Businesses using counterfeits to save cash

Buyers turn to remanufactured supplies to cut costs

July 30, 2009

Buyers turn to remanufactured supplies to cut costs

Printer OEMs could lose more than $13 billion in the next 12 months as procurement managers and other supply buyers increasingly turn to remanufactured supplies to help them cut costs during the downturn, according to Gartner.

“Because printer supplies produce a higher margin than the product itself, this trend is leading to lower profits for printer OEMs,” said Ken Weilerstein, research vice president at Gartner. “In addition, there is potential for damage to the printer OEMs’ brand because of poor quality and counterfeits. However, OEMs are well-placed to take advantage of the challenges facing the remanufacturers, and the marketing team must play a key part in this. OEMs already have the advantage of understanding the market, their competitors, and buyers’ preferences.”

“Remanufacturers will continue to make inroads into the print supply aftermarket if an OEM competes purely on cost,” said Vishal Tripathi, principal analyst at Gartner. “Therefore, marketing campaigns need to focus on end-user education, highlighting aspects such as environmental friendliness and the importance of third-party certification for yield quality. These OEMs should back this with aggressive marketing that shows strengths while highlighting the quality challenges faced by remanufacturers.”

“Don’t be afraid to play on concerns about counterfeit products and poor print yields,” said Laura McLellan, research vice president at Gartner. “Marketing against lower-cost competitors is never easy or inexpensive, but following these steps can remind corporate supply buyers why they should choose OEM-produced print supplies.”