I love a good statistic. The numbers have such a way of drawing you in to make you read more, because what good is a stat without a fun fact behind it? This is a great time of the year for stats because the Super Bowl is right around the corner, and it’s impossible to watch football without hearing a couple dozen of them. I also have some Super Bowl stats of my own, for example:
This is the percent chance that I’ll be watching the Super Bowl this year. The percent that I care who wins has yet to be determined. Regardless of who plays, it hasn’t been high since the Chargers’ season officially ended, but I still enjoy watching the game and eating like it’s a holiday.
But the point of this blog is not to talk about Super Bowl stats. The topic served as my inspiration from a timing and format perspective (think of this as a Super Bowl stat sheet), but what I really want to talk about is toner cartridge stats. A recent topic of interest I’ve encountered is the classification of cartridges as either remanufactured (where a new cartridge is produced using an empty cartridge that has been cleaned, parts replaced, and refilled) or new-build, a.k.a. compatible (where a new cartridge is manufactured using all new parts and components; henceforth, any reference to compatible will refer to a new-build compatible). While this would be an important “stat” to have, this type of classification is something we can’t currently provide for the thousands of non-OEM SKUs in the gap intelligence database because it’s really tricky to capture, as the information is not always provided or confusing language is used that makes the distinction unclear.
Despite the confusing language, there are other indicators that can give you a good idea of whether a cartridge is remanufactured or compatible. While external wear or signs of usage on the cartridge itself can be a sign that the product is remanufactured, this is probably not the most accurate method since we’re not in any position to be purchasing thousands of SKUs just to look at the cartridge. This leads me to the next indicator that you can see before purchasing the cartridge: price! Along with price, it’s also important to take into consideration the channel in which the cartridge is selling, as that can have an impact on the final price. This is where the stats come in…
This is the ‘rule of thumb’ percentage that is used as a threshold to help determine whether a cartridge is remanufactured or compatible. According to this guideline, genuinely remanufactured cartridges are typically priced within 30% of the OEM price, while compatibles are often priced lower because they can cost less to produce and/or import. But I wanted to investigate just how good of an indicator this is using a cartridge tracked in our database, the HP CE285A. I chose this particular toner because it has one of the highest number of available non-OEM HP alternatives, as tracked by the gap intelligence online channel of direct ecommerce (online only DMR, think CDW, PCMall, etc.) and retail.com (think staples.com, officedepot.com, etc.) resellers*.
This is the number of non-OEM replacements in the online channel (not including extended yield or MICR) available for HP’s CE285A SKU. Of the 28, I could reasonably classify 18 as remanufactured and six as compatible, while the remaining four were either unclear or did not give any indication.
This is the average discount off the price of the OEM CE285A delivered by the 28 available non-OEM SKUs. HP lists the CE285A for $68.99 and the average price of the 28 non-OEM SKUs is $46.97, resulting in the 32% average discount delivered by a non-OEM cartridge. Bonus stat: 32% is just under the average 41% price discount calculated across all non-OEM HP SKUs tracked in the gap intelligence online channel.
27%, 40%, 42%
These are the respective average price discounts off the OEM for the remanufactured, compatible, and unclassified cartridges. The average price across the 18 remanufactured cartridges came in at $50.38, while the compatible and unclassified captured higher $41.41 and $40 average price points. Based on these percentages, the remanufactured and compatible cartridges seem to be abiding by the 30% rule. This is also when my suspicions began about the unclassified cartridges being compatibles. But as previously mentioned, channel also plays an important part with regard to price.
This is the average price discount off the OEM for non-OEM cartridges available only from Amazon (not surprising since Amazon often carries the lowest prices). The channel with the next highest price discount, again not surprising, was the direct ecom channel at an average of 31%. Coming in with the lowest discount off the OEM were cartridges available only in retail.com or in both online channels (ecom direct and retail.com) at 22% and 21%, respectively. Based on this, it is clear that the channel and reseller can have a significant impact on non-OEM pricing.
35%, 54%, 36%, 43%
These are the discounts off the OEM for the remaining unclassified cartridges from Print-Rite (retail.com), Performance Plus+ (Amazon), Printlogic, and QIP (Direct Ecom). While I don’t know for sure, I would classify all of the uncategorized cartridges as compatible, based on the above findings and considerations for pricing, channel, and resellers.
Of course there are always some exceptions. A couple of the remanufactured cartridges had discounts over 30% and a few of compatible cartridges had discounts under 30%, but most of them could be justified by also taking the channel into account. Ultimately however, the 30% price discount rule seems to be a reasonable way to help determine whether a cartridge is remanufactured or compatible, when used in conjunction with other considerations mentioned above. Like some football stats, at the very least the evidence suggests that it can serve as an indicator of what to expect. If only there was a way to use this to help predict the outcome of the Super Bowl… or is there?
This may or may not be the final score.