I view myself as a motel manager, and as a motel manager, a big part of my job is to understand and tactically eliminate, reduce or renegotiate the overhead costs in my business.
I admit that I sometimes take this too far and perhaps need a bit of professional help. But so far as the business is concerned, it is excellent for our bottom line to have someone with these cost-cutting tendencies. Sure, such an approach may be aggravating for the people around me, but when it comes to choosing a new printer to replace the one that recently conked out (as happened last week), it is nothing short of a godsend.
A quick trip to the stationary store saw me pull aside one of the very helpful retail assistants and practically grill him for 15 minutes on the various makes and models of the printers available, as well as their long term cost implications. Here are some of the valuable insights I learned.
Cheaper is not always better
Many of the printers on offer at Warehouse Stationary had very low prices, particularly because Warehouse Stationary was running a sale that day. I could not believe my eyes when I saw a good looking office printer and scanner on sale for just $29 NZD. But a closer inspection of the printer made me realise that it would not be fit for purpose. While it saved me money up front, this printer would have me forking out money hand over fist in the long run.
First, Decide on Your Goals
At the risk of sounding slightly ridiculous, you need to have clear goals for what you want to achieve when buying a printer. The three key cost areas in choosing a printer are 1) Capital Cost (ie the cost you pay upfront) 2) Ongoing Cost (relating to cartridge replacement and ultimately the cost per printed page) and 3) Time Cost. While most people are good at considering point 1), they often fail to consider points 2) and 3).
In my case, the main goal I wanted to achieve was the lowest cost per printed page, and this article will concentrate mainly on that. The next thing I wanted to focus on was time cost, particularly for long and mission critical documents. The actual capital cost was a distant third.
Calculating Your Cost Per Printed Page
Before going in to this calculation, it is worth having a rough idea of one’s average document print length. Because one cannot be too careful when it comes to averages, it makes sense for a few weeks or months leading up to the purchase of a new printer to record the actual number of documents and their corresponding pages that you printed in a log book, similar to how you would do so for a vehicle fuel mileage log book. You can then reasonably reliably calculate the actual average, although the reliability of these figures will depend heavily on how long you have been keeping records for. 12 months should be sufficient, and be careful to ensure that all members of the household accurate record the data pertaining to the documents they print as well.
Once you have this data, you can simply divide the total number of pages printed by the number of documents printed, in order to find your average printed pages per document. You also add up the total amount of pages across all documents to find your total printing requirements. It is also worth dividing this amount by the number of months in your records in order to find the average number of pages printed per month. Alternatively, you could simply record the date that you purchase a new ream, and the date that you finish that ream – then divide the number of sheets (usually 500) by the number of interluding months to find your average pages printed per month.
Next, you need to compare the various types of print cartridges for the printers you are considering with the recorded cost per page. Keep in mind that the recorded cost per page and the actual cost per page may be very different, because the recorded cost per page for many cartridges assumes that only 5% of a page will be covered in ink, which in my view is pathetically optimistic.
You then need to divide the total cost of your cartridges by the amount of pages that they print. So manufacturer trust will need to be applied here. Below are some examples of the different cost structure of print cartridges for printers at different levels.
Keep in mind the Cost Per Printed Page needs to factor in the cost of colour cartridges as well as black cartridges. Some systems will enable you to use one cartridge (which will contain all three colours) whereas other systems will require you to have separate cartridges for each of the following colours – Cyan, Magenta and Yellow.
The number of cartridges you require will have a major impact not just on your cost per page, but also on your Time Cost for cartridge replacement, which we’ll see in the next section.
Print Cartridges Cost Comparison
Finding Your Monthly Print Cost
You then multiply the number of pages printed per average month by the Cost Per Printed Page. This will give you the approximate amount that you spend on ink or laser printing per month.
In our case, we go through 125 pages per average month. At this rate, the monthly print cost would come to $12.78 on the LC3319XL Cartridge or $20.21 on the LC237XL & LC235XL Cartridges.
Assessing the Time Cost
The main reason that we might accept the latter option, the LC237XL & LC235XL Cartridges, over the significantly cheaper LC3319XL printer, is because of the time cost. The LC237XL & LC235XL system requires only 2 cartridges, the LC3319XL system requires 4. For a small motel like ours, we are never going to have a million spare cartridges sitting around for refill, and the time cost associated with replacing one of the cartridges in the four cartridge system EVERY TIME it runs will be significant.
This is a major mistake we have made in the past. At another residence I got sucked in to the idea of buying a laser printer because I viewed it to be more cost-effective. Little did I realise that a four cartridge system would require cartridge replacements SO FREQUENTLY that I would be off down to Warehouse Stationary or Cartridge World every second week. Not only that, but the cost of a replacement cartridge could fly up to over $130 per cartridge, and sometimes you would need to buy two or three and stock up well in advance. Not to mention the huge amount of chopping and changing associated with popping in a new cartridge every time the ink in one of them ran low.
In hindsight, this was more to do with the way we were using the printer for colour printing – but nevertheless, colour printing is part of the reality of a modern business and needs to be reflected in the time cost. So do yourself a favour and weigh the following into your calculations.
How much is your time worth per hour?
How much time does it actually take you to replace a cartridge?
How often will you need to hop down to the store to make cartridge replacements?
When you need to go down to the store, how long does it take you? (Be realistic here.)
I estimate that I was wasting 2 hours a month flapping around with print cartridges under a 4 cartridge system. If I value my time at $50 per hour (just for example), then it was costing me $100 per month or $1200 per year just to resolve these recurring crises. Far greater than the cost savings associated with an efficient printer.
A far smarter option in my view is to use the 2 cartridge system. Although at a higher cost, and less ink-efficient (you need to replace the three colour cartridge as soon as one of the options runs out), it is just more easy to manage in a business with tight cashflow and limited time. When you’re printing in colour, the three colours tend to run out at roughly the same time anyway.
So decide where your priorities lie. Experiment. And don’t be afraid to replace your printer if it just isn’t working out time-wise.
Assessing the Capital Cost
This should be the easiest one to determine. Just read the price on the shelf.
Our printer cost $199 and had a $70 cashback. Meaning a net cost of $129. We should make that back in roughly 6 months based on the savings in print cartridges from our previous printer.
They’re practically giving them away.
Other Considerations
You should consider the warranty terms before purchase. You should also note that printers over $500 may need to be added to the asset schedule and depreciated. Contact your accountant on how to do this.
Conclusion
You don’t buy a printer, you buy a print cartridge type. Choose the one the goes the longest and saves you the most hassle.
And most importantly, remember that Time Cost is the most important of all three costs.
