Your Business 2

So now you have dumped half or more of your overhead costs by selecting a cheap seat site for your cartridge business. Let's look at the numbers again.

Ink $ .50
Other Supplies $1.00
Labor $1.00
Overhead $1.00
Gear $1.00

Total $4.50

$4.50 from the $12 you charged for the service times 500 cartridges gets you to $3750 in pretax net or $45,000. Take home $30K. You have given yourself a $4,000 raise without loosing anything. But the real reason for this exercise is to show what adding a buck onto the cost of processing a cartridge does. So don't do it. Don't avail your self to "simple fix" cartridge refilling jigs and plugs, don't add bottom plugs to Espon cartridges that cost you $.35 a unit, don't buy a super duty cartridge tester unless your volume dictates you need it. What every your do, don't refill a cartridge you can buy cheaper from a factory that has lower per unit cost than you do. If you think a Franchise will save you the need to know or the need to learn or the technological advantage, it will not. Now go back over the numbers and see what franchise fees will cost you. Don't add a dollar of cost to every cartridge you touch.

So, do you need a centrifuge? In most cases yes. But you don't need a $600 dollar one made just for cartridge work (it isn't) when a cheap used washing machine for $25 with a spin cycle will work (it will). Don't buy a fancy vacuum chamber computer control refilling machine when flushing and spinning and syringes will work (it will). And don't perform flushing and spinning and vacuum chamber operations on every cartridge that comes through the place because you are trying to set standards for quality (it won't help). You are in the discount business, make your proceedures and decisions reflect that dogma.

What about toner in this model? Well, it's much better. The average toner sale might be $50 or higher. Your costs should be about 50% or so. A bunch of toner sales negate all the risk you take in refilling ink jet cartridges. What risk? The risk of hiring and training your technicians without a guarantee that you will process 500 cartridges per month (you won't). How can you get your volume up? It's not just that. It's "how can you get your high margin volume up?"

Unless you can set up a deal with various retailers to have a drop off service in thier stores, your ability to garner business from your retail area extends not far beyond a 6 mile circle from where your shop is. That's what major retailers use in suburban settings where there are other retailers supplying similar goods. Like Walmart. So just accept it as fact. You will have regular customers that drive by on the way to somewhere that live 12 miles away. But your sphere of influence, for a $12 discount product is 6 miles. Advertise like crazy and get people coming from across town to use your service? Pointless. They will use a conveniently located service or buy new or buy a refilling kit off the internet, once, then buy new. Should you sell refilling kits? Absolutely. But warn the customer they may not be successful if the cartridge nozzles are blocked. But make sure you charge ANYONE who comes in with a full cartridge a head cleaning fee to unplug thier nozzles and make sure the head cleaning fee is half the price of a refill. They will do it once or twice, have issues, decide to pay you to do it.

Now you have the playing field laid out. You are a discount provider, your customer is a discount consumer. And one lady in a Mercedes coupe that is a "greenie". The people driving Prius' will only use you if your prices are right. They didn't buy the Prius to save the planet, they bought it to save gas money and save the planet. I can assure you that if the Prius was 100% biodegradable and disolved into pure toxin free mulch at the end of its life cycle a lot of people would want them. But if they cost $5,000 more than the one that turns into a greasy rusting Lithium filled bio-nightmare of a hulk after ten years of service, few will sell. And one more thing, in an odd way you are not in direct competition Staples. To get a cheaper price the rules need to change. No forever warranties. No freebees just to be nice a in hopes that you will gain a life long customer. You are in the discount office supply business. Most of your best customers will weathervane into the next cheapest deal that comes along.

So much for the soap box. Don't add costs, talk to fellow refillers, buy technology when it makes monetary sense, be creative, provide the highest level of service you can, don't do ANYTHING for free.