An inside look at imaging supplies

Office World News, May/Jun 2003 by Ellis, Alicia

The market for imaging supplies presents itself as a profitable area for office products dealers to pursue. Whether you choose to offer OEM, compatible cartridges or any number of supplies, the market has been greatly affected by the decreasing price of printers, the increase in use of MFPs and the increased availability of color in the workgroup.

Offering cartridges for Inkjet and laser applications, ribbons for fax and point of sale (POS) customers, and copier consumables will allow dealers to enhance their current customer relations and develop new clients looking for these products.

A recent web- based study of U.S. toner and compatible inkjet cartridge manufacturers conducted by Lyra Research shows that about 80 percent of these companies enjoyed sales increases in 2002, with larger compatible manufacturers (those selling more than 500 cartridges per month) showing the strongest growth performance.

According to Lyra, although many loner and compatible inkjet cartridge manufacturers are small start- up businesses, they have successfully challenged companies such as Canon, Epson, HP, Lexmark, and Xerox for a share of the profitable hard copy printer supplies market. In the process, compatible manufacturers have fostered the creation of a multi- billion dollar industry of technology and services suppliers.

Lyra's new report, Cartridge Re manufacturing: Profits and New Challenges, probed the state of the remanufacturing business in the U.S. to determine what products or services compatible manufacturers sell and to whom they sell them; their business processes and problems; the attributes they believe their customers value most; and their criteria for purchasing parts and remanufacturing supplies from various industry suppliers.

"The research shows that the slate of the loner and inkjet remanufacturing industry in the United Stales is quite healthy, with the typical compatible manufacturer enjoying strong revenue and profit growth over the past year despite a significant economic downturn for most businesses," says John Mc Inlyre, Lyra's VP of custom research.

In another recently published while paper, USA Marking Supplies Distribution Estimates: 2000-2006, CAP Ventures analysts examined the U.S. distribution channels for marking supplies. The report is designed to allow readers to forecast future growth rates, pinpoint key growth segments, and identify trends and developments in the industry.

The study breaks down the entire marking supplies industry into products and channels offering unique comparisons of the $34 billion industry. The report found that the supplies market is largely dominated by inkjet and workgroup laser supplies. Combined, these two markets account for 82 percent of the marking supplies market. As a result, they will significantly impact market share for the channels that sell them.

The study also shows an increase in the demand for color copier supplies, which will result in a 28 percent increase from 2000-2006 for contract stationers and a 10 percent overall increase to 2006 for the BTA channel. Workgroup color laser supplies are also expected to be a major market for contract stationers.

Printer and desktop inkjet cartridges are expected to continue their slow upward growth and will remain a profitable area while the final point of sale for impact, fax and thermal ribbons will decline as the use of these products steadily decreases.

Using studies and reports as a guide for the future will help you to set realistic goals for the future, scale back on product categories that are decreasing in necessity and offer products that will grow as technology develops.

Alicia Ellis is the Managing Editor of Office World News and imageSource magazine. Suggestion, comments, and questions can be directed to Alicia at editor@imagingnetwork.com.