Consumables on the rise for retailers

Consumables on the rise for retailers

As mass merchant retailers climb aboard the consumables bandwagon (see ARN October 21, 1998, Page 10), smaller dealers could be for-given for believing there is no future for them in the now- commoditised category.

But that is not the case, according to Tim Ingham, the retail channel manager for consumables distributor Daisytek. Ingham explained to ARN last week that the small footprint and good margins on OEM consumables allow them to deliver a good return on investment in a growth market.

Ingham reminded small dealers that inkjet printers have been selling up a storm for the last couple of years and that means there are a lot of consumers out there who are becoming dependent on them for business and pleasure. The consumables category is worth $30 million per year through retail for Daisytek, he said.

"Dealers have to remember there are lots of printers out there," Ingham said.

"When a cartridge runs out, a replacement is usually needed immediately. If small dealers advertise to all the shops around them and have some signage, people will know they can get the cartridge they need.

"These consumables are a commodity and they sell themselves," he added. "The products cost anywhere from $30 to $70, offer a 20-30 per cent margin and take up very little shelf space."

Ingham said that while there are non-original options in the market for inkjet cartridges, consumers often want the original product.

"When consumers take a used cartridge out of a machine, they want to replace it with one that is the same," he said.

"That printer cost them quite a lot and generally they don't mind spending a little more for something they feel assured by.

"The average inkjet printer should turn over about $3000-$4000 worth of consumables through its lifetime."

Ingham suggested that independents don't need to stock hundreds of different consumable products, just the most popular eight to 10 items in the inkjet range. Additionally, because of the convenience factor, they do not have to try and compete on price with the mass merchants.

"To get a return out of consumables, the biggest thing smaller retailers have to do is make sure they stock the right products," Ingham said. "They should just carry the main ones and alert customers they can get any consumable to them within 24 hours where required."

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