WHY IS PRINTER INK SO EXPENSIVE ?

[Anonymous]

http://www.smartmoney.com/Spending/Rip-offs/Printer-Inks-Murky-Math/
Why Printer Ink Is So Expensive
Leo
Tolstoy, wordy fellow that he was, used a lot of ink. He was also on
the frugal side, eventually renouncing his fabulous inheritance, trying
to free his serfs and opting to stay in his kid sister’s convent. So
you’ve got to wonder, if the Russian novelist had a home office, what
kind of ink-jet printer would he use? It’s a question worthy of a great
thinker’s consideration. After all, depending on which system you
choose, the cost of printing a black-and-white page can range from two
to 14 cents. Whether you’re printing a 1,400-page novel or your
favorite borscht recipes, it adds up fast.

Maybe he’d go for the
Kodak. Unlike its rivals, which sell printers at a loss and make huge
profits on the ink, the photo giant has been marketing its ESP printer
line with an appealingly contrarian pitch: a fairly priced printer that
takes cheap ink. Yes, it costs 30 percent more than comparable models,
but the cartridges cost less than $15, and per-page printing costs are
among the lowest in the industry. When I recently tried printing War
and Peace using the Kodak ESP 5 and its $10 black cartridge, I got all
the way up to page 317, where Rostov hears that the czar has been hit
with a cannonball. Three cents a page works for me.

You’d think
the line would be a surefire hit. After all, the cost of printer ink is
an old sore spot with consumers. In a 2007 Ipsos survey, 69 percent of
respondents said cheaper ink tops their home-printer wish list. And
it’s a legitimate gripe. The average retail price of a milliliter of
ink shot up 360 percent between 1999 and 2007. Meanwhile, a $30 ink
cartridge costs just three bucks to make; suppliers could cut prices in
half and still take in a nice profit, says Lyra Research senior analyst
Andy Lippman.

But for most manufacturers, the traditional model
is too lucrative to change. HP, for one, says its $29 billion Imaging
and Printing segment is its most profitable division, earning three
times what the company does on personal computers. That’s because even
while printer makers lose about $30 on every $100 printer sale, the
typical customer spends more than three times as much on ink over a
three-year period as he did on the printer. And often, the cheapest
models require the most expensive ink. If you find yourself
irresistibly drawn to, say, the $30 Lexmark Z611 printer, replacement
cartridges will set you back $66 a pop.

So is Kodak
revolutionizing the industry? Hardly. While the line launched with huge
press fanfare, it sold just 520,000 printers last year—a tiny fraction
of the 85 million ink-jet printers sold overall. Analysts say it’s
because consumers are too shortsighted to consider the cost of ink when
buying a printer. But I suspect the real reason is a strange quirk in
the law that makes it almost impossible to compare long-term ink costs.
The 1966 Fair Packaging and Labeling Act, which requires manufacturers
to state quantities on consumer packaging, allows just a few
exceptions, including lighters, safety pins and—you guessed it—ink.
Only one of the major makers, HP, offers page-yield information on its
cartridge packaging, and you still have to calculate per-page costs.
“Consumers don’t have the right information to make the right choice,”
says American Consumer Institute President Steve Pociask, who studies
the ink market.

Actually, the information is available, if you
know where to look. Two years ago printer makers agreed on a universal
standard to test how many pages their ink cartridges produce. HP and
Epson, bless their inky souls, link to this information from their
product pages. Canon and Lexmark, meanwhile, bury it so deeply online
that I had to call their press offices for directions. Once you’ve got
the data, you simply have to perform a series of seven calculations to
determine the three-year cost of ownership for any particular printer.
Have fun! Personally, while Tolstoy may not approve, I think I’ll let
my serfs do the work.

[Author]

June 30, 2009 at 12:07 PM