IBISWorld Says Printer Toner Prices Stay High

IBISWorld’s analyst Michelle Hovanetz released a report stating that printer toner has a buyer power score of 3.3 out of 5, reflecting toner prices have remained high due to the high specialization among toner cartridges.

Mr. Hovanetz further explained that once a buyer purchases a printer or photocopier, their toner choices are extremely limited. OEMs develop their equipment to be biased toward same-brand toner cartridges, thereby ensuring a steady stream of revenue. A few substitutes exist, such as remanufactured cartridges or refill services, but quality concerns generally deter most buyers that regularly depend on printed documents. This specialization and reliance on brand-name toner leads to high market share concentration. Consequently, manufacturers have been able to raise prices. Hewlett-Packard and Canon Inc. control the majority of the market, thereby reducing buyer negotiation power.

As reported, input costs for printer toner can be highly volatile. Plastic materials (a main input of toner production) are derived from oil, which has had highly volatile prices. Iron ore prices have also been highly volatile in the past three years, affecting the price of iron oxide, another major component of toner. Fortunately for buyers, volatile input costs have not translated to wide fluctuations in toner prices. Suppliers have some cushion when input costs rise unexpectedly because of the high profit margins earned on printer toner. Stable price trends benefit buyers by enhancing their ability to accurately budget for future purchases.

Although a rising number of businesses has increased the size of the market, growing internet usage has led to a drastic shift toward digital file storage and sharing as opposed to printing. As a result, this increased reliance on digital documents has reduced demand for toner. Over the next three years, toner prices are forecast to grow at a slightly slower rate due to the increasing adoption of digital technologies.


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