A recent NPR story compared the costs of printer ink found that “printer ink is more expensive per unit than some pricy vintage champagnes.” Anyone who has walked out of an office supply store with a $35 cartridge of ink will agree.

But why is that?

The business model of the printer and ink cartridge industry is one with low initial costs but high maintenance costs. A quick search for printers show prices can range from $10 to over $500, with most consumers buying less expensive ones. The only way to sustain this buying model is for companies to charge high prices for the consumables – mainly ink cartridges, toner cartridges, printer paper, photo paper, etc.

And consumers are definitely feeling it. A 2009 Ipsos survey found that 69 percent of respondents said “cheaper ink tops their home-printer wish list.”

HP’s argument: quality for price

HP marketing manager Thom Brown attributed the high price of printer ink to expensive technology. Consumers are basically paying for reliability and image quality, he said in a 2007 computerworld article.

Brown goes on to discuss competition in the ink market, citing an HP-sponsored Qualitylogic study where HP cartridges lasted longer than refilled ink cartridges. However, there was no study on the cost per page, so it is not the most meaningful measure of value.

Too lucrative to change?

Andy Lippman, a Lyra Research senior analyst, proposed that suppliers could cut prices in half and still take in a nice profit on a $30 ink cartridge that costs just three bucks to make. So why don’t they? Consumers are already unhappy with current prices – wouldn’t these companies make more by lowering prices?

The answer may be that HP's Imaging and Printing segment is its most profitable division, earning $29 billion which is three times more than what the company makes on personal computers, reported the same article. Whether that is directly from printer ink cartridges or from something else is unclear.

But let’s pose a hypothetical: An HP Photosmart 7510 e-All-in-One Printer costs $149.99 on their website. Assuming you need to replace all the ink cartridges at least once a year, you’ll have paid the full amount of the printer in ink cartridges in only three years (HP 564XL Combo-pack (Cyan/Magenta/Yellow Ink) for $26.99 and a HP 564XL Black Ink Cartridge for $22.99 = $49.98 per year). And that doesn’t include the price of the HP Photo Ink Cartridge you would want for higher quality photos.

The business model of “give away the razors and sell the blades” has been working well this far, especially with several large brands monopolizing the market - we all definitely know Canon, Dell, HP and Brother. However, things may be changing as consumers have expanded buying power.

Consumers have the power

Ultimately, despite the prices the industry sets, consumers don’t have to buy directly from them. There are many options to be found, such as buying remanufactured and 3rd party cartridges or refill kits for those do-it-yourself types.

Don’t let big companies bully you into buying all their OEM products – the quality of remanufactured and 3rd party cartridges have risen significantly in the past decade, and it is now easier than ever to search for them. Read our article on the differences between the types of cartridges here.

Not only are there more affordable, outside ink cartridges available, Kodak shook up the printer industry several years ago by introducing a line of relatively good, cheap printers and low-cost ink cartridges. Could this be a sign of change or an outlier? Let's hope it's change.