April 2013

Low Cost Ink Cartridges

Low Cost Ink Cartridges – The Epilogue

By:  Michael Harrison, Cartridge Express Recycling Ltd

The global printer consumable business has an estimated value of $33.4 billion (Smithers PIRA 2011) and is expected to exceed $67 billion within the next 5 years with HP (Hewlett Packard) currently claiming a lion’s share of the market. Sales of third party refilled or recycled printer cartridges occupy about 35% of this market and rumour has it that OEM’s (Original Equipment Manufacturers) want it back.

If the OEM’s can claim back the market share from the third party companies who supply a low cost alternative product then it’s not good news for the companies who supply these products but it also spells bad news for the consumer too. If the cheaper alternative is removed no longer will end users be able to shop around for cheaper compatible ink cartridges, and everyone who owns a printer will be forced to buy higher priced genuine OEM printer ink, a situation HP, Canon and others will no doubt be very happy with.

You’d be hard pressed to say there is an all-out war between the OEM’s and the third party refilling companies but they are certainly making life hard for those involved, the OEM’s will claim that the changes that have happened recently and that are still happening within the consumables market is to benefit their own companies without deliberately effecting any third party companies but whether or not its deliberate or by default printer cartridge refilling and remanufacturers across the globe must be slightly worried.

Exactly how these big corporates aim to claw back market share remains to be seen but already there has been a few key events that you could say go some way to achieving their goal. The three recent events that in my mind spell trouble for everyone who has ever bought a refilled/recycled cartridge or any company involved in the manufacturing or supplying of these products are first of all the discouraging of consumers from buying non genuine products, secondly Closed Loop Recycling Schemes and last but by no means least recent Patent applications.

To understand how these three things can potentially have such a huge impact and affect everyone who owns a printer we need to delve a little deeper.

OEM’s are discouraging the consumer from buying non genuine products.

Way back in 2003 when I first started to remanufacture and refill ink cartridges it was quite a straight forward thing to do, you simply refilled the cartridge put it back in the printer and it worked, no drama, no on screen warnings and no flashing lights and the ink level gauge was happy to let you know how much ink was left and informed you when you were due to run out. Back then, when printer cartridges were bigger with plenty of ink inside OEM’s like HP didn’t seem too concerned with the refilling of empty cartridges and did nothing to deter it, worlds apart from today’s smaller inkjets with a thimble full of ink and the annoying little things that the OEM’s have done to deter the end user from buying lower cost ink. If you own an HP or Epson printer and have recently purchased compatible non genuine cartridges you will be well aware of what could be considered as underhand tactics that the OEM’s are using annoy you so much that you will stick to the genuine product. Flashing lights on the printer, a message saying “possible counterfeit cartridge” and an ink level gauge that often does not work on a refilled cartridge are all things that consumers feel are being done to discourage them from buying a lower cost alternative to higher priced OEM products.

There is also OEM pricing strategies that are aiming to bring down the cost of genuine printer consumables. Currently an end user can potentially save 60% or more by using a recycled/refilled cartridge in comparison with the genuine product. OEM’s are introducing smaller cartridges with less ink inside which can be sold at a lower price, this has been well reported in the media lately, they are also making the internal area smaller so if it can be refilled, which more and more cartridges can’t be these days, but if it can, it can only carry the same low amount of ink. Typically a refilled or compatible cartridge would have more ink in than its genuine counterpart, but these changes have done away with the ‘maxi-fill’ concept which, coupled with the annoying printer functions I mentioned above are making the refilled cartridges a slightly less attractive purchase over the genuine smaller cartridges. If the OEM can set the retail value so that when buying a non-genuine product it is marginally cheaper than a genuine instead of 60% cheaper it is hoped that the end user will choose the slightly more expensive genuine product to avoid the annoyance factor of the printer reacting to the compatible cartridge.

Closed Loop Recycling

HP recently became the first OEM of printer consumables to have a full closed loop recycling scheme with other manufactures such as Canon and Epson following suit. I’m sure there will be a few readers asking themselves what a closed loop recycling scheme is so allow me to explain, in simple terms a closed loop recycling scheme is usually a zero landfill scheme where the manufacturer of a product collects it when it has been used to recycle it into more new products. The process for printer cartridges usually involves shredding them into tiny pieces and the metals and plastic separated to be reused. All cartridge manufacturers have a collection program of sorts to collect cartridges; the fact that the OEM’s are doing this at such a successful rate is part of the problem for ink cartridge refilling companies.

Surely the fact that these OEM’s collecting and recycling all their products is good news right? Well it all depends on which side of the fence you are on, from one point of view maybe! HP for instance recently collected and shredded then recycled over 39,000,000 (39 million) empty ink cartridges, this too is good news for the environment isn’t it? Well Yes! Obviously but consider this point too, to refill or remanufacture a printer cartridge you need empties, empty cartridges are traded worldwide by recycling companies as a raw material for the refilling industry. It is this kind of closed loop recycling scheme that the OEM is operating that is removing the availability of raw material (empty cartridges) so if the closed scheme becomes successful enough, which it most likely will at some point, it will eventually mean there will be little or no empty cartridges available on the market to refill, which in turns means that the refilling companies will not be able to offer a lower cost compatible products to the end user, which obviously means that the end user will have to pay higher prices for the genuine products. The OEM stranglehold has just become a little tighter.

There is also another casualty to the Closed Loop Recycling Scheme, because empty printer cartridges have a commercial value many charities have teamed up with cartridge recycling companies to collect empties to raise funds for their cause. Many of the big recognised charities and lots of local charities are all involved and rely on the funds they raise from recycling cartridges. Already charities are seeing a drop in the donations they receive and all the points raised in this article are having a knock on effect on them too, a sad but true fact.

Recent Patent Applications

There is another dark cloud looming on the horizon for cartridge refilling companies and end users alike. Some of the major OEM’s are applying for further patents with regards to compatible cartridges. HP recently applied for and was granted patents that protect the refilling of new and used ink cartridges, these new patents also cover the exact refilling process that is used by the OEM’s themselves and the majority of third party refilling/remanufacturing companies.

What does this actually mean and how does it affect the end user or consumer? Basically this tells us that HP and other OEM’s are now holding all the cards when it comes to the refilling of cartridges, the patents they hold could, if they decide to enforce them render the processes and methods involved in correctly refilling a cartridge illegal, if they did decide to enforce these patents in the courts and were to win, which they undoubtedly would then the refilling and remanufacturing industry could in theory be shut down almost overnight. Consumers would have no option than to buy the genuine products at higher prices with no choice of variation.

So all is not rosy at the moment for the printer consumables industry, the figures quoted above certainly indicate growth is on the agenda, just how much of this growth will be seen by the third party refilling companies remains to be seen, no doubt the OEM’s will continue to discourage users in any way they can. The closed loop recycling will continue to strip the market of raw material; will these patents be enforced in the near future? I would guess so, why apply for them and not enforce them but we will have to wait and see, one thing is for sure, if they do, by eliminating the third party refilling and remanufacturing companies the OEM’s will be able to have their cake…..and eat it.

Michael Harrison is a content writer and owner of Cartridge Express Recycling Ltd (www.cartridgeexpress.net) located in England, UK.