The Cost of Ink

by Kevin on January 25, 2008

I don’t have to tell you that printer ink is expensive. But do you know how expensive?

Let’s take a look at this HP 38 Magenta cartridge as an example. Price at Amazon: $29.99. Number of ounces: 3.4 ounces. That’s $8.82 per ounce, if you absorb the cost of the plastic in the cartridge as well.

There are 128 fluid ounces in a gallon. Do the math. For a gallon of this ink, you would pay $1,128.96. And you thought gas was expensive!

Of course there is a ridiculous amount of profit built into the ink. If you can find refurbished ink for your printer from a reliable source, you are going to save a ton of money. Thanks to FatWallet, I did just that.

At FatWallet, I discovered 123inkjets.com. They sell refurbished ink cartridges on the cheap. For $51.97 I was able to buy 12 cartridges for my Canon Pixma iP5000 printer. Thanks to the rebate process at FatWallet, I’m going to get $11.43 of that back. If I had gone to a local office supply store, I would be able to buy maybe two or three cartridges for the same amount. Simply stunning.

I haven’t had to use the cartridges yet, so I’ll put up an update in the future. There is always the chance of it being an inferior product. Yet, I doubt it.

Using HP’s Annual Report for 2006 (warning – large PDF file), let’s run some numbers:

  • Imaging and Printing Group
    • Net Revenues: 26,786 million
    • Earnings from operations: 3,978 million (14.85% of net revenues)
  • Company as a whole
    • Net Revenues: 91,658 million
    • Earnings from operations: 6,560 million
  • IPG as % of entire company
    • Net Revenues: 29.2%
    • Earnings from operations: 60.6%

That’s right — if I am reading the numbers correctly, the Imaging and Printing group brought in 60% of HP’s earnings from operations in 2006. Do you think ink is profitable now? I’m sure part of that profit is the printers, but they essentially give those away to get you to buy the ink. This is very similar to Britta pitchers — they want you to buy a ton of filters, not pitchers.

We’ll see how the refurbished ink works out. I’m hoping I’ve found a much cheaper alternative. Ink is ink after all.

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