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                  CHAMPAGNE

                              PRICES

                              The Inkjet won't cost you much, but it gives the                              manufacturers a licence to print money because of
         the high cost of ink cartridges, writes Angus Kidman

HAVING your own colour printer .seems like a great idea until the moment you have to buy new ink for it. While steep discounting makes it possible to pick up a functional Inkjet printer for less than $100, replacing the ink cartridges, especially colour ones for printing family photos, can easily set you back between one-third and one-half of that amount.

Given that a typical printer cartridge can comfortably fit in the palm of your hand, such prices seem more than a little steep to many buyers.

A study by the UK Consumers Association calculated that, millilitre for millilitre; printer ink cost seven times as much as vintage French champagne. That was in 2003.

Many new printers ship with low-capacity cartridges, so the day of reckoning for the hip pocket nerve

may well come sooner than you think.

Printer makers are quick to defend the high prices they charge, pointing to continuing advances in printer technology.

"Ink has lo be exactly correct in terms of its colour composition and purity," says Stuart Poignand, marketing man­ager for consumer imaging products at Canon

"Acidity can be an issue as well. It's important to get it right."

Lexmark is similarly defensive.

"It takes Lexmark two years to develop an ink that has sixty years' longevity, and the amount of investment is millions of dollars," says Stephen Waugh, Lexmark ’s general manager for consumer and small business.

"Every time you come up with a formula for an ink, you also have to patent it, and that can cost you         $US250, 000."

But behind some of the arguments about development costs is a simple market reality: printer companies make their millions by selling ink, not hardware.

Big-name manufactures are willingly admit they have a policy of offering low prices on hardware and taking their profits from consumables.

"What customers wanted was low acquisition prices for the hardware, and they'll happily pay to use the ink." Waugh says.

Those companies are also benefiting from increased use of printers in the home.

Photo printing is a particularly ink-hungry beast, since it demands 100 per cent coverage.

While individual use patterns vary widely, a typical printer goes through three sets of ink in a year.

"Typically, all-in-one device users consume more ink because they use the machines for copying as well," Poignand says.

"We're seeing some trending upwards." The typical vendor defence of high ink prices is to shift the focus away from individual consumables to the cost of the end results.

"I GOT ONTO A LOT OF PHOTOGRAPHY

WEBSITES TO CHECK ATTITUDES TO

  COMPATIBLE PRODUCTS AND A LOT OF

PEOPLE WERE RECOMMENDING THEM"

"It's important to separate the cost of buying the cartridge from the cost of using the printer," Poignand says. As an example, he points out that home printing of photos on specialised paper costs about 55c a print, a similar charge to commer­cial photo outlets. "It's not high for the convenience of producing prints." he says.

Other   manufacturers offer a similar justification.

"It's not enough just to make a good printer or a good print cartridge or good paper," says Rebekah O'Flaherty, vice-president and general manager of imaging and printing for HP in the South Pacific.

These elements have to work together as a team to achieve superior results."

Vendors say prices can vary considerably depending on exchange rates, as most printer consumables are imported.

"We've dropped our prices on ink in the last 12 months 18 times," Waugh says.

Another consistent claim by printer makers is that the only way to be sure of getting quality results is by paying top dollar for their branded con­sumables, rather than saving money with compatible cartridges from other manufacturers or through refill kits.

"If you buy from an original manufac­turer, you're going to get the best quality," Waugh says.

O'Flaherty cites a HP-sponsored study by Quality Logic that found HP's colour cartridges were 50 times more reliable than third-party replacement cartridges.

"Unreliable, faulty cartridges result in more reprints, streaky and smeared printouts, more wasted

paper, and use up more cartridges," she says.

As well as expensive marketing campaigns designed to hammer home that message, some companies use chip technology that makes it difficult for rivals to produce cartridges for their machines.

A number of vendors are pushing combo packs featuring ink and photo paper in discount bundles to attract price-conscious consumers. Those strategies seem to have paid off with industry estimates suggesting that between 85 and 90 per cent of printer user’s only purchase original manufac­turer cartridges.

Some see that as a market opportunity rather than an inevitable state of affairs.

Indeed, for some naysayers, the chance to move away from the big vendors' clutches is proving a business opportu­nity in itself.

Ian Fewtrell last year set up his own company, InkXpress, to import ink cartridges and other supplies.

There is a huge amount of fear, uncertainty and doubt in the market­place, and there's a big opportunity to save some money" he says.

In many European countries, more than 50 per cent of ink sales come from third-party manufacturers, he says.

Quality is not the issue large vendors paint it to be, he says.

"I got onto a lot of photography websites to check attitudes to compati­ble products, and a lot of people were recommending them." he says.

Fewtrell, who examined a number of franchising opportunities in the con­sumables market, decided to go straight to the source and check out a number of Chinese ink-makers.

The image of these producers as low-end is entirely inaccurate, he says.

"It's a billion dollar business - they're shipping container loads of product," he says. "I was very focused on the quality side of things, and so were they."

As well as selling directly to corporates, InkXpress is marketing to consumers via a website that offers schools and community groups the opportunity to sell compatible cartridges in return for 10 per cent of the sale price.

Companies and individuals buying third-party cartridges can routinely save between 30 and 35 per cent without sacrificing quality, he says.

That's certainly enough to indulge in the occasional bottle of champagne.