Attitudes toward new-build toner cartridges are changing slowly, but gradually. Christian Pepper can remember a time when he worked for a cartridge remanufacturer, and occasionally dealer clients would defect to the new-build side, lured by the siren song of decent quality and lower prices. Invariably, a month or two later, the dealer would return to Pepper, wearing a twisted face, uttering, “You were right, they were absolute crap.”
That was a good five years ago, a lifetime when you consider all that has taken place in the aftermarket during that span. The legal community has certainly fattened its coffers as OEMs have waged war with remans and new-build manufacturers over claims of patent infringement. The OEM legal pushback has visited a toll on many remans, and Pepper—now the president of LD Products Channel Partner Division—was not blind to the possibilities that new-build offered. It wasn’t the concept that was flawed, but rather the execution.
Christian Pepper, president of LD Products Channel Partner Division
Pepper huddled with Matt Daniel, LD Products’ vice president of product development, and dissected the problem with reman cartridges. Only the shells and a few of the inside gears were being reused, and those elements at the heart of the cartridge—the drums, developers, toner formulations, the chips—were all new. “So what if they started out with a new shell and added all the components found in a high-quality reman cartridge?” Pepper wondered. In that case, Daniel replied, they’d have a product that’s at least as good, if not better. And by using high-quality raw materials from reputable suppliers, they could make it non-infringing.
Idea Takes Root
Pepper took the idea to Aaron Leon, the founder and CEO of LD Products, the world’s largest internet reseller of consumables (supplying 50,000-plus cartridges and 8,000 orders per day), which was seeking to expand into the dealer market and had long-term relationships with the main Chinese manufacturers. Thus, the Channel Partner Division was born.
That was roughly two years ago. Now, the Channel Partner Division is helping the parent company celebrate its 20th anniversary with big news. It received a resounding thumbs up stemming from independent, third-party testing results from Keypoint Intelligence-Buyers Lab (BLI) that has validated its GOLD LINE new-build cartridges are on a quality par with OEM, at a drastically lower price point.
Frustrated by prevailing prejudices against new-builds and wanting an independent voice to augment his marketing efforts, Pepper decided to make the significant investment of commissioning BLI to test two GOLD LINE SKUs against HP’s OEM brands. When the results indicated the GOLD LINE offered an overwhelming advantage in cost of ownership and comparable quality, Pepper knew he’d found the right messenger to dispel the myths about LD Products’ “inferior” new-build product.
“It was a fist punch in the air, a validation of all our hard work over the past two years,” Pepper said of the test results. “Matt Daniel has poured his 25 years of experience, his heart and soul into this project in order to build this product. The Chinese assembled it for us, but we engineered the product and micro-manage them to ensure the final product lives up to our standards. We had to put crazy quality-control processes in place, and we randomly sample and match the products against our agreed-upon bill of materials on every purchase order. We’ve done our best to balance high quality with a price point that sets us above the rest.”
Under the Microscope
In March, BLI did a yield test of the LD GOLD LINE 26X cartridges against HP’s 26X. BLI purchased nine cartridges of each brand from the marketplace, testing them on two LaserJet Pro M402n printers. LD Products chose the M402 cartridge because it’s the top-selling cartridge in MPS accounts and because Clover Imaging Group had previously tested its reman equivalent, and BLI found it was comparable to the OEM.
LD Products had to give BLI their customer database and BLI went out and purchased cartridges from multiple dealers. This process ensured there could be no fixing of the result, by submitting ‘special samples’ to BLI for testing. It had to be product that dealers and customers were using in the market. With the LD-HP test, all 18 cartridges attained the full rated yields, and there were no failures. Both brands exceeded their 9,000-page yields, with a slight edge to HP. The OEM also held an edge in overall print quality, outpacing LD Products with average test scores of 4.08 to 3.81 (on a scale of five). LD Products did hold a large margin over HP in terms of solids, while HP performed somewhat better in text and halftones.
“In solids, the LD cartridge was denser and had a richer black,” Pepper noted. “The OEM toner formulations are very rich. It’s very hard for aftermarket toner manufacturers to replicate the OEM toner quality at the kind of price point we need to be at. So it was interesting to see that our black was denser and richer than the OEM.”
BLI noted a significant cost savings with LD’s 26X, which was less than half the cost of HP’s cartridges when printing 4,000 pages per month during a five-year period. In fact, the cost of ownership in printing 4,000 pages over a three-year period using HP cartridges was $4,739.99, compared to $1,961.89 for LD Products’ GOLD LINE.
The second test covered GOLD LINE’s 81X Extended-Yield cartridge (40,000 rated yield) against HP’s 81X (25,000 yield) on an HP LaserJet Enterprise M605n. Again, all cartridges achieved their rated yields; in fact, LD Products exceeded its yield by 16%. When factoring in the lower pricing with the high yield advantage, BLI calculated LD’s toner would cost about one-third the price of HP when printing 15,000 pages per month during a five-year span. The low cost of ownership significantly tips the scales: HP has a total cost of $8,926, while LD Products is $2,417, when printing 4,000 pages a month for three years.
HP again held an edge in average image quality scores, with a composite advantage of 4.17 to 3.93. BLI, obviously, takes a scientific approach to measuring print quality, checking solids, halftones and text; measuring densities; and checking for over-spraying and banding, among other elements. It even viewed the text at 10x magnification. However, the .24 overall difference in quality from a value proposition pales against the GOLD LINE total cost of ownership.
“It was total validation, and I felt really good that what we had seen in our testing and what our customers had seen in their accounts was matched by the most-credible testing organization in our industry,” Pepper said. “End users don’t care about magnifying a text 10 times to see what overspray looks like. They are concerned with what it looks like side by side (with the competition), and they care about it being a fraction of the (OEM) cost.”
To his knowledge, Pepper said this was the first successful test of a new-build and extended-yield cartridge. He feels it is a resounding triumph for LD Products’ value proposition, and puts remans on notice that some new-builds are a credible alternative to OEM cartridges. They are also a viable choice for use in managed print contracts, with higher yields that parlay into greater profit margins for dealers.
“If our product goes further and longer than our yield rating, then dealers get an extra layer of profitability padding inside every single one of our cartridges,” he noted. “So MSPs don’t have to worry about cartridges not hitting their yield and lowering their projected profits.
Shifting Attitudes
The testing clearly doesn’t vindicate all new-build manufacturers. And while there are new-build products on the market that don’t bring the quality and performance expected by dealers and their end-user clients, LD Products is no longer part of that conversation.
“This is highly credible, irrefutable data from the leading testing organization in the industry,” he added. “Furthermore, we plan to commit to ongoing BLI testing, and I challenge every remanufacturer or new builder to do the same so that dealers and end users can easily see who they can trust.”
With a return rate at a fraction of 1%, dealers have taken note of the performance and price of GOLD LINE cartridges. Notable national dealers such as Copiers Northwest, JD Young, Fisher’s Technology and Applied Imaging have provided written testimonials that the Channel Partner Division has published, and numerous others have provided glowing, not-for-publication reviews of their products (out of competitive considerations). Curiously, LD Products gets more returns of reman products (by error) than they get returns of their own cartridges.
Pepper would also like to think that LD Products’ new-build cartridges add a touch of class to the aftermarket world. A reman cartridge arrives in a one-size-fits-all box with cheap filler and expanding bags. When removed, the cartridge appears scratched up, and labels cover the OEM brand’s stickers. All in all, receiving such product is an underwhelming experience.
LD Products is preparing a marketing campaign that will showcase how its cartridges present, including the packaging, as opposed to a reman cartridge. “When the end user sees a GOLD LINE, it’s pristine,” he said. “There’s attention to detail in the packaging. Every box is specific to the cartridge inside of it. Visually, it looks amazing because it’s brand new. Dealers are blown away by the out-of-box experience, and then the product works, which is most important of all.”
Gaining Momentum
With the glowing report card in his back pocket, Pepper and the Channel Partner Division are seeking to double down through growth. He is recruiting more salespeople into the fold, and is confident that dealers will see a new-build color cartridge line from LD Products as the company migrates away from reman color. He promises it will have the same quality, yield and price savings that dealers have come to expect from the GOLD LINE. As component tolerances and the level of precision in building the shells are higher, the degree of difficulty for making a quality color cartridge is substantially greater. Also, LD Products has a new line of inkjet products that are scheduled to come out this month.
On the heels of the successful GOLD LINE CHALLENGE campaign from late 2018, which tested dealers’ knowledge of new-build versus reman cartridges, Pepper will also come back with another initiative this fall that centers on the quality aspect of new-builds.
So the question now becomes, have dealers fundamentally changed their attitudes toward new-build cartridges in general? Pepper notes that many dealers already put low-yield cartridges in transactional environments, so the needle has definitely moved. Although he hails from a reman background, Pepper fears the product may have outlived its usefulness.
“Reman was good while it lasted, but it’s a dying dinosaur,” he said. “We’re trying to educate customers that not all new-build cartridges are bad, and not all of them infringe the OEM’s intellectual property.
“Think about Henry Ford. Competitors hated him when he came along with the car, because they were invested in horses and buggies. But progress is progress, technology changes, things move on, and that’s where we’re at now. New-builds are quickly eclipsing reman cartridges in all respects.”
