Why is printer ink so expensive?

August 21 2012 by Ellen Roseman

A century ago, Gillette started giving away razors at reduced prices to increase sales of its high-priced blades.

Many years later, wireless phone companies started offering subsidies on new devices to induce customers to sign long-term contracts.

This lowballing strategy is nowhere more evident than in sales of printers and ink. It’s often cheaper to replace a printer than to replace a cartridge.

I recently found my new printer came with a half-empty cartridge, which ran out a few months after purchase. When I wrote about this discovery, I tapped into a deep well of rage about the business model.

One reader sent me to a great infographic, which showed black printer ink as the most expensive liquid at more than $3,000 a gallon.

With one gallon of black printer ink, you can buy 223 bottles of bleach, 139 bottles of olive oil and 98 bottles of vodka.

Despite predictions of a paperless world, we seem to be printing as much as ever. Reading long documents on a screen is no picnic. My desk is full of printouts.

Also, many companies now charge you for mailing paper bills, forcing you to print copies yourself if you need more than an electronic record.

Every conversation ends up with HP, which still dominates the market for printers and ink. A Motley Fool article says HP has a 42 per cent market share, more than the next two competitors combined.

Why does printer ink cost more than blood by volume and more than caviar by weight?

Printer ink is so expensive because manufacturers can make it that expensive. It costs more than it should, says an article by a printing supply company.

Printer sales are in decline because of a combination of mobile devices and cloud storage, says this article at ReadWriteWeb/Cloud.

Seems like everyone writing on this subject has a vested interest. So, I’m turning it over to the you, the consumers, to give your views on what’s wrong and what’s right with the business model of low-priced printers and high-priced ink cartridges.

I’ll post a few readers’ comments below. I also want to mention that HP gave my reader, Brian Smith, two full replacement cartridges to thank him for his inquiry — even after confirming that he was not shortchanged with his purchase of new printers.

My open letter to Bell’s CEO

August 6 2012 by Ellen Roseman

I don’t have a response yet from George Cope to my Saturday column, saying that Bell needs to make an Olympian effort to fix its customer service.

Do I expect Cope to respond? To quote Carly Rae Jepsen, “Call me maybe.”

My readers did respond all weekend, telling me about hurdles they had to jump to get through to Bell. Many never did get through, which is why they’re writing to me.

Some employees thought I was out of line. “What is your problem?” said one. “All your articles do is encourage people to call in with a belligerent acrimonious entitled attitude. I take calls every day from people who are mad as hell at Rogers customer service and desperately want to switch. Where is your article on that?”

Believe me, I know Rogers has service issues as well. I’ve written about them here and here, among other places.

But Rogers does have an ombudsman, an innovation that Bell has resisted. Rogers also has a policy of keeping customer service calls in Canada and not sending them overseas, as Bell does.

The problems pinpointed in Michael and Jessie Houseley’s Bell story — a sales culture gone wild, lack of follow-up service and speed in sending accounts to collection — are common to many large companies.

Publicly traded corporations are rewarded for acquiring customers, not for keeping them. They overcharge long-time loyal clients and save their best deals for newcomers and those who threaten to leave.

So, if you’re unhappy with Bell and Rogers, buy their stock. The worse they treat customers, the better their shares often perform. BCE investors enjoyed an 18 per cent return in the past 12 months. Rogers investors had an 11 per cent return in the same period.

I’m posting a few comments from readers below. I’m also reminding you of my course, Investing For Beginners, which starts this fall at the University of Toronto’s school of continuing studies.

If you invest your Thursday evenings for nine weeks, you’ll improve your skills at understanding the stock markets and handling your own money.