Collapse of Australia’s Ink & Toner Specialty Channel: What Went Wrong?

Collapse of Australia’s Ink & Toner Specialty Channel: What Went Wrong?

For over a decade, Australia’s ink and toner specialty channel was a thriving, profitable, and service-driven sector. End-users enjoyed substantial savings while resellers, distributors, and manufacturers all benefited from healthy margins. But over time, this once-flourishing industry has deteriorated. Today, only a handful of its original players remain. What happened?

Early Success

The Australian market was once a global benchmark for aftermarket printer supplies. Independent retailers and franchises like Cartridge World (CW) offered competitive alternatives to OEM products with strong customer support. Distributors and factories worked in harmony, creating a channel that thrived on innovation, service, and mutual profitability.

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However, that balance slowly unravelled due to a series of missteps. Here’s a look at the key turning points.

2005: Price Erosion Begins

The first major fracture occurred when two major toner distributors entered the inkjet market and slashed prices without fully understanding the segment. They viewed inkjet merely as a competitive add-on, not a product that required specific expertise. This set off a price war that undermined value, weakened margins, and de-incentivised specialization.

In a domino effect, most distributors abandoned specialization altogether, trying instead to become one-stop shops. As quality and service declined, the channel began to lose its edge.

2007: Management Missteps at Cartridge World

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Cartridge World, then a leader in the space, was sold to a private equity firm that lacked experience in the industry. Long-serving staff with technical and market knowledge were replaced by managers with little understanding of printers, refilling, or international logistics.

Franchisees lost confidence as operational support deteriorated. One senior executive tasked with product procurement reportedly went 18 months without securing a single new product. Poor hiring decisions and a reluctance to address internal weaknesses became recurring issues.

Instead of investing in talent or listening to franchisee feedback, the parent company often promoted underperforming managers, further eroding morale.

2010: Disappearing Independents

For many years, independent stores and CW stores existed in near-equal numbers. However, growing OEM technological barriers and increased competition placed pressure on the independents.

CW’s expansion efforts diverted supplier attention away from smaller retailers. At the same time, new franchisees received insufficient training. Often, the business owners just received a basic refilling overview for a significant fee. Most hands-on training came from peers or distributors, not the franchisor.

Then came a strategic misstep: Cartridge World phased out refilling support. This decision stemmed partly from a belief that stores underreported refilling sales, which HQ found hard to track. The move abandoned CW’s primary market differentiator and left franchisees to compete on the same playing field as every other retail outlet, just with more overhead.

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2012: Strained Supplier Relations

As CW’s store numbers grew, the franchisor used its influence to negotiate ambitious supply deals. However, many of these were never fulfilled. Multiple well-known global manufacturers and distributors allegedly claim they had negative experiences with CW HQ during this time.

These included unfulfilled promises of exclusivity, unexpected contract changes, or abrupt cancellations. This not only harmed long-term relationships but also limited the support available to stores.

2015: Ownership Changes Without Renewal

Cartridge World Global was reportedly sold by its Australian owners to China-based Suzhou Goldengreen Technologies Ltd. This was viewed by many as an opportunity to reboot. Unfortunately, the existing management team remained in place, despite prior performance concerns.

There were glimmers of hope: the Australian, New Zealand and UK distribution partners rebuilt franchisee trust and a revitalized U.S. operation briefly improved morale with a strong sales and training team. But progress was undone when global HQ apparently reasserted control, causing key personnel and distribution partners to leave and momentum to stall.

Many of CW’s best franchisees either left the network to continue independently or exited the industry entirely, taking decades of knowledge with them.

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2022: E-commerce and Market Saturation

The COVID-19 pandemic gave retailers a short-term boost. But post-lockdown, online competitors began dominating the landscape with extremely low pricing. Many lacked technical knowledge or support structures and competed solely on price.

Some distributors responded by launching or expanding their own online retail efforts. However, they competed directly with the resellers they once supported. Many retailers failed to identify the threat, continuing to buy from suppliers who were undercutting them.

Meanwhile, a few factories also bypassed both distributors and retailers by selling directly to consumers or large buyers, further squeezing the traditional channel.

2025: Industry Shake-Up

Three of Australia’s five long-standing distributors underwent major changes within months:

• Ausjet went into administration. Many industry members expressed frustration with its business practices. Its acquisition of the CW Australia & NZ brand license late in 2018 coincided with a steep decline in franchisee retention. By early 2022, most top-performing CW stores had exited the franchise.
• Toner on Demand, which was well-regarded for product quality and support, closed in early 2025. A victim of customers experimenting with lower-quality cheap product elsewhere.  Industry observers noted that the retirement of its original owner led to a gradual loss of direction.
• RTS Imaging, a respected distributor, also changed ownership after several years on the market.

Only Dynamic Supplies and Advanced Consumable Technologies remain as prominent players, uniquely with original ownership intact.

Separately, Planet Ark, the national cartridge recycling program, entered administration in May 2025, creating new challenges for retailers who collect empties on behalf of customers.

Global Decline of Cartridge World

CW’s global footprint has shrunk dramatically. From nearly 800 stores in the U.S. at its peak, there are now fewer than 90. At the same time, where there were 300 stores in the UK, today there are just seven. In Australia, traditional store numbers fell from 225 to approximately 60, many of which are now for sale. That equates to an 88% fall in store numbers across three key territories. While key franchisee’s have been exiting, the HQ management overseeing this dramatic decline has remained. CW Australia’s previous licensee entered receivership in April 2025, and a new licensee has since taken over.

Reports suggest inconsistencies in public ownership statements, with questions raised about the exact nature of global ownership and management control.

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Structural Challenges Today

The aftermarket print supplies channel now faces a critical shortage of experienced retailers, strong distributors, and trusted support systems. Retailer loyalty has diminished, partly because customers expect premium performance from budget products. When expectations aren’t met, distributors often absorb the backlash, even when they didn’t supply the product.

Some retailers continue selling entry-level products while marketing them as premium, either through misrepresentation or a lack of awareness. This erodes trust and harms long-term relationships with customers.

Technical hurdles from OEMs, including regular firmware updates, make low-cost cartridges less viable. Customers who encounter issues may abandon aftermarket products entirely and return to OEM brands.

Meanwhile, OEM market share continues to rise, even as prices remain higher. Customers are willing to pay for reliability, and the aftermarket hasn’t consistently delivered it.

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Moving Forward: Is There Hope?

Despite the current challenges, opportunities remain:

• Quality and Service: There’s still strong profit potential at the higher end of the market for retailers who focus on reliability and knowledgeable support.
• Budget Strategy: Budget cartridges can be profitable—but only in high-volume, low-overhead models. Brick-and-mortar stores are generally unsuited to this strategy unless supported by strong customer relationships.
• New Licensee: The new owners of CW Australia & NZ are, on paper, a step up from recent management. If allowed to operate independently and focus on retailer success, they may help reinvigorate the brand.
• Rebuilding Trust: Distributors and retailers that prioritize transparency, training, and product quality can still succeed, especially as competitors fall short on service.

There was likely no deliberate plan to derail the specialty channel. Rather, it was undone by a series of poor decisions: underqualified management, overreliance on weak strategies, lack of transparency, and an obsession with short-term gains.

The Australian aftermarket industry has reached a crossroads. To recover, it must rebuild on a foundation of quality, integrity, and support. There is still demand, still talent, and still room to grow—but only if past lessons are truly learned.

James Douglas is an award-winning entrepreneur based in Sydney and has become a trusted supplier of imaging components and products and advisor for retailers businesses across Australia. He is a recipient of the Excellent Service Award for his tireless efforts in personally driving to visit, train and mentor each and every one of his customers, providing them with dedicated support to remanufacture and sell high-quality, non-infringing aftermarket supplies to their customers.

Douglas invites you to chat with him about your business, reaching out to him on LinkedIn, email, on the phone +61-408-52-63-73, on Skype at JamesKADouglas or online at www.adcon.net.au

Related:

• Behind the Eight Ball
• Sales: the Good the Bad and the Ugly
• Remanufacturing the Customer’s Cartridges Instore
• Selling the Same Cartridge With a Huge Price Difference
• Short Term Gain for Long Term Pain
• Online Sales Outlook for Australia Market
• Collapse of Australia’s Ink & Toner Specialty Channel: What Went Wrong?

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