OEMs warn about the long-term financial hit associated with third-party consumables.

Saving money is always a top priority in business, but during tough economic times, end users are especially intent on finding any opportunity to save money — even when that means cutting corners on performance and perhaps legalities. One of the most common of such areas in the printing environment involves consumables, where many customers and even some solution providers wonder whether to bypass brand-name color toners and inks in favor of attractively priced knock-offs.

Now, some vendors are saying that their warnings to stick with OEM supplies are important beyond the obvious self-interest vendors have for preserving lucrative consumables revenues. Solution providers that promote authorized color products help their customers produce higher-quality prints with higher-yielding cartridges, vendors say. Beyond this, brand-name color supplies reduce the risk that poor-performing consumables may lead to more hardware failures, which increase expenses and cut into the profit potential of service and maintenance contracts.

Growing Presence

End users have a wide variety of low-cost alternatives to OEM consumables. Some are legal alternatives created when suppliers reverse-engineer original products. Others, known as gray-market products, cross legal lines when brand-name products are sold at a steep discount after being diverted from authorized sales channels. The latter is a growing problem, according to a recent report in CRN magazine that says gray-market products constituted between 5 percent and 30 percent of IT sales last year.

The story quotes Marla Briscoe, brand protection-Americas manager for Hewlett-Packard, as saying, "There's a lot of work for OEMs to do in the space, a lot of opportunity to partner with the channel to really drive down this activity" (see http://www.crn.com/it-channel/208801782).

Long-Term Threats

Even legal third-party products are problematic for solution providers, says Joe Adriano, manager of Xerox Office Group post-sale marketing. Because OEMs develop printing hardware and supplies, the associated testing ensures that the two components will work properly together. "When you buy something that is reverse engineered, it may or may not have [undergone] the necessary research and development, and you could end up with [poor] print quality or even worse — [something that] may damage the equipment in the long run," he says.

A common problem with off-brand toner involves larger and coarser particles that don't fuse as effectively on paper stock as name-brand toner, resulting in jagged output. In addition, the coarse toner may become abrasive to internal printer and multifunction product mechanisms, such as drums and transfer lines. "Over time, the life of the transfer belts will be reduced, and these are meant to be long-life [components], so they are not trivial in cost" to replace, he adds.

The latter is especially important to the growing number of solution providers that seek to expand revenues by promoting multiyear service contracts with each device they sell. "If solution providers are responsible for maintaining the equipment and they are succumbing to the cost pressure of going with a third-party-consumables vendor, they are the ones that are going to take the hit in the end if they have to swap out some key piece of the machinery," Adriano says.