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Don’t Buy Your Printer

Tuesday, March 08, 2011   By Mike Reddy

 

Despite surrounding themselves with computers and gadgets, businesses still can’t break their love affair with an ancient technology - paper.

Printing is one of the surprisingly large expense areas in many businesses, often with little oversight as to what is being printed or by whom. Business owners tend to prefer buying the cheapest printers without realising that the price of the unit is not as important as the cost of the ink or toner that it consumes.

Printer manufacturers are aware of the attractiveness of a well-priced printer and have adjusted their business models to follow the classic razor blade model; sell the razor at a discounted price and make the profits on sales of razor blades. This is why there is such fierce competition at the lower end of the printer market, with printers almost given away for free.

Another problem with cheap printers is that they are built to print a smaller number of pages each month. Pushing a printer beyond that recommended average will shorten its life and you will find yourself back in the shop earlier than expected.

The total cost of ownership of a printer over five years includes the printer itself, all ink and all paper, and ongoing maintenance. The total cost of ownership (TCO) is a better judge of the value of a printer. However, it can be difficult or time consuming to discover the TCO of one printer model versus another. Particularly as the price for consumables (ink and paper) can vary depending on where they are purchased.

Office supplies catalogues offer receptionists cheap holidays in return for regular purchases but the prices may not be the most competitive. The local computer shop is also unlikely to be a cheap supplier.

One way to keep check on your printer expenditure is to bundle the printer, paper and ink with one supplier under a contract, known as managed print services. The printer manufacturer or a reseller begins by auditing your printer usage in the office by counting the number of pages and the amount of ink consumed over a week or month. Added to the initial price for the printer, this produces a cost per printed page.

The supplier can then recommend a printer that can print pages at the volume required at the cheapest total cost of ownership. The printer, consumables and maintenance are paid for at a cost per page every month (sometimes called cost per click) which evens out the peaks of paying for paper and ink. It also takes care of supply, as the supplier will usually program the printer to automatically notify by email when it is running low on ink. The replacement ink cartridge should be delivered just as the old one runs dry.

And a printer company can help you assign costs to individuals or departments so you can keep track of where the heavy printers are in your business.


Mike Reddy is a Chartered Accountant, business coach and advisor helping businesses in Sydney, Melbourne, Brisbane and Gold Coast to easily increase their profits and cash flow. He is currently President of the North Sydney Chamber of Commerce, a Regional Councillor for Sydney North East and a member of the Institute of Chartered Accountants Sydney leadership team. As well as advising businesses, Mike presents business development seminars and webinars and is regularly contacted by the media to comment on small business matters. You can connect with him on Facebook, Twitter and Google+.