounds, no phanfare branding, 20 minute videos and cname support. there will be an upgrade path fro premium to pro for those interested. we have not announced pricing and won't until the release. both pro and premium will have a storage limit.but you will be able to buy additional storage with pro. note that if you buy a premium account now, it will have unlimited storage. you can then upgrade to pro later.

    we have no plans, at this time, to impose storage limits on customers who have unlimited storage.

  • Pat

    Thanks for the quick response! I am already a preimum member with unlimited storage (have been for awhile!) and if I upgrade to pro will I lose my unlimited storage? And for those that might want to know, what will the storage limits be?
    Thanks!

  • http://blog.phanfare.com erlichson

    we haven't announced the storage limits or the price point of pro. premium will remain $49.99. Premium users who upgrade to pro will retain unlimited storage.

    We expect that when we offer RAW support for Pro customers, which is scheduled for September, that we will require Pro users to have limited storage accounts to get the RAW feature.

    Really, it should not be called a limited storage account. It should be called a “rational storage pricing” account. Right now, big storage customers are heavily subsidized by small storage customers.

  • alaskapower

    It is very nice post.
    staffing power

  • bushworlda

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