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Monday, February 25, 2013

How OEMs are "squeezing" money from consumers

In an article featured by British newspaper the Guardian, the issue of OEMs "squeezing ever-increasing amounts of cash out of the poor consumer" is highlighted, particularly the complaint from many that OEM-branded ink cartridges run out of ink too quickly.

The article investigates the two Epson cartridges – the T032 color cartridge released in 2002 and the T089 released in 2008, and points out that the amount of ink in the cartridges has reduced from 0.54 oz to just 0.12 oz due to a reduction in the size of the ink tank. Similarly, when observing the insides of HP ink cartridges it appears that the sponge holding the ink has reduced in size, meaning that many of the newer cartridges consist of mostly empty space, as found by in May last year.

Commenting on the issue, The Recycler’s David Connett said: "The strategy has been to nudge the consumer towards a high frequency of purchases. The big printer manufacturers have reduced the amount of ink in a cartridge, encrypted the chip technology, and used aggressive marketing tactics to discourage refills."

The Technical Director of UKCRA Chris Brooks agreed, adding that "the big printer companies do all they can to squeeze ever-increasing amounts of cash out of the poor consumer in exchange for less ink".

Color cartridges in particular are said to be poor value for money, with Martin Dyckhoff, Store Owner of Cartridge World in Aylesbury, explaining: "They’re very bad value because when one of the three colors runs out the entire cartridge stops working. We always recommend people buy a printer with a separate cartridge for each color."

The article goes on to cover the emergence of a new size of cartridge, labelled by OEMs as "XL", which appear to be the same size as regular cartridges but hold significantly more ink and can cost almost twice as much. However, it is noted that "some makers’ XL cartridges may contain less ink than standard cartridges issued a few years ago", with Environmental Business Products’ Patrick Stead commenting deeming them an "insult" to the consumer: "HP sells half-full cartridges, then sticks an XL on, fills them up, and sells them for even more money. The difference in manufacturing costs is pennies. It’s a shocking rip-off."

It is thought that these OEM tactics are a result of them losing market share over the years, with competition from remanufacturers, which have won a nearly third of all sales, as well as Asian clones contributing to falls in OEM sales and Brooks commenting that "the big three [OEMs] have seen a year-on-year erosion of their market share. They had to do something drastic."

However, the OEMs deny that they are doing any wrong, with a statement from HP claiming that "focusing on any single factor such as the point of purchase, the up-front cost of the cartridge or printer, the cost per page, or the ounces of ink in a given cartridge is not an accurate way to measure the cost of printing", adding that the cost per page of printing should be focused on. Epson meanwhile argues that advancement in technology has meant that print heads have become more efficient over the years and that consequently "they are able to produce a greater number of pages with an equivalent amount of ink".

However, Brooks responded to this by noting: "These improvements cannot justify a five-fold decrease in the amount of ink in a cartridge. The cost of printer ink is the lowest it’s ever been, a few dollars for a gallon. Many cartridges cost less than $0.80 to make. The mark-up is enormous. The consumer is paying far more pro-rata today than a decade ago for cartridges containing very little ink."

If you need any remanufactured / compatible printer supplies, visit our web store

Source: British newspaper discusses OEM money-saving tactics

1 comment:

Anonymous said...

Problem is that consumers don't read the information or really know much about their printers or imaging devices to understand how the Lexmark's, HP's Canon's Xerox's and others have been ripping them off with $3000 per gallon ink. Shame that the un-informed are always taken to the cleaners.

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Since 1999 we have been a major supplier of original brand (OEM), compatible replacement and remanufactured Premium Quality inkjet cartridges, laser toner cartridges and other printer supplies. Our customers range in size and include the United States Government, small and large businesses, schools and individuals. Each of our customers is equally important to us and is treated with the same friendly professionalism. Visit us at Price Less Inkjet Cartridge Co.