*NEWS*REFILLED INK CTGS,BIG MONEYMAKER

[Anonymous]

Refilled Printer Ink Cartridges Become a Big Moneymaker
Feb. 19–SACRAMENTO — At CompUSA recently, you could buy a single Lexmark ink cartridge for $32.99, only $5 less than the price of an entire new printer.
That example starkly illustrates that while the price of most computer hardware has plunged over the years, the cost of ink supplies has barely budged.
That’s been a boon to companies like Hewlett-Packard Co., whose printing and imaging business accounted for 51 percent of HP’s operating profits in the most recent quarter. But it’s been a financial pain for most consumers and has spawned an alternative industry: cartridge refills.
Franchise retailers like Cartridge World and Caboodle Cartridge are growing quickly, here and nationally, where consumers can bring in their old cartridges for refilling. And corporate giants such as Walgreen Co. and OfficeMax are getting into the game, too. In most cases, they’re all offering refilled or so-called “remanufactured” cartridges for about 40 percent to 50 percent less than new ones.
“People don’t want to pay $35 to $40 for a new cartridge anymore and they are willing to try an alternative,” said Charlie Brewer, managing editor of Hard Copy Supplies Journal, which tracks the print supplies industry.
That’s the case with Jennifer Stanley of Sacramento, who purchased several remanufactured cartridges from Caboodle Cartridge on Folsom Boulevard last week.
“Price is definitely a factor,” she said. “I could order my cartridges directly from Dell but that would be much more expensive.”
One thing that hasn’t changed is demand for ink cartridges. Despite the predictions of a paperless society, home and office printers are working harder than ever.
The popularity of digital cameras means more people are printing ink-hungry color photos, and Web users can’t seem to resist printing out maps, receipts from online purchases, e-mail attachments and even recipes, said Tuan Tran, Hewlett-Packard’s vice president for printing and imaging supplies.
Indeed, according to Lyra Research, based in Newton, Mass., worldwide ink cartridge sales are growing at a compound rate of 6 percent a year, and will hit $37.6billion by 2009.
Refill technology is nothing new, but early versions had some flaws.
“People were very leery of the quality,” Brewer said. “There have been stories about the cartridges leaking or the nozzles getting plugged up.
But improvements in technology and demand for cheaper products have turned refills into a $909 million business in 2005, one that’s expected to reach $1.78billion by 2009, according to Lyra.
There’s still debate over whether refilled and remanufactured cartridges are as reliable as new ones. An HP-sponsored study in 2003 by Southern California-based QualityLogic Inc. found that 54 percent of refilled color inkjet cartridges had problems, compared with 1 percent of new HP cartridges.
Walgreen’s debut in the market could give the industry a major boost. The Chicago-area company is installing refill machines in the photo departments of 1,500 of its 5,100 drugstores in March, said company spokeswoman Tiffany Bruce.

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February 27, 2006 at 10:37 AM