Making the Case for Standardized Toner Yields9 Mar, 2004 By: Terrill Klett imageSource
Making the Case for Standardized Toner Yields
Inflation is a fact of life. Though costs of everything are continually
rising, the cost-per-copy we quote daily has not changed in years. Mysteriously,
it seems to be getting even lower. With technological sophistication, dealers
have incurred the rising cost of technicians and costs of employing network
specialists, yet the cost-per-copy ratio has not changed accordingly.
How can this be? Why is it that we continue to operate on a cost-per-copy
ratio of many years past? How does this affect the profitability of this
industry? It used to be that service and supplies were the backbone of the
office products industry. These days it seems to be breaking our backs.
A History Lesson
“Toner fill,” or the amount of toner needed to print or copy on a letter-size
sheet of paper, has been the yardstick of measurement for copy costs for
decades. These tiny black particles can also be referred to as “area coverage”
or “print image area.” One hundred percent would result in a completely black
Toner fill is measured (or calculated for cost) by fill rate percents of four
to six percent, respectively, for facsimile, printers and copiers. Imagine only
a small section of the typical document being black—say four to six percent of
the entire page. While this amount is unrealistic for today’s documents, that is
what we are faced with in our daily CPC quotation to a prospective user.
What is the basis for the copier and facsimile machine’s fill rate
percentages? Years ago, when a typewriter was the mainstay of office equipment,
the average document consisted of approximately 2,000 characters. When copying
the document, a fill percentage would result in about six percent of the page
being filled by toner. Similarly, in 1967, when the U.S. Congress approved the
use of the PSTN (Public Switched Telephone Network) lines for facsimile
machines, most likely the document was a short handwritten note, for which
today’s four (actually 4.1) percent fill guideline would be accurate.
Printers are a different story. “HP set the five percent mark in the
mid-1980s with the introduction of their LaserJet series printers,” says Terry
Wirth, Director of Industry Analysts Inc.’s Technical Services Division and Vice
Chairman of the American Society for Testing and Materials (ASTM) Committee on
Business Imaging Products. “There was no correlation between copiers and faxes.
It was just an original design they thought would be typical for the first text
and graphics-capable marking engines.”
The problem with these fill rates of course, is the fact that a document from
today’s technologically advanced world is far different from those that were
considered when the standards were initially set. The differences in a final
document from yesteryear and today are dramatic. Because of the frequent
printing of Internet pages, PowerPoint presentations, photographs and
spreadsheet programs with charts and graphs, along with a host of other
toner-eating images, toner consumption has sky-rocketed. I’ve inquired
everywhere I’ve gone within the past 90 days as to the average amount of toner
on a typical document today. The collective response averages from eight to
Setting a New Standard
I guess that I was foolish in thinking that the idea of changing to a
cost-per-copy based on a standard of eight percent coverage would be an easy
solution. After researching this issue further, what seemed so simplistic
actually gave me a splitting headache. The responses I received from consultants
were not as encouraging as I hoped. Jeff Smith, President of Pro Buyers (an
office equipment consulting firm) said that this was an “extremely complex
issue” while Lou Slawetsky, President of Industry Analysts Inc., said the
subject was a “pet peeve” of his. To top it off, Wirth simply states that it was
“never going to change!”
According to Smith, it is to the manufacturers’ advantage to low-ball toner
yields. This makes their yields look higher relative to the competition. To make
matters worse, each manufacturer does its own testing and establishes its own
individual standard. There is no independent group in existence to establish
toner yields for the entire industry.
Measuring toner fill has become so complex that even the manufacturers cannot
do it accurately, said Slawetsky. “They may have a number for six percent, but
when you ask for another percent it isn’t simply extrapolated using a
mathematical formula,” he explained. For example, 10,000 copies at six percent
do not simply translate to 5,000 copies at twelve percent, “There are a lot of
variables, such as humidity, paper, dots per inch, image enhancement and the
condition of the equipment that varies the results.” As Slawetsky noted, dots
per inch is among the variables. Did you know that printing at 300 dpi uses more
toner than 600 dpi because of larger dots?
HP justifies the printer’s five percent as an “average” toner yield, partly
because of e-mails that are printed. Slawetsky has tested this theory on a
limited basis and found it to be close to the truth—for printers. However, the
problem for the copier dealer is that people do not run to the copier to make 50
copies of their e-mail. They run to the device to make copies of brochures,
PowerPoint and other toner-eating documents.
Printer resellers do not get the “copier headache” because a lot of their
sales are directed through the small office and home office (SOHO) market. This
market does a lot of low-volume printing and does not even know or care what the
area coverage or CPC is. Meanwhile, copier dealers have an ongoing daily battle
for every tenth of a percent of their margins.
Ironically, the winner of the coverage game thus far has been the end-user,
if they reside under a “cost-per-copy” program. Dealers still quote
cost-per-copy based on manufacturer yields, and that ends up hurting their
financial statements. For example, I’ve seen numerous deals lately with a
cost-per-copy of .008 cents (sorry, that’s segment 3, not 4). Let’s say the
dealer’s cost for service and supplies (including toner) are .005 cents which
leaves a profit of .003 cents. This equates to a somewhat acceptable 37.5
percent profit margin. If toner cost was factored in at .002 cents (using the
manufacturer’s six percent coverage), but the toner fill turned out to be 12
percent, the dealer is stuck with the cost of .004 cents for toner; bringing the
total cost to .007 cents. Now the profit margin has shrunk to 12.5 percent.
Hopefully the equipment is more than reliable because an extra service call or
two will wash away even this modest profit.
Dealers look to the manufacturer to lower toner cost when all fingers should
be pointing to the end-user. The end-user should be charged according to the
documents they copy, print and fax. Cost-per-copy should not be across the
board, but should be considered, then quoted, case-by-case. The dealer needs to
have sample documents (that your manufacturer should be able to provide) that
show the percent of toner on a document. Use this to educate the end-user and
more importantly, figure out a realistic and profitable CPC quote. There is also
software available to measure the amount of toner per page. Finally, make sure
it is stated in your terms and conditions that you can charge for toner over a
ten percent suggested manufacture’s yield.
Slawetsky summed it up pretty well when he said, “Dealers are getting killed.
They don’t know what the coverage is and they end up giving the store away.” My
dream is to never receive another call stating, “The add toner light is on and
I’ve only done 18,575 copies.” Unfortunately, this will probably never be
realized because I’m afraid that quoted percents will not change in my lifetime.
I never thought I would see the day when a penny-a-copy was a bad deal. So much
for the old sales adage, “under promise and over deliver.” Isn’t there something
we could do?
Terrill Klett is the author of Selling Office Products Successfully. (www.sellingofficepro.com).
He can be reached at (630) 513-7571.