*NEWS*REFILLING INK/TONER,A BOOMING IND.
*NEWS*REFILLING INK/TONER,A BOOMING IND.
2006-04-18 at 10:21:00 am #15216
Retailers’ refills cut ink cost
Walgreens and OfficeMax offer printer cartridge refills — for much cheaper than the cost of a new cartridge.
CHICAGO – A new battle is brewing in the technology trenches over a very old product: ink.
Major retailers are cutting the cost in half for refilled inkjet printer cartridges, taking a once grimy task for hobbyists — who refuse to pay $20 to more than $200 for a new cartridge — and making it available to the masses.Last Friday, OfficeMax Inc. kicked off a marketing campaign for its inkjet refill services across its 900-store chain.This week, Walgreen Co. begins a rollout of refill stations at 1,500 of its more than 5,100 stores.
The refill services offer businesses and home users a no-mess opportunity: sharply lower prices for a 10-minute wait.”An average cartridge for a good printer or copier is $100,” said Sean Lowry, a senior vice president for Pacor Mortgage in Chicago, whose company is hooked on the service. “If you’re using six or seven machines at the office, that’s a lot of money.”
A booming industry
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 last week 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 spokesperson Tiffani Bruce.Burt Yarkin, chief executive at Cartridge World’s U.S. business, said that’s because printer makers 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 opened about 370 stores in the U.S. –including two in Wichita — is to teach people that cartridges can be refilled.
“Walgreens’ getting into this business legitimizes what we do,” Yarkin said. “It’s a good thing for us.”
The emerging refill market will put additional pressure on companies such as 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 had competition all along,” Jotwani said. “It’s taken various forms at different times. This is just another wave.”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.”
OfficeMax technicians 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. That can lead to 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.
A question of quality
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.That does not surprise HP’s Jotwani.”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 if they are not happy with the results from a refilled printer cartridge.