Yet another reason not to buy Epson…

all epson printers come with one cartridge color & one black.

sometimes you can find printers for free (full rebate). just keep getting cheap printers and take the ink. BONUS: it helps screw epson & others over. just an idea.

I own an Epson printer and recently recieved information about a court case against Epson. To summarize, Epson is offering a $40 online coupon if you choose not to argue the fact that their ink cartridges signal they are low/empty before they actually are. How’s that for stealing from your customers?

My colleague bought his printer on special. He bought 2 more for the ink cartridges as it was cheaper than just the cartridges and he gets spare parts to boot. Not that you ever actually get to use them but if one printer breaks he tosses it and uses the next one. Dispisable printer and cartridge.

(This is a piece that appeared in Noseweek March ’04, Weekend Witness, Sept. ’04 – about which nothing has, so far to my knowledge, been done except for that tv commercial about expensive printer ink.)

SOMETHING STINKS!

by Tom Dennen

ONCE you’ve got your business lean and mean and replaced all your people with computers, you have to box clever with profits for your shareholders.
Because Zero Population Growth means exactly that – no new people in the First World are buying your products, just the same regulars buying the same amounts every year. Naturally, you bump up your price, that’s just ordinary inflation, but shareholders tend to put pressure.
So a lot of industries are geting into the support system and accessory markets to make sure that their same purchasers have to continue to buy in at sometimes seriously inflated prices.
Polaroid started it (inadvertently) back in the fifties It’s called Pay Per Use (PPU); it’s a new economic model and, it seems we’re stuck with it for the interim, paying disproportionate prices for aftermarket products and services.
The aftermarket business model is the business model for TiVo, cell phones, and even razor blades. In each case, the hardware itself is sold below market value (even below cost sometimes), and the “consumables” (monthly fees, airtime minutes, razors, or, in this case I am examining, toner and ink cartridges) provide the ongoing profits.
The computer printer ink aftermarket industry leads the PPU field by high altitude Olympic measures. It unashamedly puts ten milliliters of (admittedly sometimes-designer) ink into a tiny little plastic box with a sponge inside of it and sells that box for up to seven hundred Rand to you.
Printer ink cartridges retail in South Africa at a median average of about four hundred Rand, which works out to forty thousand Rands a liter!
It costs about eight Rand a liter wholesale from at least one major manufacturer.
O K, so the average cost today of a black OEM refill is often under R 300 and the generic is around a hundred, but you get the idea – a lot of businesses are making serious bundles on ink.
Very serious bundles. If you’ve ever doubted it, check the math from ink wholesaler sales@vamex.com : $259 for five gallons of the best – WJ-190 black ink.
That’s about a hundred rand per liter, R10 per 100 milliliters or one Rand for ten milliliters – the amount of ink in the plastic cartridge you’ve just paid R450 for at Game!
And that’s just the wholesale price. The price from the world’s biggest manufacturer of printer ink, BASF in Germany, to wholesalers and major cartridge manufacturers has to be a tad less.
A WHILE AGO a whole industry sprang up around the business of refilling 10-ml printer cartridges at just a couple of hundred smackers – what a bargain – a R 199 profit on every Rand’s worth of ink they were selling!
Then we discovered that we could refill the cartridges all by ourselves and another industry leaped out of the same woodwork just to sell us the ink! (Retailing at around R1, 000 a liter, we were now into real savings).
And don’t forget that we kept the original cartridges.
Watching all this with shareholders on their shoulders like monkeys on their backs, the OEM printer industry, not to be left out of a virtual black hole of mega-profits, woke up and quickly put some serious defensive technology into their cartridges, high-tech and low-tech, part of the war against generics.
The high-tech trick: A chip on the cartridge that shuts down the printer when the ink runs out: No matter how much ink you put back into the cartridge it tells the computer “I’m empty! Don’t print until I’m replaced!’
The only way to reactivate your printer is to replace the cartridge with an expensive new one from the manufacturer – which has a chip programmed to tell your computer, “I’m full. Print away!”
Which sounded the bell for round two:
Manufacturers of cheaper, generic aftermarket refills now make them with a chip of their own which reassures your computer that all is well with the cheaper substitute in its printer.
The low-tech solution is even nastier but of course, simple: A thin layer of a high-tech sludge is floated on top of the original ink supply in what now becomes a self-destruct cartridge: When the ink runs out the sludge drains through and permanently clogs the inkjets.
“So wah! You can’t refill me!” And another couple of tons of toxic waste is headed our way?
At epsonrefill.com (or a tree-hugging green site nearby) you can order a cartridge chip ‘re-setter’ for $15 which tells the chip on your empty ink cartridge: “You’re full again!” -So you can, once again (with the resetter) refill the cartridge yourself, circumventing both the “oh, my god, we have to post a bigger profit this year” greedy printer manufacturers and the only slightly less greedy generic refill manufacturers who own the business anyway and don’t have to worry about shareholders.
Okay, so what, exactly, is the bottom, bottom line?
I addressed the following enquiry, politely I thought, to ink manufacturer BASF’s head office in Germany: “I am researching the profit path from manufacturer to consumer of printer ink cartridge content. Any assistance will be acknowledged.”
Their email reply:
Dear Mr. Dennen, Thank you for approaching BASF on Ink Jet Inks. Unfortunately we are not in a position to provide you with any data regarding profit path of inks.
Best regards.
Tough stuff, but as a business model, I don’t like PPU and it seems I’m not alone.
Actually, a lot of people don’t like it. For one thing, it distorts the marketplace. Printer manufacturers get people in with a cheap up-front offer and then charge them an arm and a leg once they’re hooked. The only place you can learn a trick like that is in the drug trade. Higher, more realistic prices for printers, coupled with a more competitive supplies market, would make for a better deal for you and me.
The ‘I-am-empty’ chips have, in the meantime, spawned another creative use of the American Digital Millennium Copyright Act (DMCA), a law that was originally intended to curb the copying of movies and music – don’t go hiding your cd and dvd hoard, now! – But today, the fight’s getting bloody in a scenario not envisaged by the original legislation.
In December last year, Lexmark filed a DMCA claim against a company called Static Control, saying that the latter’s chips circumvented the measures Lexmark had taken to protect its intellectual property (which as we have seen is very expensive intellectual property).
I think Lexmark’s intellectual prices may explain why companies like Static Control – whose main business is making antistatic plastic bags that electronics parts come in – see an opportunity to make a buck selling knock-off replacement cartridges. And there are many other companies (which will be affected by any decisions arrived at in the case) that do the same – collect, refill, and sell used original equipment cartridges,
And why not? We’ll see.
Meanwhile, If this legal strategy is successful, how long will it be until all sorts of products include small chips just to head off competitors? Imagine a world in which the only parts we can buy for our cars come from the original manufacturers, and are priced accordingly. Get the idea?
Meanwhile, the European Union has banned the use of cartridges that have chips that make the cartridges non-reusable. The reason: Thrown away, the cartridges increase toxic landfill and are a threat to the environment – All in the quest for profit.
Asked for his comment, Hullet-Packard’s Warren Rother started telling me all about high R & D costs that have to be recovered, transport costs, etc., etc., etc., but he found that he had to admit that they didn’t add up to R30,000 to R40,000 a liter.
He did, however, in exchange for his acceptance and understanding that the PPU culture may be a little rip-offish, offered to help out this old journo by pointing me toward a scam you should be aware of – and gave me the names & addresses of the four gangs operating it (This, of course, may be another piece, I have their names! – tom)

I used to work for Epson America until a French VP brought a Brazilian up to do the work I was hired for. According to the FBI, Epson has some sort of legal permission to do such things.

All I can say is what might have been known as a good company in the past now is also getting rid of employees before retirement age now as well, according to old friends still in S. CA.

If ever there was a company to boycott due to labor practices and tremendously overpriced inkjet cartridges, Epson should be at the top of the list!