Despite a significant rise in the number of manufacturers offering third-party ink, unbranded vendors are finding it tough to increase market share.
GfK market analyst, Neville Ray, estimated their share of the local market at 14 per cent in 2005. He said that number excluded supermarket sales. It had been static in the first quarter of this year.
Third-party inks are cheaper and offer significantly larger margins. But Phoenix Toner boss, Don Bentley, suggested an explosion in manufacturers had created confusion among resellers and end users. Where there had previously been about 10 non-branded options, he estimated that number had swelled to in excess of 50.
"Consumers aren't sure what to buy anymore so I feel there has been a drift back to OEM products," he said.
Although it has more than 100 vendors in its stable, Ingram Micro has no room on its shelves for third-party ink.
"The impact on the OEM market from compatible ink is less than it used to be," the distributor's printing and supplies business manager, Russell Box, said. "OEMs have reduced prices to compete."
Bentley also pointed to variable yield as a recent strategy to fend off the third-party assault. At a recent HP meeting, the vendor had announced SKUs would grow from about 60 to 300 with low, medium and high yield products.
Phoenix was regularly approached by compatible ink vendors offering cartridges for as little as $3, Bentley said. In comparison, branded versions could cost almost ten times as much. Despite this, 99 per cent of its distribution business was OEM.
Pelikan Quartet sells German third-party ink through BigW and Woolworths.
Product manager, Adam Singles, said it was a common misconception in the industry that lower prices necessarily meant reduced quality. But he said it was hard to snatch market share when branded vendors spent so much time and money advising end users to buy their consumables.
Despite third-party manufacturers struggling to improve their position, branded vendors remain aggressive and have devised various strategies to retain their dominance.
Epson Australia director of marketing communications, Mike Pleasants, went as far as to claim its printer drivers regarded third-party products as "alien substances with unknown characteristics".
The vendor was about to launch a revamped paper range and would also reduce reseller pricing on its starter packs to boost margins, he said.
HP supply sales and marketing manager, Leo Lynch, said there would always be a market for people who only bought on price. But he was adamant it could win them back with its total value proposition.
Canon product manager for ink printing, KC Lu, said customers were free to choose whatever ink they wanted to use in its printers but issued a warning to the market.
"There is always a risk in using third-party ink - particularly when print-head technology has advanced a lot in recent years," he said.