Pephoto Blog

Finally, we have begun the final testing phases for the ROES (Remote Order Entry System) for professional photographers. The development has taken several months but we are excited to get desktop solution for our pro-clientale that allows faster uploading than the web-based solutions.

The client is the application that your customers will use to create their orders and send them directly to our lab. The client runs on Windows PC or Mac. The ROES system offers our lab the ability to capture pro-sumer and consumer business via a set of simplified ROES Client interfaces - an application version, a browser-based version and a kiosk version for your storefront or use at a remote location.

Our testing link is at http://www.softworksroes.com/ROES/labs/BestColorTest/. Feel free to test out the software (you can checkout using the third payment method of Lab Account for the testing process) and email us at contacts@pephoto.com for any comments. We hope to finish testing soon and launch before the end of July for the ROES solution.

Click here to view the presentation

Attached are some notes pointing out the new dynamics to the professional pictures end-consumer market. The powerpoint presentation was presented at Kodak’s DP2 workshop two weeks ago in Rochester and it points out the where the consumer market is going right now and what the needs will be for high-quality professional digital prints.

The market for professional prints is expanding to the “special experience” moments. Some examples include personal limits or experiences in feeling,  unusual experiences, hands-on or action moments, and focus on connected activities. Read the presentation to understand more.

We are all getting things ready for the big July 4th rush. The summer is the photo industries busiest season and this year the pattern has been more towards scrapbooks, photobooks, and enlargement posters.

Apparently, here is the scoop with Rocketlife. Their current offering is going to be online based and they were so kind to furnish me with a list of there clients, which include: www.hitephoto.com, www.fromex.com, www.snapphoto.com, www.pictureslide.com, and www.pephoto.ca.

When I saw the list, I was completely floored at the last example. Someone apparently grew slick enough to grab the www.pephoto.ca website name. But when I check the website, I find out it belongs to Photo Express  in Vancouver, Canada. So innocently enough, we’re just both companies with similar names and websites.

Back to Rocketlife, I tested their online software and realized that it has NO FLOW. The software looks good but the ease-of-use and ordering system has absolutely no flow. To move back and forth between the pages is a hassle and apparently. The software is cumbersome and just not what was presented at PMA 2008.

After our debrief this week, here is where the schedule is going. Best Color Photo will be PEPhoto professional partner and we will be making the announcement next week, followed by the proper marketing and media exposure.

PEPhotobooks is our new Photobooks creative solution and the website is 95% done with some final tweaking to the web content and shopping cart. PEPhotobooks will utilize the Digi-Labs technology for photobook editing.

While BestColorPhoto.com will launch next week, it will have two software options for customers: Lifepics and the desktop photo software ROES. ROES is the preferred photo ordering software for all Professional Photographers due to its ease of use in professional editing as well as ability to handle bulk orders. ROES has a launch date of July 20th.

In our meeting with IT, we discussed the need to have everything out for July 25th. This will allow two weeks for any maintenance and support before we begin our internal automation project. We have a massive project to automate our internal printing processes because of the various software solutions we have operating from all our different photo print providers (Lifepics, ROES, Lucidiom, etc).

Wishing everyone a Happy July 4th.

We just concluded a meeting with our IT team and conference call with Rocketlife today. We signed our agreement with Visan over three months ago and the Rocketlife solution has still not be delivered or developed yet. What I am about to write is a very frank assessment behind the hype over Visan’s supposedly DIMA Award-Winning Software. In my opinion, Rocketlife is a big disappointment.

Here is a summary of problems with the Rocketlife Photo Technology Solution (and believe me, some of these problems are big):

1. No ability to select Glossy or Matte

2. Unable to add any photo sizes, we can only select the sizes Rocketlife provides and we have to provide at least 85% of the products that Rocketlife provides. Otherwise, Visan will outsource the product to a third party.

3. No way for resellers to add promotions or special offers by themself

4. No order confirmation page for the current set-up.

5. No ability to offer order pick-up or zip-code locator.

6. Crop Function does not work.

7. No Desktop Version, even though the product was branded as a desktop-version at the 2008 PMA.

I was talking to an industry colleague at Whitech, and this senior executive described the Rocketlife Solution perfectly by saying, “It might look good, but it has absolutely no flow.”

I am still hoping to get our Rocketlife solution complete and thankfully our other two solutions are coming along fine. I asked my contact at Visan one simple question about the Rocketlife Solution, “Does any reseller or web company use your software?” To my knowledge, no one is using Rocketlife’s technology. And I’m thinking to myself, “If no one is using Rocketlife’s technology, why are they getting this publicity for something that doesn’t work?” 

We have arrived back to the headquarters after a couple of weeks away on business in Asia. Our first priority was to discuss the updates on different projects on our plate.

PEPhoto ROES is about 80% complete at this moment. The ROES Solution will be our desktop based digital ordering solution for all large quantity professional and amateur photographers. The easy-to-use editing tools and quick uploading feature allows large quantity prints to be transferred without need of web browser access. I have given a deadline of July 15th to have ROES fully operational and ready to go.

PEPhotobooks.com- website is basically complete. This desktop solution will be geared towards a photobook creation and full customization of photobook products. The file “RIP” process has been tested and we are just awaiting the shopping cart to be finished as we decided to have the shopping cart integrated into our website instead of through the Digilabs solution itself. Estimated delivery for this site should also be July 15th.

PEPhoto Rocketlife- this solution is being tested at the moment. It’s become quietly obvious that Rocketlife has been having problems with its development project. Their solution has me concerned greatly because there has been very little progress shown from their development team on a beta version of our Rocketlife solution, even though we have requested a relatively standard online photo ordering solution. Their development team has not been very efficient and slow in getting this project complete. Their solution (unlike PEPhotobooks or ROES), has NOT been stress tested at the moment as we are still working out quirks on the front-end userface portion of their solution. If things go well, I will expect August 15th to launch this solution. Otherwise, TBD.

The primary focus for our development projects is to get the ROES Solution and PEPhotobooks Solution completed within the next four weeks. We are also restructuring the PEPhoto blog to allow further web-friendly functionality in the future. We have several press releases coming out hopefully in the next 2-3 weeks.

The above was recently released from the US Photo Market as researched by PMA. Aside from the PMA observations, we are also going to see the prices to purchase photobooks shrink dramatically as well. While the average book is about $30, the selling price will most certainly drop by half by 2009 as more competitors enter the market.

The cost to making a 8.5 x 11 photobook 20-page photobook is around 15-25% profit margin. With increased competition and lower pricing, it’ll settle into the 5-10% range within 2-3 years. The companies to benefit the most in the industry are the book cover makers, paper suppliers, and consumers. Read below for more tidbits:  

Hate to say this, but Shutterfly had seriously better start thinking of an exit or alternative plan. At least Snapfish has HP backing them up.

“Shutterfly (SFLY) calls itself an Internet-based social expression and personal publishing service. In reality, it is a simple online photo storage, swapping, and printing service.

No matter what it is, the company is not doing very well. Its shares fell over 17% today after it announced Q1 earnings. The stock fell through its 52-week low and traded down to $12.65. The stock has been as high as $37 during the period.”

Click for Article

Next week, we are going to be returning our Xeikon 5000 package and cancelling our agreement to purchase this unit. At the same time, Xeikon is also showcasing their brand new Xeikon 8000 at Drupa at the end of May. After having experienced their product line, I would not recommend these units for commercial printing. The reason for my disappointment in the Punchgraphix’s Xeikon unit is in its inflexible operation, changing market conditions, weak senior management, and questionable future.

First off, the Xeikon is not flexible when it comes to printing small quantity orders. That is because the machine is roll-fed. When you switch paper rolls, you will need to run  30 feet of paper (for color balancing and proper setup) and it will take about 30 minutes.  The Xeikon units are geared towards large volume runs of the same type of paper print order. In other words, it can drive straight, but it can’t turn. One thing we liked about Xeikon is that it RIPS and impositions orders much more quickly than the Indigo. However, our operators found using the Indigo more straight-forward and user-friendly.  

Another reason for my disappointment in the Xeikon is the commercial printing industry is changing. More and more orders are being geared towards short-run and on-demand printing. Digital presses make their market in the lower quantity, quick run jobs. But for the Xeikon, you’ll be hard to find many 5,000 piece jobs that can be batched using one paper stock. Print orders come in a huge variety of paper stocks and switching paper out of the Xeikon becomes a massive problem. For larger volume jobs above five thousand pieces, offset printing is still more economical for the end-user.

The industry is also becoming more of a commodity. Vistaprint,  Bargain Printing, 123 Prints, and other websites have shown the market emphasis on short production runs and different paper stock selections. The margin on business cards is very low. Vistaprint is able to provide free business cards because its proprietary software effectively upsells add-on features to all orders. The cost of printing is for each sheet ($0.30 - $0.50 per sheet, paper, toner, labor, depr) and 200 business cards cost about $1.80 - $3.00 to print. If Vistaprint is able to upsell next-day shipping or premium paper for $5, then its effectively made a profit. In essence, the 200 free business cards offer is similar to a $5 coupon.

This short-run and on-demand printing marketplace makes sheet fed machines like Nexpress, iGen, and Indigo much more efficient to operate. In addition, the Xeikon costs significantly more than its sheet-fed counterparts. A complete package for a machine and its finishing line may cost over $1 million to setup.

In addition, the sheet-fed machines are able to meet our growing need for high-quality photobooks. For Xeikon, the machine has to print a lot of postcards and business cards to make it a profit. If you have to switch paper, then it’s a financial disaster. Perhaps the only company to effectively use the Xeikon is Expresscopy, and that is because their business is predicated on the VDP direct mailing market.

Another reason for returning the Xeikon unit is with Punch Graphix USA’s weak senior management team. The US division has gone through a massive re-organization with new players and layoffs. In fact, it seems like Punch Graphix USA goes through a new CEO every year. Punch Graphix doesn’t have a huge installment base in the US so the number of qualified service techs and account managers is limited.

Finally, we returned the Xeikon unit because of its questionable future. The company is not well-run and lacks a clear future. Aside from its bankruptcy in 2001, the company has been restructuring so many times that we can find them reliable partners.  And from the look of things, Punch Graphix is going to have a difficult 2008. Its sales for the first part of 2008 fell and its business is heavily dependant on Europe. When Punch Graphix converts the machine from Euro to Dollar, their Xeikon unit becomes much more expensive compared to its US-based competitors (Kodak, HP, Xerox). 

Some of our industry colleagues are beginning to find out about the issues with Xeikon. DMMI recently returned two Xeikon units after their trial so I’m glad we’re not the only ones returning the machine. MJA Graphics has also had issues with the Xeikon. I would reckon it will be about 2-3 more years before we see Xeikon as being acquired by a larger player.

McKinney High School students’ heads, photos altered by Lifetouch in yearbook

I don’t excited often. But I have to admit I am excited about the new photobook  product we are going to introduce. The software itself is a really robust piece of software and it creates and renders the books smoothly. Our Digilabs solution is a desktop solution so it will allow users to work on projects offline and design without any worries of online connection errors or socket issues. We’ve tested out the software and are addressing the minor bugs in the software. I’m discussing with my team to have a June 1st release of the software and it will first go through www.pephoto.com and then we will offer a more advanced package through our fellow sister company at www.pephotobooks.com.

In addition to the online photo market, we are beginning to make a very aggressive push into the retail photo market. We have added more templates for greeting cards and photobooks. We are rolling out kiosks rapidly and our biggest challenge has been getting these kiosks in place. We have a press release with Lucidiom coming out soon and it’ll be a big announcement for our new year.