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 user 2006-05-24 at 1:00:00 pm Views: 106
  • #15536

    Price war over printer ink
    2006For anyone who’s marveled at the low cost of today’s color printers
    – then cursed when buying yet another costly ink cartridge — relief
    is on the horizon.

    war over ink prices is unfolding in the backyard of one of the world’s
    biggest high-tech companies, Hewlett-Packard Co., which employs about
    1,800 people at its printer research and design campus in Vancouver.Ink
    has long been highly profitable for HP and its top competitors –
    including Epson, Lexmark and Dell. Each printer these companies make
    works only with manufacturer-approved cartridges, and the ink wells in
    these cartridges have been shrinking in recent years.The result:
    Customers are paying more — generally $15 to $30 per cartridge — and
    getting fewer printed pages in return.But now companies such as
    Cartridge World, which recently opened outlets in Hazel Dell and off
    Northeast 104th Avenue, and Rapid Refill, which opened its doors on
    Mill Plain this month, are giving consumers a cheaper option.These
    stores clean and refill used cartridges, then sell them for as little
    as half the cost of a new one.And unlike the messy refill operations of
    the late 1990s, the printer company’s newest competitors promise clean
    cartridges, quality ink and an easy experience. Some will also rebuild
    laser cartridges and fill them with new toner at significant
    savings.It’s a winning proposition for people like Paul Post, a
    Vancouver-based commercial real estate broker and financial services
    adviser. “I have a very, very old laser printer,” Post said. “It was
    close to $40 per toner cartridge.”By purchasing refilled laser toner
    from Cartridge World, Post estimates he’ll save around $120 per year,
    nearly cutting his toner costs in half.”And I think the quality is

    The franchisees
    World and Rapid Refill are the big chains to watch, according to a
    presentation by Joy James, a consultant specializing in the printer
    cartridge aftermarket, but there are others — like Island Ink Jet –
    making inroads.There are also the little guys, like Inkworld in
    downtown Camas, run by Tim Shepherd.”Everybody’s trying to save a buck
    – it’s a no-brainer,” said Shepherd, who taught himself to refill
    cartridges with a syringe.His refill process will work once per
    cartridge, and offers a savings of 20 percent to 50 percent, depending
    on the cartridge.At Cartridge World and Rapid Refill, cartridges go
    through a much more elaborate process involving centrifuges and refill
    machines. Ink jet cartridges can be refilled a half-dozen times this
    way.Laser toner cartridges, which are rebuilt from scratch, can be
    remade indefinitely.Though getting into these businesses as a
    franchisee requires a hefty up-front investment, local store owners say
    the return has been rapid.Mike Morton, 59, spent more than $200,000 to
    become a franchisee for Minnesota-based Rapid Refill, he said.This
    month, he opened a store at 308 E. Mill Plain.”I’m contractually
    committed to opening two more stores in the next 18 months,” he said.He
    plans to open eight to 10 stores in Clark and Cowlitz counties in the
    next five years.Morton expects to focus on business customers. He also
    plans to set up “drop boxes” around Vancouver, where customers can
    leave a cartridge with a neighborhood retailer, then pick it up and pay
    a week later.For his efforts, Morton said he’s optimistic his first
    Rapid Refill store will be profitable within two or three months.Teri
    Harwood, who in December opened a Cartridge World in Hazel Dell with
    her husband, Jake, expects her store to be profitable by the end of
    summer.”So far, we’ve actually beat our revenue projections,” Harwood
    said.Today, 40 percent of current customers are businesses and 60
    percent are home users. Teri Harwood hopes to get that ratio to 50-50
    by networking, offering on-site pickups for business owners, and
    presenting cost benefit analyses.”We’re targeting small to medium
    businesses,” she said. “Based on one cost analysis, we showed an
    accounting company that we could save them $1,400 to $3,000 over five

    A threat to the big guys
    But not everyone is smiling at the arrival of the independent refiller competition.
    did not respond to a request for comment on the recent proliferation of
    cartridge refill stores, but last year the company accused
    Australia-based Cartridge World of using its patented ink formulas and
    asked the newcomer to stop.”HP spends millions of dollars annually in
    R&D to create innovations that benefit our customers, and we are
    rigorous in our protection of this investment,” Pradeep Jotwani, senior
    vice president of supplies in the company’s Imaging and Printing group,
    said in a statement released in October.Of HP’s total profits, 57
    percent come from its Printing and Imaging Group — most of that from
    replacement ink jet and laser printer sales, according to Forbes
    magazine.With retail refillers gaining market share, the big printer
    makers are likely to keep re-engineering cartridges, and they may also
    lower prices to stay competitive, according to Cindy Shaw, an analyst
    with Moors & Cabot Capital Markets who watches the printer
    industry.Rapid Refill franchisee Morton describes the pressure his
    business puts on the big guys as “a win-win.”"As they defend against
    shops like ours, their product gets better,” he said. “The customer
    wins. Because if we don’t bring something positive to the table other
    than price, we don’t deserve to be here.”

    Did you know?

     Eight printer cartridges are thrown away every second in the U.S., according to Recharger magazine.

    Quality refills will work fine for most people, but analysts single out
    Hewlett-Packard’s Vivera inks as superior for photos and papers that
    must be archived.

     Brand name matters — not all print cartridge refill companies are created equal, and quality can vary widely.

    Walgreens and Staples stores are rolling out refill kiosks that will
    compete with storefront refillers such as Cartridge World and Rapid