REFILLED INK CTGS………BIG MONEYMAKER

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REFILLED INK CTGS………BIG MONEYMAKER

 user 2006-02-27 at 10:38:00 am Views: 53
  • #14635

    Refilled Printer Ink Cartridges Become a Big Moneymaker
    Feb.
    19–SACRAMENTO — At CompUSA recently, you could buy a single Lexmark
    ink cartridge for $32.99, only $5 less than the price of an entire new
    printer.

    That
    example starkly illustrates that while the price of most computer
    hardware has plunged over the years, the cost of ink supplies has
    barely budged.
    That’s been a boon to companies like Hewlett-Packard
    Co., whose printing and imaging business accounted for 51 percent of
    HP’s operating profits in the most recent quarter. But it’s been a
    financial pain for most consumers and has spawned an alternative
    industry: cartridge refills.
    Franchise retailers like Cartridge
    World and Caboodle Cartridge are growing quickly, here and nationally,
    where consumers can bring in their old cartridges for refilling. And
    corporate giants such as Walgreen Co. and OfficeMax are getting into
    the game, too. In most cases, they’re all offering refilled or
    so-called “remanufactured” cartridges for about 40 percent to 50
    percent less than new ones.
    “People don’t want to pay $35 to $40 for
    a new cartridge anymore and they are willing to try an alternative,”
    said Charlie Brewer, managing editor of Hard Copy Supplies Journal,
    which tracks the print supplies industry.
    That’s the case with
    Jennifer Stanley of Sacramento, who purchased several remanufactured
    cartridges from Caboodle Cartridge on Folsom Boulevard last week.
    “Price
    is definitely a factor,” she said. “I could order my cartridges
    directly from Dell but that would be much more expensive.”
    One thing
    that hasn’t changed is demand for ink cartridges. Despite the
    predictions of a paperless society, home and office printers are
    working harder than ever.
    The popularity of digital cameras means
    more people are printing ink-hungry color photos, and Web users can’t
    seem to resist printing out maps, receipts from online purchases,
    e-mail attachments and even recipes, said Tuan Tran, Hewlett-Packard’s
    vice president for printing and imaging supplies.
    Indeed, according
    to Lyra Research, based in Newton, Mass., worldwide ink cartridge sales
    are growing at a compound rate of 6 percent a year, and will hit
    $37.6billion by 2009.
    Refill technology is nothing new, but early versions had some flaws.
    “People
    were very leery of the quality,” Brewer said. “There have been stories
    about the cartridges leaking or the nozzles getting plugged up.
    But
    improvements in technology and demand for cheaper products have turned
    refills into a $909 million business in 2005, one that’s expected to
    reach $1.78billion by 2009, according to Lyra.
    There’s still debate
    over whether refilled and remanufactured cartridges are as reliable as
    new ones. An HP-sponsored study in 2003 by Southern California-based
    QualityLogic Inc. found that 54 percent of refilled color inkjet
    cartridges had problems, compared with 1 percent of new HP cartridges.
    Walgreen’s
    debut in the market could give the industry a major boost. The
    Chicago-area company is installing refill machines in the photo
    departments of 1,500 of its 5,100 drugstores in March, said company
    spokeswoman Tiffany Bruce.