*NEWS*OFF-MARKET INK SAVES BIG
*NEWS*OFF-MARKET INK SAVES BIG
2005-08-17 at 10:52:00 am #12389
Off-market ink saves big
Printers may be cheap,
but the ink cartridges inside them aren’t — or at least they weren’t
until some entrepreneurs saw a niche to fill.
Now, stores that sell re-manufactured ink cartridges and toners are
spreading. Their allure: cartridges that cost 20 percent to 50 percent
less than the price of new ones.
As of 2004, companies selling these nonbrand cartridges and toners had
captured 31 percent of the $26.6 billion worldwide ink cartridge
market, according to Lyra Research, which provides information and
analysis for the imaging industry.
In North Carolina, 16 Cartridge World franchises — which refill and
refurbish cartridges — have opened since April 2004. There are four in
the Triangle: in Cary next to Sam’s Club, in Raleigh on Pleasant Valley
Road off Glenwood Avenue and on Hillsborough Street across from N.C.
State University, and on N.C. 54 in Durham. Five more are expected by
year’s end, including one in Chapel Hill and one near The Streets at
Customers can either have their empty cartridges refilled while they
wait or trade in empty containers and get a credit for the purchase of
a remanufactured one.
“Cartridges are pretty pricey, which has caused people to look for
alternatives,” said Jim Forrest, managing editor of the Hard Copy
Supply Journal, which deals with computer ink, toner and paper supplies.
Such was the case for Karen Thompson, an executive administrative
assistant at Capitol Infrastructure, a Cary fiber optic company.
Thompson was paying $880 a month to buy four cartridges for an office laser printer.
Then she decided to try remanufactured cartridges.
“They cost $110 each. I was just blown away with the savings.” After
switching, Thompson said she waited to hear complaints about the
quality of the print, but none came.
“I had my ear out for that, because they [co-workers] would tell me if
they noticed a difference in the quality.” She said her company’s
brochures and other color packages are printing crisp and clear.
Thompson said she got an even bigger shock when she started buying toner for three smaller printers in the office.
She had paid $274 for one type of toner from an original manufacturer
supply store. The refurbished toner is only $19, she said.”Now you tell
me that’s not a savings,” Thompson said.
Analysts expect that these alternative ink-cartridge suppliers will eat
away the market of the big printer companies and increase to a 39.9
percent share by 2009.
The list of the various stores offering remanufactured cartridges is
already growing. Besides Cartridge World, which has about 300 stores in
the United States, there’s Caboodle Cartridge, which has a store in
Charlotte; Island Ink Jet, with ink refilling kiosks at shopping malls;
Rapid Refill and Ink Tech Zone. Even Staples, the large office supply
chain, sells self-refill kits in its stores.
But these companies don’t get a free ride into the market.
The printer giants such as Hewlett Packard, Lexmark International,
Canon and Epson, argue that off-brand cartridges are inferior to the
original manufactured ones.
“Their recourse against … [these new stores] are their patents,” said
Forrest. “They are very quick to file lawsuits against companies that
infringe on those patents.”
Some companies, such as Canon and Epson have fewer patents, which makes
it easier for companies to duplicate the ink cartridge, said Forrest.
Hewlett Packard and Lexmark continue to invent new technologies
associated with their ink formulas, making it more difficult to
reproduce cartridges for their newer models.
Still, the upstart businesses have managed to build strong business
around these patents buy duplicating ink formulas for older models and
manufacturing cartridges for newer machines.
For example, 29 percent of Hewlett Package ink supplies are being sold
by nonbrand or aftermarket businesses, according to Lyra Research. For
Lexmark, the amount is 26 percent.
To replicate the ink, the remanufacturers invest in their own technology and work with suppliers to get necessary equipment.
Take Cartridge World on Hillsborough Street. It has 130 different ink
colors, including several shades of black. When a customer brings in an
empty cartridge, the employees look up the brand number on a chart that
lists the colors and amounts used to make that particular ink — much
like those who mix paint at hardware stores. The cartridge is cleaned
with a special ink removal solution, then placed in an airtight vacuum
where the ink is dispensed. Customers who don’t want to wait can
purchase a refilled cartridge.
For most customers, there is little sacrifice of quality when they buy
off-brand cartridges, Forrest said, particularly companies that print a
lot of documents for weekly meetings or other short-term use.
“Probably 85 to 90 percent of what is printed is a temporary document.
We use it for a couple of days and it ends up in the wastebasket.”
But for companies that have to archive documents for long periods, it may be best to not use alternative supplies, he said.
“If I print photos of my grandson that I want to last, generally I make sure I have an original” cartridge, Forrest said.