Following recent investigation regarding the idea of refilling of a toner cartridge with a bag of powder toner and a funnel, it seems that the concept has continued to surface over the past several months. Things began with the launch of Ricoh’s SP 100 series of single and multifunction printers in China several months ago. The company introduced the compact, low-cost devices in December, aiming to attract more price-conscious buyers. (It should be noted however, that the device is not being pushed heavily through the consumer retail channel, meaning the device’s primary audience will be business customers). What intrigued me however was the concept of users refilling their own toner cartridge with a bag of toner powder, but seeing as how the device was developed specifically for China and possibly other developing markets, maybe there is a reason that this concept doesn’t exactly make me want to jump on board.
Then, last week, gap intelligence reported that Ricoh’s SP 100 devices were spotted on the U.S. Energy Star equipment list this month. It was highlighted that while the device and its refillable cartridges may not be ideal for the U.S. market, it possibly signals preparations for introducing the device in nearby regions like Latin America.
Being the Brazil market analyst, I started wondering how the refill concept would fare in the Latin American country. While not a new concept, it is still somewhat in its test phase in the low-cost compact printer segment, and was developed partially as a combatant to lower-priced third party supplies, which undercut OEM consumable sales and can potentially damage the printer. However, it seems that this concept just presents new opportunities for third-party vendors, who can jump in and simply make lower-priced, non-OEM refill toner bags, leaving OEMs back where they started. In response, it doesn’t appear that OEMs in these emerging regions are boosting hardware prices to let third party brands win on supplies…at least not significantly, if at all. However, there have been a number of introductions of higher-priced devices hitting the Brazil and China ecommerce channels since the start of the year, possibly signaling a different shift in strategy among manufacturers.
But back to the refill. As part of my research, I ran through some of the pros and cons of the concept and came to several conclusions:
Price – first and foremost, the most appealing part of this concept is inevitably the price of both the device and its consumables. As far as low-cost lasers go in China, the single-function Ricoh device is among only a handful of others from Brother, Fuji Xerox, Lenovo, Panasonic, Pantum, and Samsung in the sub-1,000 yuan ($158) price band (including VAT), making it ideal for price-conscious shoppers. At an average ecommerce price of 95 yuan ($15), or 81 yuan ($13) excluding VAT, the low-priced bag of refill toner is also highly attractive and is one of only about five OEM toner options below 100 yuan ($16) currently available from gap intelligence ecommerce resellers in China.
Environmental benefits – the company indicates that the refillable cartridge conforms to its environmental philosophies: Less packaging (bag vs. new cartridge) equals less waste. I don’t know that this would be a major deciding factor for price-conscious customers, but it’s certainly an added benefit.
Size – as far as laser printers go, Ricoh’s SP 100 series is fairly compact, which can be significantly beneficial in a business environment. At 402mm x 368.5mm x 119mm (15.8in x 14.5 in x 4.7 in), it is rivaled by very few laser devices currently present in the China ecommerce market tracked by gap intelligence.
Increased user interactions/time – consumers will still have to purchase the initial cartridge, which in the case of the SP 100 printers, is rated at 12,000 pages. The toner bags are rated at only 2,000-pages, meaning it will take six refills to reach the original yield of the cartridge, but the bag toner is more than one sixth of the cartridge price. The bag refill thereby negates the cartridge’s high-yield benefits by creating more printer user interactions for a greater price than purchasing a new cartridge. Additionally, by investigating user reviews in China, we have found that while consumers are enticed by the price, in the end, they are disappointed by the added complexity of refilling the cartridge themselves. So while the bag refills offer consumers a lower price up front for a reduced yield, the bag refill will actually cost shoppers more time and money in the long run.
Potential reduced yield – having consumers refill their own cartridge inevitably poses the
problem of accidental spillage. When I picture pouring a bag of toner into a funnel, I can’t help but picture being the person in the office that has to replace the jug on the water cooler. Everyone’s biggest fear is creating Lake Superior on the kitchen floor. Though it would be tough to spill the entire bag of toner, the potential for a little loss is a possibility, and could reduce the overall yield of the cartridge.
Potential health risk – speaking of spilling toner, I don’t think I need to go too far into why interacting with toner powder might be a concern.
The overall advantage of using a refill comes in terms of cost-savings, which in Brazil, remains a primary factor when it comes to purchase decisions. In a market where imported goods are highly taxed, customers are constantly seeking the lowest prices. If the Ricoh products entered Brazil at the current yuan price converted to Brazilian real (270 Brazilian real; $135), the products would remain among the lowest-priced laser printers in the Brazil ecommerce channel, competing with only a handful of mono lasers from HP, Samsung, and Xerox. Based on this, the devices would likely do well if brought to this Latin American market.
However, it will remain to be seen whether there will be a long-term adoption of the lower-priced refills, as they surpass the cost of a replacement cartridge when the yield of the original cartridge is matched. From my experience with the Brazilian market, consumers are looking to minimize cost wherever they can – for example, opting to make monthly payments for a product because it is cheaper upfront, even though the long-term interest accumulation boosts the final purchase price. This could mean that the short term monetary pros of the refill and low hardware cost could outweigh the aforementioned cons. But because the device has only been around for several months, it is difficult to understand what the long-term future of the concept will be and whether it will be embraced on a more global level.