The home printing racket

John's been ruminating about the home printing racket, after reading a piece in the New York Times.

"It does not take an advanced business degree for those consumers to see how printer manufacturers like Hewlett-Packard and Canon make their money. They use the "razor blade" business model. It is named from the marketing innovation of King C. Gillette, who in the early years of the last century sold razors for a low price but made all his money on the high-margin disposable razor blades. Printer manufacturers also use this tied-product strategy.

Printers return relatively low profit margins. But the ink, ounce for ounce, is four times the cost of Krug Clos du Mesnil Champagne, which sells for around $425 a bottle. Ink is about the same price as Joy perfume, considered to be one of the more pricey fragrances, at $158 for a 2.5-ounce bottle."