Ostriches: Pull Your Head Out

Ostrich pull your head out rtmworld“Some of us are busy and some of us are busy complaining.” This quote from Debasish Mridha aptly sums up the state of the consumables industry at this point in time.

Valid complaints are all well and good, a distraction from the main business of the day perhaps, but when valid, complaining in the correct way can achieve results that produce a benefit. If an OEM genuinely believes that its Intellectual Property Rights are being infringed then making formal complaints, suing the suspected offender, does often lead to a settlement that rights the wrongs.

All too often, however, threats and lawsuits are driven by an emotional red mist in front of the offended party’s eyes. No matter the truth, the facts or indeed how little evidence was accumulated, such blind rage demands action.

Strike first and ask questions later.

It is a common tactic seen as delivering only an upside. The damage is already done against the accused as soon as the first publication sniffs out the juicy morsel and plasters it across their “breaking online news” column. Customers become fearful and wander off to find other, lower profile suppliers. Of course, that is why the tactic works and is favored by OEMs particularly with chip complaints. Eventually, technical expert opinions take precedence, the red mist evaporates, logic and common sense prevail, and in many cases, the OEM looks for a deal to walk back without getting a public red face. It’s called a “voluntary dismissal”.

Now, we have all sorts of groups using similar tactics. That red mist is everywhere. It is caused by fear: fear of changes that are happening in our industry and its knock-on effect to the traditional way of business. Runaway and hope “China” does not affect your business or run towards “China” and see what it can do for you. I recommend the latter. But a third option taken by many would be to bury your head in the sand like an ostrich. The ostrich approach is simple enough. Find other ostriches, group together and complain as loudly as possible, without all the facts or worse, knowingly create fake news.

“Remanufacturing is the only option for the future. Everything from China is bad quality, cheap and infringing.” “Chinese manufacturers use toxic materials. Chinese manufacturers all fail DecaBDE safe EU levels.” These chants are on the basis that if one is doing it, then they are all doing the same. What nonsense!

The ostriches flock together, red mist in front of the entire herd and because it suits their argument, they band ALL Chinese firms together and label them ALL as bad, toxic producing, low quality, IP infringers who do not comply to EU or USA rules.

If they argued “a few Chinese manufacturers are world class, high-quality producers who have their own Intellectual Property portfolios and have invested mega millions for many years into IP and are good companies, BUT all the rest are scumbags” their complaints would fall on deaf ears.

One US publisher knows no bounds and is completely anti-China since the propaganda supports the ostrich herd. Actually, it weakens their arguments even more.

I understand the red mist, losing sales and cartridge volumes to online stores fed by Chinese NBC manufacturers who disregard IP and sell only on the lowest price strategy. It’s bad for everyone. The OEMs need to make the formal complaints and sue them if they have cause to do so. The nonsensical white papers, articles and speeches churned out by the ostrich herd continue to tar and feather all Chinese manufacturers alike. Their transparent propaganda and invalid complaints try to render all new-built cartridges as being illegitimate. It is a false, weak argument, yet it will never stop the legitimate Chinese manufacturers.

As Shakespeare put it, “the lady doth protest too much, methinks.”

Ostriches, lift your heads and see what is really going on. Patent Safe Compatibles (PSC’s) are legitimate, have better quality and provide greater profits!

Desperate Times Give Way to Lies and Fake News

Potentially, the cheaper, non-infringing new built compatible cartridges could see the Aftermarket double its market share within 5 years. Hear what Steve Weedon has to say.

 

Nothing irritates me more than carefully prepared propaganda that is designed specifically to misinform and misrepresent industry information for the purpose of benefiting those who have their own agendas. It’s transparent of course to those “in-the-know” and potentially influential to those that are not, but seeking to learn.

There is a lot of nonsense written and said about our industry by those who try and prosper from the falsehoods they propagate.

Let’s take one claim that is repeated time and time again, as a blatant example. “Every cartridge coming out of China is a clone, and patent infringing.” Sound familiar?

Some media and some western remanufacturing companies attempt to influence every cartridge reseller, dealer or wholesaler that it is true. Why? Because they fear losing business to Chinese imported products and they use the “everything from China is a patent infringing clone” defense to fight it.

Such blanket statements are simply untrue. They are fake news. The truth about imaging products exported from China to the West does not help their cause, so it is hoped scaremongering and creating false impressions will urge customers to remain loyal and keep prices stable.

Let’s clear this off the table once and for all. To say every imaging cartridge imported from China is a clone and patent infringing is a lie. Some world-class companies within our industry have made huge investments to build unique patent portfolios and have successfully designed and produced alternative new-built imaging cartridges that are a legitimate work-around alternative to an OEM original product. They are not clones, nor are they patent infringing.

However many of these new-built cartridges have a winning edge that seriously worries the competition, and rightly so. By virtue they are not remanufactured means they do not have a high empty cartridge cost in the bill of materials as do remanufactured cartridges. They do possess a consistently high quality and a lower price point than remanufactured products, and are also “patent safe” in that they do not infringe the OEM patents.

Of course not all compatible cartridges coming out of China are like this.  It is probable that most Chinese companies attempting to export imaging cartridges into the US and European markets are infringing and are a “copycat” of the OEM. Such companies should be exposed and sued by the patent holder. Hopefully they will be. But it does not give license to create a false impression that everything from China is bad.

The term “clone “is like a returning bad penny that you never seem to get rid of. The term should be reserved for a new built cartridge that is an exact replica of the OEM in all respects. It follows, therefore, that if a new built cartridge is not an exact replica of the original OEM, it is not a clone. An Aftermarket toner is not a “clone” toners, as often reported, since many differences are evident in the formulations, which for the most part are “secret recipes” rather than patented formulations. Patents that exist in the toner area are more to do with how it is manufactured than the finished toner powder itself. When looking at toner powder, how can you tell if it was manufactured in a way that infringed someone’s patent?

Fake news is probably here to stay. When the facts don’t suit the argument, sell fake news. It’s like telling lies convincingly: some will be fooled some of the time, but not everyone will be fooled all the time.

There are now three choices and each is here to stay. 1. OEM genuine originals; 2. Remanufactured; and 3. New built non-infringing compatibles. The pros and cons of each will win or lose customers. However, the facts will prevail, not the fake news.

Potentially, the cheaper, non-infringing New built compatible cartridges could see the Aftermarket double its market share within 5 years. That volume increase will come from the OEM’s share and from those mainstream remanufacturers who do not transition. Both the OEMs and Remanufacturers are seriously worried and some with are desperately creating a false picture.

As Ronald Reagan said, “Trust but verify.”

Where’s the Peanuts?

pretzels plane service rtmworldI thought it was a simple question when talking with the American Airlines flight attendant. “We do pretzels now,” came the sharp response, as she slapped down the small packet on my lap tray together with a napkin. She moved on to the row behind me. Soon to follow was the attendant offering beverages. I waited my turn, rehearsed what I was going to say when asked: “What beverage can I get you?”

“A red wine please,” I responded. “That will be US$8. Do you want cab or merlot?” I didn’t hear the question since her voice trailed off after the word “want” as she looked away in the other direction towards the passengers across the aisle. “CAB OR MERLOT,” she snapped back when not hearing a response. “Cab, Cab please, I spluttered” and I offered her eight bucks, a US$5 note and three ones. “No Cash! No cash! Only card,” she insisted with a raised voice. She looked around eyeing immediate passengers sitting within earshot. It was a warning for no one else to screw up. I handed over my credit card. She swiped it. I got no receipt and no “thank you” before she waddled off down the aisle. Only another nine hours and 40 minutes to go. GREAT.

I dozed off: one of the good side effects from a glass of red wine when travelling. I felt a tap on my shoulder as I shifted into a less cramped position. Opening my eyes fully I see the head flight attendant kneeling down to make eye contact. She is holding a clipboard with a printout out of passenger names. “Hello. Mr Weedon isn’t it? I am Kathy, head flight attendant on this flight. I see you are a three million miler with American Airline Platinum and I see you are sitting in coach class. I have an empty seat in first class and thought you might be more comfortable up there.” I looked at her in disbelief. Was I dreaming? “Really?” I asked. “Absolutely,” came the response, “Let me help you with your overhead bag.” Without protest, I got up and followed her to the first class section.

I could sense the dagger-like looks striking me in the back as I walked away knowing “they” were all looking and thinking, “he’s the idiot that screwed up.”

“Here, let’s put your bag here, and you take this seat, give me a minute and I will send an attendant to see what we can get for you”.

“My goodness. This is the way it’s meant to be,” I thought. I got comfortable. “Hello Mr Weedon, can I get you something to
eat and a beverage to drink?” said a highly attractive attendant. She handed me a menu. “A glass of red wine please,” I said.

“We have an award-winning Cabernet from Napa Valley or a French Margaux.”

“Oh I’ll take the Margaux, thank you.” She bought me a glass and poured from the bottle, showing me the label first. “OK, I will prepare your meal and be back in about ten minutes,” she added. I sat back and enjoyed my FREE Margaux smiling like a Cheshire cat that licked the cream. Some minutes later my meal arrived on a tray all laid out like a fancy restaurant. A small flower, metal tableware, white linen tablecloth and napkin. Perfect. Seeing my empty glass, the attendant dutifully filled it up again without even asking. The next eight and a half hours went by quickly.

flight service rtmworldCustomer service is how you retain customers. Loyalty programs work— although the rewards for loyalty in the airline industry are becoming less and less. Small customers need looking after as much as big ones. I was lucky on this flight. Most of the time I grin and bear the cattle class service and keep the travel budget in check. But I did enjoy the special treatment.

On one of the frequent trips the attendant made to see if I was ok, I asked, “So why don’t you serve peanuts any more?”

“Too many people have nut allergies,“ she said. “Don’t you like pretzels?”

“I hate pretzels!”

Is there a future for Remanufacturing?

Steve Weedon discusses if there is a future for remanufacturing? He suggests that customers may buy on price but they come back because of quality.

 

This is a serious question and one I often get asked. The fact, that so many question “if” the cartridge remanufacturing industry has a future, speaks volumes and gives automatic cause for concern.

Over recent years several key events and decisions have shaped our industry landscape to land us at this point-in-time, exactly where we are today. There is little question about the fact that cartridge remanufacturers are somewhere on the path towards buying new built compatibles for resale. At the end of that journey, remanufacturing, as we have known it, will be dead.

The demand for imaging consumables will not go away any time soon, for sure. A paperless society will not happen, paper is too interwoven into the fabric of our societies for it to disappear, and there are no new technologies that will replace copiers or printers that make as much money for the OEM’s like copiers and printers do.

Yes, I accept some business run paperless, but the world is a long way off from being paperless. It may never happen at all. Printed documents give comfort and security. And you don’t need a power source to read them.

For the purposes of answering this serious question, it becomes necessary to remove the misleading rhetoric, purported by some, that is just plain wrong. Not every cartridge coming out of China is a “clone”, is “patent-infringing” or “counterfeit”. In fact, most are non-infringing and are consistently high quality alternatives to the original OEM. Not a “clone” which is defined as an exact replica, but new design alternatives to the OEM.  If a new build cartridge can be redesigned to ensure non-infringement of patents held by any patentee, then that cartridge becomes a legitimate product to buy and resell and use. That is a fact.

Over the years the manipulative control of empty cartridge prices and also their availability by brokers who sold out to Clover, forced Chinese remanufacturers to rethink their business strategy. Print-Rite is a good example of a company that invested wisely to fully understand the OEM patents and focus on new designs that work a-round the OEM and other patents to become legitimate products. Now they hold 2,700 patents of their own.

For many remanufacturers, the decision to switch from remanufacturing to reselling a new build cartridge is an easy one. New builds are much more consistent in quality since everything is new and matched. The product is cheaper than a remanufactured product, which of course has variable quality.

Does it answer all the questions about being good for the ecology of the planet? NO.

Customers buy on price but they come back because of quality.

I do have sympathies for the environmentalists who are hell-bent on saving the planet. I get it, but the sale is made because of the price. The customer keeps coming back because of the quality.

It’s a paradigm shift but it’s a one-way street unless Mr. Trump includes these products in his China trade war. If that happens and import prices go up, it could be a shot in the arm for remanufacturing in the United States. Remember, thanks to Impression Products’ Eric Smith, the Supreme Court of the United States says empty cartridges imported from anywhere are eligible for remanufacturing in USA.

Remanufacturing is already in decline, which is why this question is so often asked. Non-infringing, new built cartridges are better and cheaper which means the distributor makes more money.

Unless import sanctions force prices to go up, I believe it is inevitable that we will see a further decline in remanufacturing in the US as we are now seeing elsewhere. Once the Europeans become comfortable with the strong patent position of new build cartridges, they will also turn to what makes them more money. OEMs already know what threatens their market share the most. They are seriously worried!

Girls, Girls, Girls.

There is nothing a girl, I should say woman, cannot do. Seriously.  It’s true. And of course, the mantra is same for boys who turn into men. We sit them down for a serious chat about the future and whether boy or girl, young woman or young man, we all preach that with hard work, determination and lots of effort they can achieve, well, anything.

It’s kind of funny that only recently I sat my soon to be 15-year-old down for the serious chat. “You can do anything, and now is the time to start thinking seriously about what you want to do, line up the subject courses and the colleges or universities that will get you the qualifications you need,” I said.  Of course, it is like talking to a brick wall.  He has no idea what he wants to do. Xbox, Xbox, Xbox is what consumes all his free time.  Is there a fortune to be made for being an Xbox addict? I wonder.

Telling girls they can do anything is the right thing to say, of course.  Although not always has it been acceptable to give the girls the credit for what they can do and for what they actually achieve.

Take Ada Lovelace, for example. Ada was the daughter of Lord Byron. She was a genius mathematician, who wrote instructions on how to build a computer 100 years before the first computer was ever built. In 1840, Ada’s mentor Charles Babbage asked her to translate an article about a device he was creating called an “analytical engine,’ a prototype computer. Ada Lovelace went above and beyond her task by adding detailed notes to improve the article suggesting code should be written to program the “computer.” She published her ideas in 1843, but received no credit at all until the 1950s. It seems the computer could have been invented a lot earlier if someone had listened to Ada.

All men should be grateful to Josephine Cochrane. Why, you ask?  She invented the dishwasher in 1893. It was hand-cranked until Kitchen Aid picked it up, modernized it and put it into millions of households worldwide. Think of all those arguments she prevented:“Its your turn.”

“No it’s not.”

“Yes, it is your turn to do the dishes.”

Now we just fight about whose turn it is to load the dishes into the dishwasher.

In 1903, Mary Anderson, invented windshield wipers, while on a bus with no windscreen for the driver, on a freezing cold day. What about Bette Nesmith Graham, ever heard of her? She invented White Out (Liquid Paper).

Patsy O’Connel Sherman dropped chemicals in her lab at 3M, splashed her shoes and invented Scotchgard. What about Victoria Woodhull? She was the first woman US Presidential candidate in, wait for it, 1872. Finally, what about Maud Wager? It seems she was the first female celebrated tattoo artist in the U.S. in 1911. No I had never heard of her either, but it proves a point that women have always been able to do anything they have wanted to do.

In our industry, you do not need to look that far back to see the list of powerful women who one way or another made their marks.

Anne Mulcahy became CEO Xerox in 2000, with talk of bankruptcy in the air and US$18 Billion of debt. With determination and persistence and belief in the Xerox culture, she succeeded in paying off the company’s entire debt. In 2010, Mulcahy handed over Xerox to Ursula Burns, who carried on the program to return Xerox to a viable and profitable business. Burns was the first black woman to lead a fortune 500 company and was also once named as the 22nd most powerful woman in the world.

Carly Fiorina, ex CEO of HP, Ginny Romelty CEO of IBM, Margaret (Meg) Cushing Whiteman,  ex CEO of HP are among thousands of business woman who have taken the flack, and the credit when due, in their tenures as leaders of OEMs in our industry.

The old saying “you can’t keep a good man down” well and truly, equally applies to the fairer sex.

Another one bites the dust

Another one bites the dust, rtmworld,steveAnother one bites the dust… Yes—another year has gone and we look back and regret that we did not make more of it. Time relentlessly marches on and waits for no man, yet we all squander our time thinking it will never run out. Sadly, for some, time did run out in 2018. Rest in Peace John Wyhof and Mark Flesher.

2018 must go down as the worst year on record for profitability since the inception of the Aftermarket. Yet, as we end the year and review our achievements and missed opportunities, we will see a new year approaching and we will become positive and enthusiastic about what 2019 will bring.  It’s the reason the New Year follows the end of an old year. It is in our nature to optimistically welcome in the New Year and hope for a better future than the past.

Another one bites the dust… Yes—many companies bit the dust in 2018, Greenrich, HanP and OCP among them. Jobs lost, probably for good, families unsettled, and uncertainty looms large for those teetering on the edge. Where did all the remanufacturers go? They went from being several thousand to a few hundred in the space of a few years. To point the finger and find someone to blame is probably also part of our nature but of course it would change nothing. It’s the result of market change that this magazine has been warning you about for years. Now the industry has changed and many companies did not make it through 2018. Unfortunately it is inevitable that many will not make it through 2019.

Another one bites the dust… Yes—RemaxWorld Expo 2018 is over for another year and another industry summit is behind us. The key focus was a debate over Remanufactured vs New-Built Cartridges (NBCs): what should be the preferred choice for the aftermarket? The debate was robust enough, calling on industry experts, and myself, to articulate their views in their allotted 6 minutes. Save the oceans from plastic waste, hug trees and be eco-friendly. “Be safe,” the lawyers said, “and remanufacture.” They missed the point entirely.

The truth is remanufacturers continue to disappear because they cannot compete. Empty cartridge availability is manipulated and prices inflated to create an advantage for the biggest remanufacturer who happens to be the biggest empty cartridge collector/reseller. “All NBCs from China are infringing, poor quality and high risk for litigation,” they say. “Only buy remanufactured products,” they add. It’s pure scaremongering propaganda— false, fake and misleading to say the least. The truth is you can buy a whole range of NBCs that are not patent-infringing, better in quality than remans, and cheaper than the cost of a remanufactured product. It’s true only a few Chinese-based companies making NBCs have made the huge investments needed to be able to legally stand behind their NBCs. It is not the result of a five-minute effort. Some have taken up to 18 years to reach the point where they can provide cartridge resellers with a competitive, “patent-safe”, new-built product that will increase profitability in their North American and European markets.

Another one bites the dust… Yes—those of us in the US hope the New Year will see an end to the gun violence in our schools and on our streets. Dimitrios Pagourtis reportedly sang, “Another one bites the dust” as he mowed down eight students and two teachers in Santé Fe. Stephen Paddock is another name etched into my brain for all the wrong reasons. At ITEX Las Vegas this year, I found myself straining my neck as I peered out of the taxi to glimpse at the gold-tinted window on the 32nd floor of the Mandalay Bay Hotel from where he shot and killed 59, wounding hundreds more.

Yet, in many ways Las Vegas is where the Aftermarket all started, with Recharger Magazine. Humble beginnings, with plenty of optimism.

Let’s have another go in 2019.

Once Upon a Time

Concept of fast business with running businessman

Once upon a time, shopping was not allowed on Sundays in the UK, save for a few perishables like bread, eggs and milk. Stores closed up Saturday night and the owners rested until Monday. It was inconvenient but rules are rules and you lived with it. Pubs closed earlier on Sundays under some premise that you had too much Saturday and you have to go to work on Monday. It was a very different era, and most accepted it for decades without rancor.

Now, of course, its “buy, buy, buy”, morning, noon and night. You can go online and purchase almost anything from your armchair and have it delivered the next day.

The corner shop that used to sell almost everything has all but gone, making way for express grocery chains that take your order online and have it waiting for collection or for free delivery.

Pregnant and unmarried girls used to be carted off so society did not have to face the shame with them, with many returning alone with stories of staying with aunts and uncles, while secretly getting adoptions or abortions. Life then carried on much the same.

Times change of course and rightly so. None would want to be cave dweller. However, with change come winners and losers. The candle stick maker, the milkman and yes the corner shopkeepers in their aprons and caps were losers. Early adopters of the new ways became winners having taken the gamble and pressed us to enter the 20th century.

Nothing stays the same in our 21st century modern world either. If you are not an early adopter then you are destined to become a dinosaur in denial. Get this app, download that app, read this tweet and share this tweet.

Getting stuck in the past and not embracing the change meant lost opportunities and high risk. The clued-in ones enthusiastically jumped aboard, having got their feet wet, or their toes burnt, ready to move forward.

The trouble is, the new world age gets reinvented almost each day. What was “ok” yesterday is not “ok” today. If you have plenty of cash in your pocket, for example, have you not heard about the cashless society?

In the dark ages after the collapse of the Roman Empire, and before the Renaissance, most in Europe thought the world was flat. They didn’t seem to care much about it so long as they didn’t stray too close to the edge and fall off. Yet Ptolemy wrote a book called Geography at the height of the Roman Empire, 1300 years before Columbus set sail explaining in graphic detail that the world was in fact round. Yet it wasn’t accepted by the masses, and the entrepreneurial travel agents of the day failed to capitalize on round-the-world trips.

Yes. Change is all around us. Our industry has changed too—not “changing” as it used to be said. Early adopters have made good, or burnt their toes. For those that remain and who fail to spot what has changed: time, I fear is running out.

If what you are doing makes you a small fortune and you are fat and happy, you do not need to do anything. You can carry on regardless.

If, like the vast majority, you are not fat and happy and not making the profits you need or want, you must change NOW. Immediately do something different before it consumes you and it’s too late.

End users are end users and they will not go away. However, resellers, dealers, MPS providers, distributors, VAR’s, BTA channel members, cartridge remanufacturers, NBC makers and OEMs better adapt to the channel changes fast or get left behind.

Clones, Compatibles, Counterfeits and You

We live in a world that is increasing fake. Fake products, fake news and fake people. Fake, is big business the world over. According to the OECD (Organization for Economic Co-operation and Development) imported “fake” products are valued at almost half-a-trillion dollars (US), with China being the biggest producer.

 

There was a time when tourists could simply amble through any Chinese market and spot “fake“ bargains at every turn: Louis Vuitton handbags, Rolex watches and Gucci sunglasses galore. But China is cleaning up and most of these markets are not as brazen with their fakes. A brisk walk down Hong Kong’s Nathan Road from the historic and you will be accosted numerous times to readily escort you to lock-up warehouses full of fake stuff: cheap fakes, good fakes and expensive fakes that look like the real thing. All the gold bits are wrapped up in tissue and plastic authentication cards look genuine.

It may seem like a harmless purchase that usually has one of two outcomes. Your wife will either offer herself to you for a whole week for buying her the Louis Vuitton she has always wanted (treating it as a new family heirloom to be passed on, locked away for use only on special occasions, and hidden thoughtfully and carefully from any burglar who sees her with it). Or, you will find out your wife is really Hercule Poirot and will tell it is a fake from the instant she unwraps it. In which case learn to tap dance quickly and say it was just a joke, it only cost $20 and she should give it to her best friend for her birthday. If you got the result you wanted, then enjoy the benefits it will bring you for a week and try not to worry about what happens when she decides sends it to Louis Vuitton to repair the zip that has malfunctioned.

It is one thing to know you are buying a fake for a bit of fun and another thing importing a container load to sell to unsuspecting consumers as originals. Every consumer gets hurt. Even Chinese consumers don’t like it. Take wine for example. Over the last decade China has become the world’s largest market for French Bordeaux fine wine. Counterfeiters wasted no time to make fake labels and exploit the opportunity. Many consumers have become seriously ill drinking the bottle contents. Now smart label and smart corks are battling the growing trade and Chinese consumers are demanding more action on the counterfeiters.

It is no wonder the consumer gets confused as do some armchair industry commentators. A “clone” is a new cartridge built to mimic the original in most, if not every, detail. Depending on where it is sold it can infringe trademark or intellectual patents owned by the OEM. If sold as an OEM it becomes a criminal offense and a counterfeit. In areas of the world where the OEM patent has not been registered the “clone” becomes a legitimate product when sold as an aftermarket product. If sold as an OEM original it remains being a criminal offence. “Compatibles” are new-builds designed to circumvent patent claims of the OEM. Now, non-infringing compatible cartridges are legitimately available and an alternative to remanufactured products with the advantage of the elimination of the empty collections costs that some have tried to control and manipulate before.

Even remanufactured products are subject to patent infringement concerns and numerous lawsuits. Recycling for reuse as the best form of recycling holds true. However, costs increase and consumers are always looking for cheaper solutions.

The bottom line is simple. You must only sell what legitimately can be sold in your region. Counterfeit imaging products are bad news and a criminal offense everywhere. Technology marches forward and more counterfeiters are being caught and doing jail time. Don’t be one of them!

We live in a world that is increasing fake. Fake products, fake news and fake people. Fake, is big business the world over. According to the OECD (Organization for Economic Co-operation and Development) imported “fake” products are valued at almost half-a-trillion dollars (US), with China being the biggest producer.

There was a time when tourists could simply amble through any Chinese market and spot “fake“ bargains at every turn: Louis Vuitton handbags, Rolex watches and Gucci sunglasses galore. But China is cleaning up and most of these markets are not as brazen with their fakes. A brisk walk down Hong Kong’s Nathan Road from the historic and you will be accosted numerous times to readily escort you to lock-up warehouses full of fake stuff: cheap fakes, good fakes and expensive fakes that look like the real thing. All the gold bits are wrapped up in tissue and plastic authentication cards look genuine.

It may seem like a harmless purchase that usually has one of two outcomes. Your wife will either offer herself to you for a whole week for buying her the Louis Vuitton she has always wanted (treating it as a new family heirloom to be passed on, locked away for use only on special occasions, and hidden thoughtfully and carefully from any burglar who sees her with it). Or, you will find out your wife is really Hercule Poirot and will tell it is a fake from the instant she unwraps it. In which case learn to tap dance quickly and say it was just a joke, it only cost $20 and she should give it to her best friend for her birthday. If you got the result you wanted, then enjoy the benefits it will bring you for a week and try not to worry about what happens when she decides sends it to Louis Vuitton to repair the zip that has malfunctioned.

It is one thing to know you are buying a fake for a bit of fun and another thing importing a container load to sell to unsuspecting consumers as originals. Every consumer gets hurt. Even Chinese consumers don’t like it. Take wine for example. Over the last decade China has become the world’s largest market for French Bordeaux fine wine. Counterfeiters wasted no time to make fake labels and exploit the opportunity. Many consumers have become seriously ill drinking the bottle contents. Now smart label and smart corks are battling the growing trade and Chinese consumers are demanding more action on the counterfeiters.

It is no wonder the consumer gets confused as do some armchair industry commentators. A “clone” is a new cartridge built to mimic the original in most, if not every, detail. Depending on where it is sold it can infringe trademark or intellectual patents owned by the OEM. If sold as an OEM it becomes a criminal offense and a counterfeit. In areas of the world where the OEM patent has not been registered the “clone” becomes a legitimate product when sold as an aftermarket product. If sold as an OEM original it remains being a criminal offence. “Compatibles” are new-builds designed to circumvent patent claims of the OEM. Now, non-infringing compatible cartridges are legitimately available and an alternative to remanufactured products with the advantage of the elimination of the empty collections costs that some have tried to control and manipulate before.

Even remanufactured products are subject to patent infringement concerns and numerous lawsuits. Recycling for reuse as the best form of recycling holds true. However, costs increase and consumers are always looking for cheaper solutions.

The bottom line is simple. You must only sell what legitimately can be sold in your region. Counterfeit imaging products are bad news and a criminal offense everywhere. Technology marches forward and more counterfeiters are being caught and doing jail time. Don’t be one of them!

It’s Often True… But Not Always True

We keep talking in these pages about the change that is taking place in the industry. Since 2015 the pace of change has been faster than our ability to keep up with the news. HP just decided to buy the UK firm, Apogee. Xerox has a whole new direction led by its major shareholders who have now taken control of the iconic company. Staples has new owners in the US. Where have all the remanufacturers gone? Trumps tariffs don’t seem to have had much affect so far. And Clover’s white paper tells us more about the company’s worries and concerns than it does about the paradigm shift from remanufactured products to new-built, patent-safe products.

Parts and supplies vendors for ink, laser and copier remanufacturing are having a tough time. Prices have reached an all-time low, volumes are reduced and vendors are going out of business. It was a shame to see OCP GmbH file for bankruptcy in Germany recently. The fate of this highly regarded ink development innovator with good quality products and prior art, is symptomatic of a changing market place.

0 Acquisition interest is high for buyers looking for ways to expand or improve manufactured products, particularly from China, where costs of manufacturing are going up. Interest is also high from sellers looking for exit or survival strategies, who find the volumes dwindling as local prices collapse and orders head south.

It is not because the overall volume of demand for consumable products is going down. In fact the opposite is true: globally, it’s going up. But, there is a seismic shift away from remanufacturing and remanufactured products towards new built cartridges. Most new built cartridges come from China, which is where the volume is. It’s interesting to note Russia is now also getting in on the act. It is true, most new built cartridges that are exported from China are sold to areas where the OEMs, for their own reasons, have not registered patents. This makes these cartridges legitimate products.

It is also true some players import these same cartridges into Europe and North America, amongst other places, where the OEMs, of course, have registered their patents. Many, if not most of these products could be infringing those patents. So buyer, beware.

It is not true however that all new built products from China are copy cat “clones”, are patent infringing and are hugely risky. This is a total misconception created by the few. Why? They simply have no answer to the competition that such legitimate, new built cartridges create. They are non-infringing, consistent in quality, and contain no core- empty cartridge price in the bill of materials (BOM). This change has been taking place in our industry since 2015 and has not been good for those who did not see it coming.

The truth is the Aftermarket will significantly grow its market share, way beyond the 20-25% it claims now on the foundation of legitimate, new built, cartridge products. That worries the OEMs and it worries those companies fixated on, and “stuck” with a remanufactured products only business model.

Let’s not kid ourselves. All end users buy an Aftermarket, remanufactured cartridge because it is cheaper. That same end user comes back if the quality was good. All the merits of recycling for reuse and eco friendliness do not enter the equation now. They may have done back in the early 90s. Now remanufactured cartridges have to compete with new build, patent safe, cheaper, better quality products. The truth is they fight a losing battle.

This is the big problem for parts and supplies distributors and vendors alike, who traditionally have supported, trained and serviced cartridge remanufactures around the world for the last 30 years.

Desperate Times Give Way to Lies and Fake News

Nothing irritates me more than carefully prepared propaganda that is designed specifically to misinform and misrepresent industry information for the purpose of benefiting those who have their own agendas. It’s transparent of course to those “in-the-know” and potentially influential to those that are not, but seeking to learn.

There is a lot of nonsense written and said about our industry by those who try and prosper from the falsehoods they propagate.

Let’s take one claim that is repeated time and time again, as a blatant example. “Every cartridge coming out of China is a clone, and patent infringing.” Sound familiar?

Some media and some western remanufacturing companies attempt to influence every cartridge reseller, dealer or wholesaler that it is true. Why? Because they fear losing business to Chinese imported products and they use the “everything from China is a patent infringing clone” defense to fight it.

Such blanket statements are simply untrue. They are fake news. The truth about imaging products exported from China to the West does not help their cause, so it is hoped scaremongering and creating false impressions will urge customers to remain loyal and keep prices stable.

Let’s clear this off the table once and for all. To say every imaging cartridge imported from China is a clone and patent infringing is a lie. Some world-class companies within our industry have made huge investments to build unique patent portfolios and have successfully designed and produced alternative new-built imaging cartridges that are a legitimate work-around alternative to an OEM original product. They are not clones, nor are they patent infringing.

However many of these new-built cartridges have a winning edge that seriously worries the competition, and rightly so. By virtue they are not remanufactured means they do not have a high empty cartridge cost in the bill of materials as do remanufactured cartridges. They do possess a consistently high quality and a lower price point than remanufactured products, and are also “patent safe” in that they do not infringe the OEM patents.

Of course not all compatible cartridges coming out of China are like this.  It is probable that most Chinese companies attempting to export imaging cartridges into the US and European markets are infringing and are a “copycat” of the OEM. Such companies should be exposed and sued by the patent holder. Hopefully they will be. But it does not give license to create a false impression that everything from China is bad.

The term “clone “is like a returning bad penny that you never seem to get rid of. The term should be reserved for a new built cartridge that is an exact replica of the OEM in all respects. It follows, therefore, that if a new built cartridge is not an exact replica of the original OEM, it is not a clone. An Aftermarket toner is not a “clone” toners, as often reported, since many differences are evident in the formulations, which for the most part are “secret recipes” rather than patented formulations. Patents that exist in the toner area are more to do with how it is manufactured than the finished toner powder itself. When looking at toner powder, how can you tell if it was manufactured in a way that infringed someone’s patent?

Fake news is probably here to stay. When the facts don’t suit the argument, sell fake news. It’s like telling lies convincingly: some will be fooled some of the time, but not everyone will be fooled all the time.

There are now three choices and each is here to stay. 1. OEM genuine originals; 2. Remanufactured; and 3. New built non-infringing compatibles. The pros and cons of each will win or lose customers. However, the facts will prevail, not the fake news.

Potentially, the cheaper, non-infringing New built compatible cartridges could see the Aftermarket double its market share within 5 years. That volume increase will come from the OEM’s share and from those mainstream remanufacturers who do not transition. Both the OEMs and Remanufacturers are seriously worried and some with are desperately creating a false picture.

As Ronald Reagan said, “Trust but verify.”