After five months of persistent rumors, Staples announced that it will discontinue the sale of HP-compatible ink and toner cartridges. Months of relentless inquiries by Lyra finally resulted in a January 29 e-mail response from a Staples spokesperson who confirmed the rumors. According to the spokesperson, the reason for Staples’ decision was that “Hewlett-Packard continues to rapidly advance its technology in printing systems and ink and toner, [and] this decision offers the best solution to customers and allows Staples to focus its resources on the many other product categories where we can innovate with Staples-brand products.” Lyra Research will host a live Webcast called “OEMs Score Big at Staples in the Great Battle for the Printer Aftermarket” on Thursday, February 15, at 2 p.m. eastern standard time (7 p.m. or 19:00 UTC).
According to Charles Brewer, managing editor of Lyra’s Hard Copy Supplies Journal, which first covered this story, it is very likely that HP made Staples the proverbial deal it could not refuse. “What would motivate Staples to walk away from the fatter margins afforded by selling compatibles?” Brewer asks. “According to several industry insiders, Staples’ margin on HP-compatible ink was around 50 percent, and its margin on new compatible toner cartridges was 35 percent. We have reason to believe that its margin on remanufactured toner cartridges was closer to 40 percent. In contrast, the office superstore’s margin on genuine HP cartridges averaged between 25 and 30 points.”
When Staples published its January 2007 catalog, not only were Staples-brand HP ink and toner missing from the catalog—Staples-brand Epson-compatible ink cartridges were also conspicuously absent, although the catalog offered store-brand cartridges for Canon, Dell, and Lexmark machines. Staples provided no explanation for the absence of Epson compatibles, but the move may have more to do with Epson’s lawsuit against Armor Group (Staples’ vendor for the store-brand cartridges) and less to do with any agreement between Epson and Staples. By early February, Staples had pulled all HP-compatible cartridges from the shelves of its stores and eliminated them from its Web site. Epson-compatible cartridges were still available in stores and online, but certain SKUs were out of stock at some stores.
Lyra will publish a report analyzing these dramatic events in cartridge OEM and retailer relationships to coincide with the Webcast. The report, also titled OEMs Score Big at Staples in the Great Battle for the Printer Aftermarket, contains more in-depth information than will be available in the Webcast. The report will sell for $995, and live We