Buying ink cartridges can sometimes be more expensive than the cost of the original printer. When you simply compare it in liquid form it is one of the most expensive liquids in the world, higher than fuel. In weight, it costs more than imported Russian caviar. But what makes them so expensive?
Printer manufacturers seem to use the same business model as shaving manufacturers and mobile phone companies when selling their products. This model involves reeling customers in by selling them initial equipment for a relatively low price but then charging a higher price for the products that are additionally needed. Consumers can spend up to three times the price of the original printer as they do on ink cartridges in its lifetime. Some businesses will actually sell their printers at a loss, knowing that they can make the money back on selling ink cartridges.
Some companies have explained that the reason why ink cartridges are so expensive is due to the large cost of research and development. HP spends around $1 billion a year developing their cartridge technology. It can take around three years to develop new ink cartridge technology, and companies argue that you are paying more for a high quality product with sophisticated technology, compared to the cheaper alternatives. However, even taking this into account the profit margins on ink cartridges are so high that even if HP cut the price of ink cartridges by half they would still make a healthy profit. HPs Imaging and Printing division is by far the most profitable, making around $25 billion per year.
Printer manufacturers seem to use the same business model as shaving manufacturers and mobile phone companies when selling their products. This model involves reeling customers in by selling them initial equipment for a relatively low price but then charging a higher price for the products that are additionally needed. Consumers can spend up to three times the price of the original printer as they do on ink cartridges in its lifetime. Some businesses will actually sell their printers at a loss, knowing that they can make the money back on selling ink cartridges.
Some companies have explained that the reason why ink cartridges are so expensive is due to the large cost of research and development. HP spends around $1 billion a year developing their cartridge technology. It can take around three years to develop new ink cartridge technology, and companies argue that you are paying more for a high quality product with sophisticated technology, compared to the cheaper alternatives. However, even taking this into account the profit margins on ink cartridges are so high that even if HP cut the price of ink cartridges by half they would still make a healthy profit. HPs Imaging and Printing division is by far the most profitable, making around $25 billion per year.
As with the rising cost of fuel prices, consumers have little alternative when it comes to refilling cartridges. Therefore companies can charge as much as they want and there will still be a high demand for their products. Third party cartridges are usually much cheaper but because of this they are also of poorer quality, the same with refilling ink. Consumers are more willing to pay a higher price for a brand they trust rather than wasting money on poor quality alternatives. They may also not work, for example, Lexmark have installed microchips in their laser jet printers which means that if a different type of cartridge is installed the printer does not recognise it and is unable to work. This technology could be installed in all ink jet printers which could further increase prices.
This is a guest post written by Claire Roper. She works in marketing and design for Printerinks.com. Claire manages the Printerinks.com reviews section and design criteria's. In her spare time Claire enjoys skiing and reading psychological books.
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