INK CARTRIDGES:AMMUNITION IN A NEW BATTLE
INK CARTRIDGES:AMMUNITION IN A NEW BATTLE
2006-03-29 at 12:02:00 pm #15237
Ink cartridges: Ammunition in new battle
Refill ‘er up
Retailers ready for fierce fight to supply your printer ink
A new battle is brewing in the technology trenches over a very old product: ink.
What was once seen as a grimy task reserved for frugal technology geeks, environmentalists and hobbyists is now about to be legitimized in a huge way, as at least two big retailers roll out inkjet refilling stations at stores nationwide.
Consumers, who now change printing cartridges more often than lightbulbs, would be able to save up to 50 percent off the cost of new cartridges that are used to print everything from digital photos to term papers and range in price from $20 to $200.
On Friday Itasca-based OfficeMax Inc. is kicking off a marketing campaign for its inkjet refill services across its 900-store chain. They already are available at Chicago-area stores.
Next week, Deerfield-based Walgreen Co. begins a rollout of refill stations at 1,500 of its more than 5,100 stores. One already is operating at the Walgreens at 1601 N. Wells St., and by May the service will be available at 100 Chicago-area stores.
The big chains are joining upstarts like Cartridge World, which has spread rapidly throughout the Chicago area.
“We want to be the Starbucks of this industry,” said Chris Gallagher, who with his brother, Todd, owns two Cartridge World franchises and plans to open as many as eight within the next three years.
The refill services offer businesses and home users a no-mess opportunity: sharply lower prices for a 10-minute wait.
“I’m of the opinion it’s just ink,” said Sean Lowry, a senior vice president for Pacor Mortgage in Chicago, whose company is hooked on the service. “An average cartridge for a good printer or copier is $100. If you’re using six or seven machines at the office, that’s a lot of money.”The printing business is booming. Thanks to the growth of digital photography, desktop publishing and affordable color printers, the digital-imaging-supplies business will top $100 billion in 2006, according to a report released Monday by Lyra Research in Newton, Mass. By comparison, the hardware market–think printers–will account for $60 billion this year, the research found.
Inkjet cartridges range from basic black for printing simple documents to more complex models needed for presentations and photos. Prices exceed $200 for some color models.”It can cost about as much as a new printer to buy a set of new cartridges,” said Walgreens spokesman Tiffani Bruce.Burt Yarkin, chief executive at Cartridge World’s U.S. business, said that’s because printermakers follow an age-old business philosophy. “They will give you the razors and charge you for the razor blades,” he said.
The biggest challenge for his chain, which has about 20 stores across Chicago and 370 in the U.S., is to educate people that most cartridges can be refilled.”Walgreens getting into this business legitimizes what we do,” Yarkin said. “It’s a good thing for us.”
This emerging market also will put additional pressure on companies like Hewlett-Packard Co., where about 70 percent of profit in the printer business come from supplies.
HP has “seen their supplies business get slowly eaten away,” said Peter Grant, a research vice president for Gartner Inc. “About 15 to 20 percent of their business is going to these third parties.”
But Pradeep Jotwani, HP’s senior vice president of imaging and printing supplies, dismisses those concerns.
“We’ve been in this business for 22 years,” Jotwani said. “We’ve had competition all along. It’s taken various forms at different times. This is just another wave.”
Today’s printers, he said, are used to produce professional resumes, wonderful photos and slick marketing materials.
“It is because we’ve been able to harness complex technology,” Jotwani said. “We designed it that way and we make it reliable to work with our cartridges.”
For OfficeMax, the move to add refill stations “is not about saying we don’t want to sell HP or Lexmark products,” said Ryan Vero, executive vice president and chief merchandise officer. “There’s a customer base out there that wants this service. It’s not like we are trying to move them away from a branded cartridge, but we are giving them a choice.”
OfficeMax can refill about 90 different inkjet cartridges. Prices start at $12.99 to refill a black ink cartridge and $22.99 for a color model, as much as a 40 percent savings over the price of a new cartridge, Vero said.
At Walgreens, customers can drop off an empty cartridge at the photo counter, and a technician will refill it in about 10 minutes, Bruce said. Prices vary depending on the model, but customers should save about 50 percent over buying a new cartridge, she said.
The Cartridge World at 2634 N. Clark St. also remanufactures laser toner cartridges, a service OfficeMax and Walgreens do not provide. “You can save about 30 percent on those,” said franchisee Gallagher.
Customers range from home users and small businesses to major companies, he said.
“Best Buy is a customer,” Gallagher said with a laugh, pointing down the street toward the big-box retailer that sells new printer cartridges. “They even refer people to us.”
If there is a point of contention in this growing business, it is the subject of quality.
“We think you can save money, but you take a cut in the quality you are getting,” Gartner’s Grant said. “Many of our clients say they are going back to the [original equipment manufacturer] to get the full value of the supplies to go with their printers.”
HP’s Jotwani is not surprised.
“This is not a commodity, it is high-quality ink,” he said. “Our cartridges and our inks work every time and give you great output quality each time. Generic inks can’t do that.”
All three retailers offer customers money-back guarantees on refilled printer cartridges.
“If you print a picture of your grandchild, and it’s not as good as it was before you had the ink replaced,” said Todd Gallagher, “you won’t come back.”
Filling up on lower prices
Retail outlets for refilling inkjet cartridges, such as Cartridge World, OfficeMax and Walgreens, have been growing as consumers find they can save up to half the cost of new ones.
PRINTER INK CARTRIDGE COMPANY CARTRIDGE SAVINGS
PRICE WORLD PRICE
Stylus C86 Standard capacity black $23.74 $10.99 53.7%
Stylus CX5200 Cyan $12.34 $6.99 43.4%
Stylus C84N Magenta $12.34 $6.99 43.4%|
Stylus CX7800 Yellow $12.34 $6.99 43.4%
Deskjet 600 HP 29 black $29.99 $16.99 43.3%
Deskjet 1100c HP 41 tri-color $31.99 $17.99 43.8%
Deskjet 3320 HP 27 black $17.99 $10.99 38.9%
Deskjet 400 HP 25 tri-color $29.99 $16.99 43.3%