*NEWS*INK CARTRIDGES IN A NEW BATTLE

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*NEWS*INK CARTRIDGES IN A NEW BATTLE

 user 2006-03-29 at 12:04:00 pm Views: 63
  • #15020

    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.
     PRICE COMPARISONS
     PRINTER INK CARTRIDGE COMPANY CARTRIDGE SAVINGS
     PRICE WORLD PRICE
     EPSON
     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%
     HEWLETT-PACKARD
     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%