Back Is the Future
Greetings and welcome! I’m Christian Pepper, an expat Brit living in America and one of the founders of Printersdirect, a company that began in 2004 to remanufacture used printer hardware to an equivalent-to-new standard, which we brand as “MPS Ready.”
In researching blogging, I discovered that there are two primary reasons why bloggers give up their spare time to write: (1) they feel passionately about a subject and want to spread the word, or (2) they want to sell you something.
For transparency, I wrote this blog for both reasons. I want you to buy remanufactured printers, and I passionately believe that they are the answer to most printing needs and the fiscal challenges faced by our rapidly changing hard-copy industry.
So now that that’s out there, let me set the tone:
In case you’ve been living in the stationery cupboard for the last few years, you should understand and accept begrudgingly that office printing … is in decline.
That’s right: Mobile devices (i.e., tablets, smartphones, etc.), the ability to scan to file, consumer frustration with high printing costs, and improving environmental attitudes are all contributing to the shrinking number of pages we print. Proper managed print services do nothing to staunch the blood flow; if undertaken honestly and agnostically, its objective is to eliminate unnecessary printing.
The big question, however, is if this is a steady decline toward a smaller overall market or if print will fall off a cliff and the paperless office will become a reality.
For a 15-year veteran of the print industry whose own company is now starting to reach its stride, the prognosis could be very worrying.
Back is the future
Question: Where to start? Well, at the beginning, obviously.
In the good ol’ days of the ‘90s, office laser print devices were to businesses what tablets are now in the twen-teens. They were innovative. They exponentially increased productivity and transformed the way we conducted business. Back then, print was “on demand,” and for the only time in its lifecycle, it was sexy!
Unlike early PCs that were vastly expensive to purchase, the print device manufacturers’ business model offset a lot of the hardware cost against future profit because the devices required consumables that would run out and need to be replenished. Thus, most of the margin attributed to printing was earned through consumables and based upon the amount printed.
It was utopia until businesses began springing up that learned how to refill empty cartridges. As these companies didn’t have the financial inconvenience of having to design and build the print devices or consumables themselves, they could offer their refilled cartridges at a cheaper price than the originals.
A cold war broke out. OEMs had to fight this competition while preserving the margins of their business model. Rather than simply cutting the price of their consumables (which would damage their overall profitability), they employed a couple of tactics:
They innovated, producing better print devices with ever-enhanced printing speeds and functionality to encourage frequent fleet upgrades.
They launched more and more models with different toner designs at shorter intervals. Why? To make it harder for aftermarket ink and toner companies to compete in all the different model segments.
Fast forward to the present, and this is what has resulted:
Businesses are littered with many different makes and models of print devices that all require different consumables, parts and service.
Devices are installed with more functions and capabilities than most business environments require.
Back to basics
What’s really important in printing?
Lyra Research states that 60 percent of all printing is monochrome — simply putting black marks on paper.
Thanks to the OEM and aftermarket cold war, print technology has topped out, and once you get into the medium desktop-size segment, nearly all print device models have the necessary “speeds and feeds.”
Print devices are like cars: Why produce a Toyota Camry that can do 140 mph? The speed limit is 70 mph, and most driving done in this type of car is 30 mph around town. Similarly, most printing is 1- to 5-page word processor documents, emails, PDFs and spreadsheets. How many companies print documents that are more than this and require speeds in excess of 40-50 ppm?
Rather, printing should be a commodity. As all monochrome technology can print at speeds faster than we use and at resolutions finer than the naked eye can discern, what is most important is cost.
And that’s the problem. The OEMs don’t want to go there because they don’t want customers/dealers to understand this simple fact: The older your print device, the cheaper the aftermarket ink or toner cartridge and, thus, the cheaper the cost of printing. That’s right – it’s that simple.
New print device = New OEM cartridge.
Old printer = Cheap aftermarket cartridge.
Result? The older printer CPP is anywhere between 50 and 75 percent cheaper.
Imagine this car-based scenario. You drive a 5-year-old Toyota Camry. The gasoline costs $2 a gallon. You drive a 7-year-old Toyota, and the gasoline for this model costs $1 a gallon. Meanwhile, the 2012 Toyota Camry only runs on the latest Toyota gasoline, which costs $4 per gallon.
How many new cars do you think Toyota is going to sell this year?
As crazy as this sounds, this is what happens every day in every office in the world. Uneducated customers and (worse) dealers who simply don’t know any better decide that the old printer needs replacing, and they go out and buy a new one.
Imagine that you are a customer or a dealer; what does this scenario look like in financial terms?
End-user cost goes up 2-3 times.
Dealer profit goes down 2-3 times, and in some cases, dealers lose money on every page printed if they are charging less than 2 cents per page in MPS.
What’s the medicine?
(1) Don’t buy any new hardware unless the service costs start becoming a financial burden. This option is not practical, as print devices do break down more frequently as they get older.
(2) Buy a remanufactured print device. The model ages are older, so they can utilize reman toners, but they have been remanufactured, so the quality is such that these devices won’t cost a fortune in unplanned service calls.
Want to find out more? Email me at Christian.email@example.com or leave a comment in the comment section below. And check out the Printersdirect MPS Ready Blog www.printersdirect.com/blog/.
Posted by Christian Pepper on May 07, 2012