Oil, gas, and food prices in the last few months have been going up and for the short term at least the question remains, how high will they go? The one thing rising prices have in common is the rising price in oil. With rising oil you have rising transportation and manufacturing prices. The question remains how will this effect cartridge prices for printers?
If you look back at the last time oil and gas shot up like they are now, that summer, prices for cartridge raised on average about 15-20%. The prices that people see today when they buy an HP, Lexmark, or other brand name cartridge are the prices that were an effect of oil prices hitting $140 a barrel. People may ask why, but here are the factors to remember.
- Cartridges are made out of plastic, plastic is made out of oil. And while the brand name companies may lock in their component prices for a while, dramatic increases like we saw can not be avoided.
- Transportation cost rose up. Since there are very few cartridges made in North America (there are a few plants in Mexico), all the cartridges must be transported in from Asia.
- Brand name cartridge companies like HP, Lexmark, Canon and the others are greedy. Remember that the price of oil did drop down, and for a few years was below $70 a barrel, but prices for OEM cartridges did not go down.
So the question remains, what will happen with cartridge prices this year with oil going up? I would be almost willing to bet that if oil stays at current prices or even increases to say $120 a barrel, OEM cartridge prices could see an increase in prices of an average of 10-15%. This means that a HP 56 cartridge that cost $23.99 today could end up costing around $27-28 and an HP 42X toner cartridge could go from $249 up to $260-285. I am sure we will find out by the end of June if the prices are going up or not. To be honest I would be shocked if prices did not go up.
Now as for myself and for O-ink, we almost hope for a price increase from the OEM’s. If they raise prices by say a flat $2-4 per inkjet and $10-25 per laser cartridge, that would mean that our prices would be $1.50-3.50 cheaper for inkjets in addition to the savings we already offer. For lasers it would be around $9-$22 cheaper. The reason I am not saying the 2-4 range or 10-25 range is I would expect our shipping cost to go up.
Please keep in mind, I hate high gas prices. However, the last time this happened, I actually guessed about 5% lower on the price increases that happened. I do hope I am wrong.