Shutterfly IPO?
Rumor has it that Shutterfly may be headed for an liquidation liquidity event soon, either an IPO or an acquisition valued at ~$500MM. Shutterfly has been profitable for 3 years, with profit estimates of around $20MM.
Shutterfly’s model is a fascinating one. Unlike 99% of their competitors, Shutterfly has its own manufacturing facility, where it houses inventory as well as several HP Indigo printers, and other machinery to make their own photo books. Shutterfly’s manufacturing facility is in Hayward, California. Their competitors outsource that process.
In many ways, Shutterfly has followed the Amazon model of owning every piece of the process, from Click-to-Ship in order to have total control of the customer experience. This approach is also a very costly one, bearing a significant amount in capital expenditure. But, this approach worked well for Amazon and it’s working well for Shutterfly. In the end, having real-world assets, profitability, and owning the entire customer experience will be what makes Shutterfly the winner in the online photo space as it did for the online commerce space did for Amazon.com.
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