*NEWS*INKJET REFILLERS FIND NICHE IN U.S.

[Anonymous]

Companies That Refill Used Inkjet Cartridges Fill Niche
in Market

When Julianna Leighton tried to refill the inkjet
cartridges in her home printer with a do-it-yourself kit, it was a disaster.

“There was ink all over everything,” said Leighton, of Ashland, Neb. “I
gave up.”

Leighton, who makes bath salts and sells them on the Internet,
said she goes through many cartridges in printing labels and invoices.

A
supervisor for a call center when she isn’t selling bath salts online, Leighton
was resigned to buying new, brand-name cartridges — until she spotted Island
Ink-Jet during a recent visit to Westroads Mall.

For $31, Leighton was
able to have three cartridges refilled and to buy two others that already had
been refilled. She said she would have spent about $36 for three new cartridges.

“Why spend more for something brand new when you can get it so much
cheaper? This is a very good deal,” Leighton said.

Ryan Lofton, local
franchise owner for Canadian-based Island Ink-Jet, opened kiosks at Westroads,
Oak View Mall and Mall of the Bluffs in Council Bluffs about a year ago. He said
he hopes to open five more locations in the Omaha area next year.

Island
Ink-Jet is one of several companies that sell refilled or remanufactured
cartridges. Island Ink-Jet, based in Courtenay, British Columbia, has more than
155 locations in Canada, Mexico and the United States.

With names such
as Rapid Refill Ink, Cartridge World — which has one Omaha location, at 2425 S.
132nd St., and one in Lincoln at 6900 O St. — and Caboodle Cartridge, the
chains are part of a growing worldwide industry expected to generate more than
$20.9 billion in sales this year, a 10 percent increase over 2003, according to
Lyra Research of Newtonville, Mass., a research firm that provides market
product, technology information and analysis focused on the imaging industry.

In North America, $8.8 billion in sales are forecast for this year, an
increase of almost 9.5 percent, Lyra said. Third-party inkjet refills hold a 16
percent market share.

The inkjet refill industry is growing because
consumers are printing more and because of the kinds of documents they are
printing, said Jim Forrest, managing editor of Hard Copy Supplies Journal, a
monthly newsletter of the inkjet industry published by Lyra.

Multifunction printers that print, copy, fax and scan and the printing
of digital photographs and Internet pages use more ink.

Refilled and
remanufactured ink cartridges are nothing new, Forrest said. The new twist is
the retail store where customers can drop off cartridges, he said. The trend
started several years ago in the Far East and Australia and arrived in the
United States about a year ago, he said.

Forrest said the refill inkjet
industry is projected to grow by 7.8 percent annually between 2003 and 2008.
“That’s very significant growth for any product,” he said. Since opening about a
year ago, Lofton and his staff of nine workers have refilled about 40,000 ink
cartridges at the three locations. This year, sales are projected to reach
$500,000, he said.

Prices range from $4 to $19.50, Lofton said. The
service is quick, usually taking about 15 minutes to refill a pair of
cartridges.

Spokesmen for Epson America Inc., of Long Beach, Calif., and
Hewlett-Packard of Palo Alto, Calif., said the quality of refilled and
remanufactured cartridges is inferior to their companies’ brand-name cartridges.
E-mail messages to other manufacturers — Lexmark International and Canon U.S.A.
— requesting interviews were not returned.

Boris Elisman, vice
president of marketing and sales imaging and printing supplies at
Hewlett-Packard, said the company delivers “a superior value to our customers.”

The inks HP uses take three to five years to design and are not
available elsewhere, Elisman said. The perception exists that refilled
cartridges offer a better value to consumers, he said, but “most people know not
to expect the same quality and value.”

Kristine Snyder, a spokeswoman
for Epson, agreed, adding that the company cannot guarantee the quality of
results when consumers use non-Epson supplies.

Elisman and Snyder said
refilled and remanufactured cartridges produce lower-quality color, print fewer
copies and cause misfires of printer nozzles and other printer malfunctions.

Lofton disagreed, saying that Island Ink-Jet’s quality tests produce
results that are as good as Hewlett-Packard’s.

“We use specialized ink
and a strict quality control process,” he said.

Island Ink-Jet carries
120 kinds of ink because each cartridge has a specific ink, he said. If a
cartridge is too old to refill, Lofton said, a fresh one is offered.

Forrest, the managing editor of the inkjet newsletter, said the
manufacture of printer ink is indeed “rocket science.” He said companies such as
Hewlett-Packard and Lexmark spend billions on sophisticated technology to
formulate their inks.

However, Forrest said, he believes the ink sold by
Island Ink-Jet franchises is a “reasonably good one.”

Lofton said
first-time customers are skeptical about refilling an empty cartridge. But once
a clerk goes through the process, which includes a print test, and explains the
company guarantee, “we have a customer for life,” he said.

Lofton said
about half his customers are businesses.

Rahno Brown, office manager for
Brown Architecture & Design, said her company has used the service for about
a year after reading about refilled cartridges in a business journal.

The architectural firm, at 3624 Farnam St., has four printers, which use
a lot of cartridges, Brown said. The company has saved more than 75 percent in
costs, Brown said, and is pleased with Island Ink-Jet’s products and
service.

At first, though, she was skeptical.

“I wasn’t sure that
a refilled cartridge would work just as well as a new one,” she said. But after
seeing the printed results, Brown said: “There is no difference in the quality.”

[Author]

April 19, 2005 at 11:16 AM