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EVER WONDER WHY INK COSTS SO MUCH?
refilling printer cartridges are nipping at the big boys
Franchise, franchise, franchise…
Printer makers have long known that ink is as good as gold. Just ask the folks at market leader Hewlett-Packard Co. Analysts say ink and toner supplies made up more than 50% of fiscal 2004 profits for the computer giant, although they brought in less than a quarter of the company’s $80 billion in sales.
But now a new breed of fast-growing upstarts is out to crash the profit party. Across America, retail stores are cropping up in strip malls among the Gaps and Wal-Marts where consumers and small-business owners can go to have empty printer and toner cartridges refilled — usually for half of what it costs to buy a new one. The largest of these outfits, Cartridge World, based in Australia, just passed 1,000 stores worldwide, and its North America affiliate has opened 275 stores in the U.S. since mid-2003. The company is signing up a new U.S. franchisee daily and plans to top 3,000 stores in the country by early next decade.
What’s driving this latest franchising craze? Prices that draw nearly as much ire from consumers as does a trip to the gas station. Burt Yarkin, chief executive of Emeryville (Calif.)-based Cartridge World North America, likes to point out that the ink inside a new cartridge from HP, Lexmark, or Canon costs more per ounce than Chanel No. 5 or Dom Perignon champagne. “People know they’re getting ripped off,” says Yarkin. “We’re giving consumers and businesses a choice.”
……There have been ways to reduce printing costs for years for shoppers willing to deal with messy do-it-yourself refill kits or buy from online outfits with iffy-quality products. But the new retail chains will make reuse an option for millions of mainstream PC owners. Customers can either wait for a few minutes for their cartridge to be refilled, or pick up a “pre-filled” one in stock. Rapid Refill Ink International Corp., based in Springfield, Ore., even sets up drop boxes at coffee shops and dry cleaners. Most refill franchisees also have their own vans to do pickups and deliveries to local businesses, usually at no extra charge……
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