*NEWS*INK CARTRIDGES IN A NEW BATTLE

[Anonymous]

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%

[Author]

March 29, 2006 at 12:04 PM