The Real Cost
The printer supplies industry has adopted the practice of mobile phone and razor blade sellers: charge low prices for initial equipment (i.e. the printer), and then make money from ongoing fees for additional needed consumables or components. Manufacturers sell consumer printers at cost or even sometimes at a loss of up to 20 per cent, say a financial analysts at Bear Sterns, who monitor HP and Epson. However, on the flip side, both firms earn a massive 60 per cent gross margin on inkjet and toner cartridges, says Bill Hand, financial analyst with Bear Stearns.
Those numbers are not exactly true, the manufacturers say. HP does make money on its printer hardware, according to Pradeep Jotwani, senior vice president of imaging supplies. In a prepared statement, Epson says that it "makes a reasonable profit on both" printer hardware and ink cartridges.
Still, consumers complain about the "give away the razor and sell the blades" business model which they perceive in the printer/ink cartridge market. Hence, the establishment of a market for cartridge recyclers to refill used/empty cartridges, or for the sale of cartridge clones at often less than half the market price of the brand-name items.
Protecting Profits
Not surprisingly, printer vmanufacturers regard the aftermarket as a financial threat. It has been stated that at least 80 per cent of overall profits (from within Epson's and HP's printing divisions) originates from consumable supplies.
Epson integrates microchips to authenticate its cartridges. You can reuse their inkjet cartridges by refilling them. But a used Epson microchip and cartridge lose some functionality, such as the ability to monitor ink levels. This can discourage some consumers.
UK Government Investigations
High ink jet prices among dominant ink manufacturers have caught the attention of UK and European Union regulators.
Following a year-long investigation by the UK's Office of Fair Trade (OFT), recommendation that Canon, Epson, HP and Lexmark more clearly inform ink cartridge consumers of their likely long-term printing costs. Printer makers had until October 2003 to better communicate the total cost of printer ownership, after which they face possible monetary fines from the OFT.
Also, in December 2002, the European Union linstigated a similar investigation. "We are evaluating barriers to entry into this market, prices and contracts that lock businesses into long-term relationships with OEM (Original Equipment Manufacturers) ink makers," says Tilman Lueder, a European Union spokesperson.
Both investigations originated from consumer price complaints. Regulators have said that the gripes also came from generic vendors and remanufacturers, who claim that the likes of Epson and Lexmark are making it very difficult to make compatible ink cartridges.
Jet Tec Ink Cartridges from UK Ink Supplies
Fortunately ukinksupplies.com can supply you with the same quality inkjet cartridges but at a fraction of the price - many are even up to 75% cheaper! The only difference is the name, packaging and the low, low price.
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UK Ink Supplies of Lincolnshire - official Jet Tec retailer in Lincoln.
This blog is by UK Ink Supplies, based in Lincoln, UK stocking a wide range of Jet Tec printer cartridges and Jet Tec laser toner cartridges for most printers. For more information please visit Jet Tec ink cartridges for the latest Jet Tec Epson, Canon, Lexmark, Brother and HP printer products.
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