What I am about to reveal may seem like a fairytale to anyone who has purchased a printer in the last 8-10 years, but it is how things were, even as recently as eight years ago.

There was a time in the printer industry when printers, by today’s standards, seemed to be very costly.  They were built like tanks, and designed to last for years.  They tended to be large and heavy, and people bought them thinking they would be keeping them for a long time.  The cost of the consumables, ribbons, toner cartridges, or ink cartridges,  cost only a small fraction of the cost of acquisition of the printer.

Back then, most people who had printers used dot matrix models.  They were noisy and slow and they could barely print reasonable text, let alone graphics.  The printers cost $400 to $1000 or more, and the ribbons, which lasted hundreds of pages cost $5-10 to replace.  Even back then, companies sprang up making ribbon reinking systems and 3rd party or repack ribbon cartridges appeared, saving 50% or more on name brand product.  The printer manufacturers sometimes made noises about their printer consumables being superior but didn’t much seem to care, however, because they were making their profit on the sale of the printer itself.

When laser printers came onto the scene, the scenario changed a bit.  The printers were even more costly, still built like tanks, and the toner cartridges were large and complex, but still the cost was only a fraction of the printer cost and they typically lasted for thousands of pages before requiring replacement. Again, an aftermarket developed for both toner refills and reconditioned toner cartridges for those who wished to save on consumables.  And although the printer manufacturers desired the extra profits from consumables, the main profits were still in the printer sales.

Several different approaches were taken to dealing with consumables with laser printers. Laser printing technology requires three distinct consumable elements, those being developer, toner and the image drum, each one having a different potential useful life.  The toner powder itself is the only component that is used up in the printing process.  Some printer manufacturers, therefore, provided each element as a separate replaceable part.  While this lowered the price of maintaining the printer, it was more messy and required a better understanding of the printers inner workings to know which consumable had run its course and required replacement. It also required keeping more spare parts in reserve.  Some companies integrated the developer and toner power into one product, both of which were fused onto the paper.  That left just the image drum separate. Since the drum lasted many toner/developer replacements, that made some sense.  Still another innovation allowed for excess toner which remained on the drum after the print was produced, to be returned to the toner supply and be used again.  This lengthened the number of prints that could be produced per toner fill, and lead to smaller cartridges yielding the same number of prints.  Ultimately, many companies moved to a self contained toner, which was replaced when the toner powder ran out.  This allowed for a nearly clean process of replacement, but it increased costs of the toner cartridge since it contained a good part of the printer engine, including the image drum, which had a lot more life in it that one toner fill. That inspired more demand for toner cartridge refilling by 3rd party companies, such that some original manufacturers began to also offer a refilling or refurbishing program for their own cartridges, but at a premium over other providers.

These early printers were so well made that they rarely broke down. That meant they stayed in use for years, and were often resold for a second life. The problem with that was that the printers were being replaced very slowly, leaving the manufacturers with decreasing sales.  In order to get some of these units out of circulation, some manufacturers began offering trade in or trade up programs, which eventually took many of these older, but well built machines out of circulation.

Having learned their lessons, the printer manufacturers released newer generations of printers which were smaller, less durably built, and with smaller toner cartridges, as much to reduce the size and weight of the printers as to give the consumables smaller yields.  Still, the printer costs allowed for a great enough profit that the consumables were priced within reason as a small percentage of the cost fo acquisition.

When inkjet printers reached the market, the ratio of acquisition cost to consumables was still kept reasonable in the beginning. The ink cartridges were quite large and provided great quantities of output.  However, competitive pressures and inability to broaden markets fast enough, plus the very substantial and rapid technological changes in printer technologies, began to push manufacturers into different sales models.  They realized that price point was a key to increased sales, and the cheaper the printer could be sold for, the more market share that company could acquire. As pressures were brought to bear to speed up the replacement cycle, a race was on to the bottom price.  Yet, the costs of research and development and manufacturing could not justify those low prices, so something had to make up for lost profits.

Birth of the “Razor Blade” Business Model in Printers

Years ago, when disposable razor blades came on the market, replacing straight razors which were sharpened before each use, in order to get people to switch to the new disposable blades, manufacturers of the blades gave away the blade holder.  These holders were often quite elaborate in look.  But giving away the handle was costly, so the loss was taken up by selling the disposable razor blades that fit them at a premium price. Thus the razor blade business mode was created and is still used to this day. Polaroid adapted a similar business model with their cameras and film packs, keeping the initial cost of acquisition of the camera low but the cost of film substantial.
 
With inkjet technologies, three different types of design developed.  Early inkjet printers used a thermal head system that literally boiled the ink to propel it out of very small nozzles.  This system is still used today for some models, with heads are usually incorporated within the ink cartridge   Most of these cartridges are designed to be discarded after the ink runs out, but in reality, they can survive numerous refills until the image quality degrades or the head fails.  A more recent variation on this is a separate ink cartridge and head, where the head can last up to 20 ink cartridges or refills.

Yet another design, called piezo (electric), uses numerous electronically activated mechanical  pumps within the head.  These heads were designed to last for many years without replacement, and all piezo head inkjet printers have ink cartridges which are separate from the heads..

When printer manufacturers were finding they were in the midst of a price war, the razor blade business model began to look like a good alternative.  Buyers rarely research the cost of consumables prior to making a purchase, and keeping the cost fo acquisition low enough makes printers very inviting. It is often only after the purchase, that buyers determine how costly consumables could become.  The cartridges were at first only made slightly smaller.  Over time the printers began to be sold with  “starter cartridges” which may only have had 50% of the ink found in a full cartridge. Cartridges became progressively smaller and smaller.

As the cost of printers dropped to gain new markets, the cost of consumables rose to compensate, allowing 3rd party cartridge and refill services to flourish, which offered 50-90% discounts on ink cartridges.  With the cost of printers so reduced, and the business model designed for the ink cartridges to cover the profit margins, maintaining printer owners buying the original manufacturer’s cartridges became critical to the survival of the manufacturers.

This is the point where the changes really manifested.  The battle between 3rd party consumable suppliers and the original manufacturers have moved back and forth in terms of victories. Printer manufacturers began introducing designs to make their cartridges unrefillable using mechanical methods, software and electronic circuits. Considerable R&D as well as manufacturing costs went into these design changes, some of which have made the printers more complex and vulnerable to reliability issues.

Different areas of the world have taken different approaches to this battle. In the European Union, green political forces allowed for legislation to pass which requires printer manufacturers to sell refillable cartridges for both their inkjet and laser printers starting in 2008-09. In North America, printer companies have used the courts to uphold their patents and copyrights, in some cases convincing the courts that 3rd party products should be tariffed or fined, pricing them off the market.   To constrain EU printers form being imported into other regions, some manufacturers made their printers and cartridges regional so they will only work together.

Why does where the profit comes from matter for the consumer?

Some may be asking by now why it matters if the profit is in the printer itself or the consumables.  The answer is a resounding yes!, and here’s why.

When the profit margin is built into the cost of the printer, that allows for several
considerations:

– the printer can be better designed and made to last longer
– repairing a broken printer becomes economically feasible, relative to replacement cost
– there can be savings in design and complexity otherwise used to confound refilling or in blocking the use of 3rd party consumables
– the marketplace can allow for availability of a greater variety of consumable options (different types of inks or toner sets other than those made by the manufacturer)
– cost of use per page become potentially lower
– more effort is put into designing printers which have best practice and newest technologies, rather than holding off for the next cycle
– new model cycling is slowed
– there is less impetus on the part of the owner to replace the printer
– printers are kept longer, saving energy, materials and less toxics end up in the environment
– printers keep their value longer

On the other hand, when profits are mainly generated from inks and toners:

– printers are designed to defeat refilling or use of 3rd party consumables and are designed with more complexity to accommodate these “features”
– printers are introduced on a short cycle with newly designed cartridges so they keep ahead of the refill and 3rd party designs
– printers which require repairs are more likely to be discarded and replaced
– printers which run out of consumables may just be replaced rather than just buying new peripherals
– printers are considered disposable and get discarded more rapidly, adding to the landfill and creating unnecessary and costly waste

Clearly, from an economic and well as an environmental basis, for the consumer and the planet, the “razorblade” business model is not sustainable, and particularly so with something as large and complex as a printer.

It is also clear that since this business model works for the printer manufacturers and therefore isn’t likely to change (in fact, it has now been widened to include products like color laser printers) unless the manufacturers are pressured into change. Legislation in Europe has forced refillable printer consumables.  If those of us in North America wish to see similar results, we need to lobby our political representatives to do the same.