NEW WAY TO THINK OF INK

[Anonymous]

New way to think of ink
Retailers begin to offer a cheaper way to refill your printer
Even
as computer prices have steadily dropped, the cost of one high-tech
necessity has remained stubbornly high. Printer cartridges are so
costly that printer giant Hewlett-Packard Co. has long made more than
two-thirds of its profit from selling them.
Now,
in a move that could save consumers hundreds of dollars in replacement
costs, several major retailers are starting to offer speedy refill
services that replace the ink rather than the entire cartridge.
Drugstore
chain Walgreen Co. plans to roll out an ink refill service – at less
than half the cost of buying new cartridges – in 1,500 of its stores.
Tiffani
Bruce, a spokesman for Deerfield, Ill.-based Walgreen, said it was not
yet certain when the company’s 46 Kansas City area stores would begin
offering the service. She said that information would not be released
until all store schedules for the rollout were reviewed.
With
an eye toward launching a national service, office supply chain
OfficeMax Inc. is pilot-testing an ink refill service in 40 stores in
the Chicago area. And Office Depot Inc. is also testing an ink refill
service in 15 stores in Minnesota and North Carolina. In addition,
smaller ink refill services are planning to open more storefronts in
malls and hotels.
The
new services allow consumers to get their cartridges refilled quickly
while they shop, rather than having to fill the cartridges themselves
as the do-it-yourself kits on the market require.
Matt
Davidson, a pharmaceutical salesman in Norwalk, Iowa, said he has been
going to a Walgreens store that has pilot-tested ink refills for the
past six months. The drugstore, which is a mile from Davidson’s home,
refilled his black-ink HP cartridge within minutes at “half the price
it would normally cost me for a new cartridge,” he said. “It was easy.”
Davidson said he has returned for four other ink refills and has
stopped buying new HP cartridges.
The
cost of ink has long been a source of frustration for computer users.
The price of ink per milliliter from big printer manufacturers has been
rising at about 1 percent a year, according to market watcher Lyra
Research. Many of the big printer makers are also getting stingier with
the amount of ink in a cartridge. For example, while a popular older HP
black-ink cartridge, the 45A, cost $29.99 and had 42 milliliters of
ink, its newer counterpart, the HP 96, costs the same but has only 21
milliliters of ink.
The
new services strike a blow at a major profit center for companies such
as Lexmark International Inc. and HP, which rely heavily on ink for
recurring revenue and profits. Indeed, HP actually loses money on its
printers – money that it recoups through new ink and toner sales. HP
won’t say what its margin on cartridges is, but analysts estimate the
margin to be at least 60 percent on both ink and toner cartridges.
Each
year, about 1.3 billion ink cartridges are sold worldwide, according to
Lyra. Such sales generated $30.1 billion in revenue in 2005.
But
the market share of refilled and re-engineered ink cartridges is now
projected to hit nearly 29 percent in North America by 2009, up from 23
percent in 2005, according to Lyra.
Tuan
Tran, an HP vice president of ink and toner supplies, said the Palo
Alto, Calif., technology giant is “closely monitoring” the new retail
refill services. Tran said consumers should be wary of refills, however.
Since
HP designs its printers and its ink cartridges to work together as one
seamless system, a refilled cartridge may not be as reliable and can
cause streaking on printouts, he said. With a refilled cartridge,
“there’s a big sacrifice in terms of quality,” Tran said.
Consumer
Reports magazine, for one, has said that consumers should “be wary of
off-brands” and has “found brand-name cartridges to have better print
quality overall.” A 2003 study by research firm QualityLogic Inc. found
that 54 percent of the remanufactured cartridges it tested had
problems, compared with just 1 percent of HP color-ink cartridges and 6
percent of HP black-ink cartridges.
Walgreen is offering a 100 percent satisfaction guarantee for its ink refill service.
At
its stores, consumers can drop off their empty cartridge while they
shop and get a refill within 15 minutes, said John Sugrue, Walgreen
general manager of photofinishing. The stores will charge $12.99 to
$14.99 for a black-ink refill, around 60 percent less than the price of
some black-ink cartridges from HP, Canon Inc. and others.
OfficeMax
is charging a flat $14.99 for a black-ink refill, and $21.99 for a
color-ink refill. An Office Depot spokesman declined to be specific
about what it charges, but one of its stores in Minneapolis said
pricing for an ink refill ranges from $9 to $18.
The
savings could add up. If a consumer who uses the HP 96 black-ink
cartridge buys five new cartridges over the course of the year, he will
spend $149.95, excluding tax. But a consumer who refills his HP 96
black-ink cartridge five times at an OfficeMax, which is charging a
flat $14.99 for a black-ink refill, will only spend $74.95, excluding
tax, in the same period. The savings over five years will approach
$400, more than enough to pay for a new color inkjet printer at current
prices.
Over
the past few years, other cheap options have emerged. These include
used cartridges that have been refurbished to work as if they are new
by companies such as Lenexa-based Laser Cycle Inc., specialty franchise
stores such as Cartridge World and Island Ink-Jet that refill used
cartridges on the spot, and do-it-yourself refill kits.
Some
smaller firms are also planning to put refill services in mainstream
retail locations. Save On Inks, a Boston-based ink cartridge provider,
said it will put ink refill machines in hotels and strip malls around
Boston and in Florida later this year. And makers of ink refill
equipment, such as TonerHead Inc., SME Inc. and InkTec Zone America
Corp., say other deals with retailers are in the works.
Other
retailers haven’t yet committed to wider rollouts. An OfficeMax
spokesman said the retailer is “very optimistic” about launching a
national ink refill service, but declined to be more specific. An
Office Depot spokesman declined to comment on whether it will convert
its ink refill pilot into a national service.

No red ink here
■ Each year, about 1.3 billion ink cartridges are sold worldwide.
■ Sales generated revenue of $30.1 billion in 2005.
A sample of prices
■ Walgreens: $12.99 to $14.99 for a black-ink refill
■ Office Max: $14.99 for a black-ink refill
■ Office Depot: $9 to $18

[Author]

March 14, 2006 at 10:27 AM