Why The "Brand Name" Printer Ink Companies Hate Third Party Vendors

If you purchased a Lexmark or Hewlett Packard inkjet printer over the past year, you must have noticed that the price you paid was surprisingly low. However, the ink cartridges that they sell with the printer will cost an arm and a leg, Right? (you might want to read "How to tell which printers are cost effective" ) What gives?

Well, the logic big companies use is something like this: price a brand new Gillette razor really low so you can sell the replacement razor blades really high, make sense?

Consumers are getting increasingly mad about having to pay high prices for brand named ink cartridges, like Lexmark and Hewlett Packard. "The brands dominate; together, Canon, Epson, Hewlett Packard and Lexmark account for 84 percent of the ink replacement market" states Tom Spring of PC World Magazine.

Enter the independent third party vendors. They are trying to capitalizing on a $21 billion dollar market need, by selling compatible ink cartridges and ink refill kits. Can you blame them for finding a niche that consumers are crying out for? The big name companies claim that third-party vendor ink is inferior to the brand-name versions. But are they?

Everything I have read or have experienced indicates quite the contrary. According to Neil Slade's research on testing compatible ink cartridges, he states, "Not only did I test nearly a dozen brands of inexpensive inks (two tests over a long period of time) none of them failed (even the ones with bad color) by clogging my print heads-- especially the G&G ink, which I have used for a year to print tens of thousands of documents. Of all the inks I tested, only Arrow failed because of bad cart ink flow, not even because it clogged the head."

It has been published that the gross margins on an Epson ink cartridge, for example, can sometimes top 60%. However, the Lexmark's and Epson's of the world will deny those percentages. Why then would they go as far as to plan implanting a chip inside their ink cartridges? A chip you say? Because the printer you purchased from them would only print once it recognizes this chip, thereby virtually eliminating the compatible ink cartridges market.

The brand name manufactures are also defending the reason for the high cost of replacement ink by saying that they are spending huge amounts of spending on technology improvements. "Predictably, Hewlett Packard and others say their cartridge prices aren't high considering the cost of research and development and manufacturing the equipment. Mr. Jotwani points out that at Hewlett Packard, an ink jet printer cartridge is very sophisticated. For example, each has 40 microscopic nozzles that precisely expel billions of ink dots across a page. Hewlett Packard is also attentive to ink quality to assure uniform viscosity and color".

So, after all is said and done, do you think it all comes down to money? The big brand name companies are just trying everything in their power to justify the cost of their ink products.