The Secrets of Shutterfly’s Card Pricing

Craig
Craig
Nov 29, 2018 · 3 min read

Certain order quantities mean you pay more while getting less

First, let me say I’m generally a fan of Shutterfly, the site where you can order pretty much anything with your photos printed on them, including holiday cards. Each year, my family makes a custom holiday card, orders a bunch, and then sends them off to distant friends and family. We’ve been loyal customers of theirs for many years.

This year, as I was getting ready to place our order, I noticed some interesting quirks in their card pricing. As with most sites, the more you order, the cheaper each unit is. Here’s an example of Shutterfly’s pricing pull-down menu for their basic folded greeting cards.

Notice on the right where 10 cards cost $1.94 apiece, but 50 cards cost just $1.72 apiece. That tiered pricing made me wonder if there were some order quantities that were more or less advantageous than others. So, I did what any academic researcher does: I gathered data and made a plot.

Here is what the total order cost looks like as you go from ordering just a single card (1) on the left to ordering a whopping 280 cards on the right.

You’ll notice that the line isn’t smooth. If ordering more always cost less per unit than ordering fewer, then you’d see a nice line curving over to the right (a “concave” relationship, in analytics nerd lingo). But those jig-jaggy shapes suggest there’s some wonkiness to their pricing tiers.

For example, if you order 99 cards, your order cost is $163.35 (that’s 99 x $1.65 each). But, if you order one MORE card, you get a price break and end up paying just $158 (100 x $1.58 each). Clearly, it would be foolish to order 99 cards if ordering 100 means you pay less AND you get an additional card.

If all these differences were just a few dollars like that example, I wouldn’t be writing this post. But some of the savings opportunities are pretty staggering. One of the more egregious examples is the fact that you’d pay $238.50 for 159 cards, but just $205 for 205 cards. Yes, by ordering 46 more cards, you pay $33.50 less.

Here’s a plot of the optimal ordering quantities, with any quantity that costs you more per card than a higher quantity removed.

If you want a quantity along one of the blue regions, ordering that quantity will be the cheapest way to get that number of cards. But if you want a quantity of cards in one of the red regions, order the first blue value to the right of the region to save money. For example, if you want 48 cards, order 50. If you want 140 cards, order 205.

Now the big question is why has Shutterfly embedded these regions (the triangular mountains) in its pricing that force customers to pay more money for fewer cards. Is it carefully designed to fleece the unwitting, or is it just a pricing policy without a lot of thought behind it? I’m not going to guess which because I don’t know for sure and I tend to abide by Hanlon’s Razor whenever possible. That said, you don’t need to pay more than necessary if you follow the ordering quantity chart above.

If you want to play around with the pricing data, you can download the Excel spreadsheet here.

If you’re shopping for cards at another site, check out their pricing policy and see if there are similar opportunities for optimizing your order. After all, why waste money?

Craig

Written by

Craig

Business professor, healthcare operations researcher, PhD, tech junkie, game designer, husband, dad of 2. Opinions are mine alone.