"ethics" (?) of forced supply purchases

[Don Y]

Hi,

I'm curious as to the ethical issues (opinions) regarding
tying customers into a particular supplier ("yourself")
for ongoing product "consumables".

[E.g., Joe Computer User purchasing printer supplies
from the manufacturer instead of Bob's House-of-Clones]

Ignore the case(s) where there are significant liability
issues involved (e.g., replacement parts for aircraft,
chemicals for medical assays, etc.).

Clearly, there are certain cases where the supplies can
arguably affect the perceived quality of the product (*your*
product) where you might argue that you have a financial
interest (reputation) in preventing your product's image
(and that of your firm) from being sullied by some off-brand
supplier.

(This was an argument printer ink suppliers tried to float)

But, that often can be a thinly veiled rationalization for
locking the consumer into *your* supplies.

When does this just get to be *too* outrageous? E.g., I
know of a medical instrument supplier that sold "proprietary"
distilled water (!) -- in tamper proof, one-time-use "modules".
(Do they *really* think no one can supply distilled water
to whatever degree of purity they claim to need??)

When does the customer start to *resent* the vendor because
of this sort of practice?

(I used the printer ink analogy as it seems that customers
are *finally* "getting wise" to that false economy -- $99
printer with $80 ink cartridges!)

I.e., what would a *rational*, *fair* set of criteria be
for making this decision (vendor-side)? How do you *not*
sound "pissy" when you disclaim the use of any "unapproved"
supplies as voiding the warranty?

As a distinctly separate issue, how do you extend this reasoning
into supporting third-party *service*?

In each case, keep in mind that it is increasingly easier to
find "proprietary information" for just about anything. And,
a garage shop, someplace, who will provide the services/supplies
you want/need via an "unapproved" channel.

 

[Don Y]

Unless they have a contractual relationship, other people's processes
are not under the medical instrument supplier's control.

Of course! But designing your instrument so that it will
only *work* with "approved distilled water cartridges"
seems a bit disingenuous. Deliberately making an excuse
to charge people for a supply that they could otherwise
get from any number of *reputable* suppliers.

[Like making harvesting sea-salt illegal to "protect" the
spice trade]

You have to look at the total cost of ownership. If you're willing to
assume the risk of incompatibility, go for it.

That's what the *consumer* has to do. I'm interested in the
vendor's outlook on the process. I.e., you tie a customer to
your supplies ARTIFICIALLY and when do you think the customer
will start resenting this?

To return to the printer ink analogy... sell *your* ink at prices
comparable to the third-party suppliers and the customer no longer
has a gripe with you. OTOH, sell yours at an artificially inflated
price and the customer starts to resent his relationship with you!

In many printers, the technology has been pushed into the cartridge,

In *some* printers, that is the case. In others, the only technology
in the "tanks" is a metering device that ensures the tank will
not be refillable. Extra cost put there *just* to ensure the
user doesn't buy someone else's supplies.

while the printer itself is rather retarded. But the idea to sell the
base unit cheaply while making money on the addons goes back to video
game consoles/video games, Barbie dolls/Barbie doll clothing, and even
safety razors/razor blades.

toilet paper with proprietary dispensers, etc.

And, in each case, you can't complain
about the performance of the base unit when you are using someone
else's addon, whether the blade doesn't shave, the clothes don't fit,
or the video game doesn't load.

This is a *rational* explanation that a vendor can engage in.
However, the customer can see it differently: you are *forcing*
me to purchase these substandard supplies because you have
artificially inflated the cost of "genuine" supplies.

As a vendor, you're foolish to reassure yourself with these
sorts of rationalizations -- once your customers come to
*different* conclusions!

Demand that the vendor do compatibility testing with third-party
supplied products or you won't buy it.

*We* are the vendor. We don't want customers pissing and moaning
because they feel forced to buy something from us that, in their
minds (or, in the minds of third parties INFLUENCING THEM), they
should be able to purchase from other "less expensive" sources.

Validating third party suppliers just gives the customer another
outlet for his cynicism: ("Of *course* they refuse to validate
Bob's Discount Outlet -- because Bob's prices are *so* much
lower than the other suppliers they've crawled in bed with!")

IMO, the "safest" approach is NOT to be in the supplies business
at all. Are you selling printers or ink? Cameras or film?
Assay equipment or distilled water?

But, that means you have to be able to *attract* someone to that
business.

Even factory approved service has sucked in recent years.

That doesn't address the question.

"Service is bad -- so let *anyone* service the kit?"

 

[Don Y]

If you make it refillable, what's to keep the customer from using tap
water? Tap water is the cheapest solution yet. Why not design your
product to make distilled water unnecessary?

A hospital wouldn't put tap water into an instrument designed
to use *distilled* water.

You've missed the point of the example: distilled water is
readily available in these settings to damn near *any*
degree of "purity" you can ask for! Forcing the customer
to purchase prepackaged distilled water, single-use "cartridges"
is clearly an attempt to profit *after* the sale...

[Like making harvesting sea-salt illegal to "protect" the
spice trade]

When does the customer start to *resent* the vendor because
of this sort of practice?

You have to look at the total cost of ownership. If you're willing to
assume the risk of incompatibility, go for it.

That's what the *consumer* has to do. I'm interested in the
vendor's outlook on the process. I.e., you tie a customer to
your supplies ARTIFICIALLY and when do you think the customer
will start resenting this?

If you don't believe your control of the supplies adds any value, then
price the instrument so you don't need to make your profit on the
razor blades.

This is not what usually happens. There is far more ONGOING
profit to be made from the supplies than the instrument itself.

I worked on the design of an instrument that had a *cost* of
just about $300 (DM+DL). It was *priced* at $6,000. And, they
were all GIVEN AWAY (expecting to make their money on supplies,
instead).

Different markets have different (customer) expectations when
it comes to supplies. A hospital may care very little as the
supplies get passed on to the patient in some form. As long
as the cost of the supplies doesn't exceed the amount that the
hospital can recover from its customers, everyone is happy
(with the possible exception of the insurance company/patient).

OTOH, marketing to The Unwashed Masses gives different results
and expectations. (as the printer ink issue evidences)

Do a FMEA review (Failure Modes and Effects Analysis) of your product
and supplies to determine what's critical to product function,
reliability, etc., and what's not. Then you have an explanation for
why certain items need to be controlled, either by you or a third
party.

Again, this ignores the issue. The distilled water does NOT need
to be controlled any more than a typical hospital would control
any of their other consumables. Yet, the manufacturer *chose*
to control it TO EXTRACT ONGOING RETURNS from an existing customer
base.

Aftermarkets for toner cartridges, ink refills, etc. clearly shows
that Joe Computer User is very willing to find alternative suppliers
for artificially priced consumables. Extra effort (and cost) added
to the printer/cartridge's design to discourage/prevent this has an
uphill battle convincing customers that they should *want* to use
these supplies (instead of being FORCED to do so).

Since these artificial constraints are superficial, its only a matter
of time before someone finds a work-around (a hospital wouldn't
even *attempt* a work-around as it would expose them to liability
claims).

If you have a small, manageable number of customers, work with them to
understand who their preferred suppliers are. Based on your analysis,
you should be able to tell these suppliers what's important and why.



No -- if the vendor's blessing of the servicer is meaningless, then
let the servicer stand or fall on his own reputation.

I'm not advocating "blessing" anyone! Rather, saying "here is
the information OTHERS would need to support the device" and
letting The Market sort out the good from the bad (servicers).
I.e., you bring your car in to some guy operating out of his
back yard and you *may* get a great deal... or, you may get a
royal screwing! In either case, it's not the car manufacturer's
problem!

 

[Martin Brown]

Of course! But designing your instrument so that it will
only *work* with "approved distilled water cartridges"
seems a bit disingenuous. Deliberately making an excuse
to charge people for a supply that they could otherwise
get from any number of *reputable* suppliers.

It could be for product liability reasons. For medical use you probably
need not only that it is distilled but that it is also free from any
bacterial contamination. The latter bacteria free condition is certainly
*NOT* met in many industrial scale distilled water plants.

You would be surprised what I have seen growing in sterile eye wash
bottles and bulk ultra pure distilled water containers.

[Like making harvesting sea-salt illegal to "protect" the
spice trade]

You have to look at the total cost of ownership. If you're willing to
assume the risk of incompatibility, go for it.

That's what the *consumer* has to do. I'm interested in the
vendor's outlook on the process. I.e., you tie a customer to
your supplies ARTIFICIALLY and when do you think the customer
will start resenting this?

The suppliers marketing people have worked out that Job public is pretty
stupid and will buy the cheapest printer without realising that a new
set of inks cost more. It is a loss leader on the hardware.

Same is true for mobile phones - they damn near give the phone away to
lock you into a long term contract.

To return to the printer ink analogy... sell *your* ink at prices
comparable to the third-party suppliers and the customer no longer
has a gripe with you. OTOH, sell yours at an artificially inflated
price and the customer starts to resent his relationship with you!

Of course the inks have an artificially inflated price if they are
single sourced and the no-clone technology works well enough. It is
annoying if you don't need absolute premium quality. I try to find high
quality printers where the ink/toner monopoly has been broken.

Incidentally does anyone know of Canon BCI-6 cartridge clones that
actually work adequately?

There are plenty of sites selling third party inks and toners of varying
degrees of reliability. If you don't mind the risk of gumming up the
print head then you are free to try them. Some work some don't. CAVEAT
EMPTOR

Printer ink on the street typically costs more per gramme than cocaine.

In *some* printers, that is the case. In others, the only technology
in the "tanks" is a metering device that ensures the tank will
not be refillable. Extra cost put there *just* to ensure the
user doesn't buy someone else's supplies.

And there are ingenious third party vendors that have designed fake
chips to defeat this mechanism for certain popular models. Do your
homework or get ripped off it is your choice what you buy.

toilet paper with proprietary dispensers, etc.

If you are daft enough to opt in to a single source lock-in then yes.

This is a *rational* explanation that a vendor can engage in.

And they have a point. You as buyer have a choice of buying the
product(s) that they offer for sale or something else.

However, the customer can see it differently: you are *forcing*
me to purchase these substandard supplies because you have
artificially inflated the cost of "genuine" supplies.

Capitalism is red in tooth and claw. Their objective is to maximise
income for their shareholders which pretty much means screwing every
last penny out of you. If you don't do the sums for cost of ownership
rather than headline price you deserve to be fleeced.

As a vendor, you're foolish to reassure yourself with these
sorts of rationalizations -- once your customers come to
*different* conclusions!

Why then do most people fall into exactly the same bear trap with every
successive purchase of a new printer?

*We* are the vendor. We don't want customers pissing and moaning
because they feel forced to buy something from us that, in their
minds (or, in the minds of third parties INFLUENCING THEM), they
should be able to purchase from other "less expensive" sources.

You have to make sure then that your offering is better than that of the
third parties. Once you have a department called "Customer Care" you
know you are on a downward spiral - it rapidly becomes a highly
profitable enterprise selling meaningless repair contracts on kit that
will almost never go wrong. Ever noticed how disappointed the sales
droids look when you fail to buy the extended guarantee at checkout?

Validating third party suppliers just gives the customer another
outlet for his cynicism: ("Of *course* they refuse to validate
Bob's Discount Outlet -- because Bob's prices are *so* much
lower than the other suppliers they've crawled in bed with!")

Then it is up to you to try Bob's Discount but don't come back whinging
if your printer has obviously gummed up with Bob's crappy ink.

IMO, the "safest" approach is NOT to be in the supplies business
at all. Are you selling printers or ink? Cameras or film?
Assay equipment or distilled water?

But, that means you have to be able to *attract* someone to that
business.

If there is demand for something then someone will sell it. The tricky
bit sometimes is persuading a manufacturer that the market is large
enough to be worthwhile. There are for example some Japanese optical
filters easily available in the US but not in the UK.

That doesn't address the question.

"Service is bad -- so let *anyone* service the kit?"

That route leads to very expensive faults if some incompetent nincompoop
has a go at mending equipment they do not understand.
If you are seen to be way out of line with others in the same game then
you will suffer either way - by being too expensive or too cheap.

Fred Laker's SkyTrain is the textbook example of the latter.

 

[asdf]

When does the customer start to *resent* the vendor because of this sort
of practice?

Welcome to the evil side of consumerism.

 

[Walter Banks]

Hi,

I'm curious as to the ethical issues (opinions) regarding
tying customers into a particular supplier ("yourself")
for ongoing product "consumables".

[E.g., Joe Computer User purchasing printer supplies
from the manufacturer instead of Bob's House-of-Clones]

Ignore the case(s) where there are significant liability
issues involved (e.g., replacement parts for aircraft,
chemicals for medical assays, etc.).

Clearly, there are certain cases where the supplies can
arguably affect the perceived quality of the product (*your*
product) where you might argue that you have a financial
interest (reputation) in preventing your product's image
(and that of your firm) from being sullied by some off-brand
supplier.

(This was an argument printer ink suppliers tried to float)

Look at the ethics from the extremes and see where the
dark gray starts to become white enough to be acceptable.

For example there are third party replacements and then
there are copies of the reverse engineered originals. One
extreme would be a movie DVD from a street vendor.

w..

 

[Walter Banks]

Again, this ignores the issue. The distilled water does NOT need
to be controlled any more than a typical hospital would control
any of their other consumables. Yet, the manufacturer *chose*
to control it TO EXTRACT ONGOING RETURNS from an existing customer
base.

One argument that I have heard from consumers and suppliers is
there is a benefit to having a single supplier for a product because
part of the payoff is a single supplier is responsible for a products
functioning correctly. In effect we have a consumer paying so
someone else is responsible. This was IBM marking to company
executives 40 years ago and some printer companies today.

W..

 

[Don Y]

Hi Martin,

It could be for product liability reasons. For medical use you probably
need not only that it is distilled but that it is also free from any
bacterial contamination. The latter bacteria free condition is certainly
*NOT* met in many industrial scale distilled water plants.

It *could* have been done for those reasons -- but it wasn't.
In case I haven't been abundantly clear: it was made that way
to generate an ongoing income stream. Period.

You would be surprised what I have seen growing in sterile eye wash
bottles and bulk ultra pure distilled water containers.

[Like making harvesting sea-salt illegal to "protect" the
spice trade]

When does the customer start to *resent* the vendor because
of this sort of practice?

You have to look at the total cost of ownership. If you're willing to
assume the risk of incompatibility, go for it.

That's what the *consumer* has to do. I'm interested in the
vendor's outlook on the process. I.e., you tie a customer to
your supplies ARTIFICIALLY and when do you think the customer
will start resenting this?

The suppliers marketing people have worked out that Job public is pretty
stupid and will buy the cheapest printer without realising that a new
set of inks cost more. It is a loss leader on the hardware.

Same is true for mobile phones - they damn near give the phone away to
lock you into a long term contract.

Replace "public" with "officer of large corporation" (responsible for
making purchasing decisions). The vendor still has to consider how
his customer will view the transaction.

The vendor can be uninspired and just try to nickel and dime
every customer for every item/service.

The vendor can package everything in a one-time transaction.

The vendor can come up with some strategy that decides what
supplies/services should be marketed to the customer, what
should be handled by third parties, and what should be
"hands off".

The first two of these scenarios are uninteresting as they
don't require any fine degree of thought/evaluation. I am
more concerned with criteria that the vendor can apply to
making the decisions in the *third* scenario.

Of course the inks have an artificially inflated price if they are
single sourced and the no-clone technology works well enough. It is
annoying if you don't need absolute premium quality. I try to find high
quality printers where the ink/toner monopoly has been broken.

So, you are already demonstrating a resentment for the vendor(s)
who've tried (unsuccessfully?) to lock you into a supply regime.
I get perhaps a request every two weeks for a printer recommendation
that "doesn't use expensive ink" -- so, people are aware of this
(enough so to actively question about it).

Incidentally does anyone know of Canon BCI-6 cartridge clones that
actually work adequately?

There are plenty of sites selling third party inks and toners of varying
degrees of reliability. If you don't mind the risk of gumming up the
print head then you are free to try them. Some work some don't. CAVEAT
EMPTOR

But its not just printer ink. Or replacement battery packs.
Or distilled water cartridges. Or...

Obviously, how the customer views the monetary outlay is a
significant issue. If he thinks he can just pass it along
to *his* customer, he probably doesn't give it a second
thought (unless it becomes a significant portion of the
charges that his customer incurs and threatens to motivate
his customer to looking for alternate suppliers!)

Similarly, the potential "consequences" of the purchase decision
weigh into it -- will this put some greater investment at
jeopardy?

And, the relative cost/savings ("investment risk") as well.
E.g., I'll often buy off-brand battery packs EXPECTING them
to have shorter times between charges *and* operational life
simply because I expect batteries to die often -- especially
for low duty cycle devices.

Printer ink on the street typically costs more per gramme than cocaine.


And there are ingenious third party vendors that have designed fake
chips to defeat this mechanism for certain popular models. Do your
homework or get ripped off it is your choice what you buy.

This is less likely to be encountered in "distilled water cartridges"
as the stakes are higher for the customer. Can a counterfeit
cartridge cause the machine to break? What is the (lost)
opportunity cost in that case? Can the counterfeit interfere
with the accuracy of the results? etc.

OTOH, counterfeit memory cards carry little downside risk -- if
the customer feels screwed by the product, chances are he'll
never know FOR SURE who the actual manufacturer was.

If you are daft enough to opt in to a single source lock-in then yes.

Again, I think it matters who is making the decision and their
relationship to the money/consequences. Being "given" thousands of
dollars of capital equipment (free toilet paper dispensers) in
return for being locked into a particular consumables supplier
(toilet paper) lets you avoid the sticky issue of justifying the
cost of all of that equipment (whereas the ongoing supplies just
looks like a normal cost of doing business)

And they have a point. You as buyer have a choice of buying the
product(s) that they offer for sale or something else.

Correct. And a savvy vendor will consider the potential for
lost sales and/or damage to reputation that ensues from this
sort of behavior. E.g., people dislike (current) HP printers
while, previously, their (laser) printers were respected and
cherished.

Capitalism is red in tooth and claw. Their objective is to maximise
income for their shareholders which pretty much means screwing every
last penny out of you. If you don't do the sums for cost of ownership
rather than headline price you deserve to be fleeced.


Why then do most people fall into exactly the same bear trap with every
successive purchase of a new printer?

I'm not seeing that. I've seen people walking away from printers
(especially color/photo printers) completely and opting for
simple B&W printers. Want a photo printed? Go to your local
office supply store and have it printed while you wait
for *less* than the costs of supplies "at home" (and without
having to worry about dried out cartridges, clogged heads,
poor color accuracy, etc.)

I.e., IME, people are learning the printer lesson (which is why
it was such a good example). It's *their* money (not their
employers'). They run out of ink and price the new supplies...
and decide to discard the printer!

You have to make sure then that your offering is better than that of the
third parties.

I'd prefer to simply make the "what sort of business are you in"
decision and, unless there is some *really* strong motivation
for being in the "supplies business", delegate that activity to
some third party.

But, you have to make it attractive enough for that third party
to *want* to take on that business (for some commitment period).
And, have to ensure that you don't then compete with them
(e.g., let *them* make all of the supplies and *you* purchase
them from them for the folks who insist on buying "from the
OEM")

Once you have a department called "Customer Care" you
know you are on a downward spiral - it rapidly becomes a highly
profitable enterprise selling meaningless repair contracts on kit that
will almost never go wrong. Ever noticed how disappointed the sales
droids look when you fail to buy the extended guarantee at checkout?


Then it is up to you to try Bob's Discount but don't come back whinging
if your printer has obviously gummed up with Bob's crappy ink.

Why is it the vendor's job to do this? Do auto manufacturers
validate proper operation of their vehicles with fuel from
different vendors FOR THE REASSURANCE OF THEIR CUSTOMERS?
You buy fuel from Bob's Discount Gas Station and end up with
water in your tank and it's *your* problem.

If there is demand for something then someone will sell it. The tricky
bit sometimes is persuading a manufacturer that the market is large
enough to be worthwhile.

Exactly. And, to reassure them that you won't be undercutting
"their" market.

OTOH, you need some reassurances from them that they *will*
continue to support these supplies for some period of time.
Otherwise, your customers complain because they can't get
supplies for the device they purchased FROM YOU!

There are for example some Japanese optical
filters easily available in the US but not in the UK.


That route leads to very expensive faults if some incompetent nincompoop
has a go at mending equipment they do not understand.

But, what obligation does the vendor have to prevent this?
I.e., they can hide all service information to make it
difficult for "unapproved" firms to attempt repairs -- though
that doesn't PREVENT someone from trying!

Does that sort of "monopoly" aggravate customers who feel
trapped into using "factory service" (at inflated rates)?
I.e., just like forcing them to buy ink from the manufacturer...

Again, what is the thinking that a *rational* firm should
undertake in making these decisions?

I know some larger companies that are very methodical about
evaluating new product offerings -- in terms of their expected
impact on sales of other, existing products. But, I think
they have "big numbers" to fall back on -- lots of history
in their markets and a good feel for how their customers
are likely to react to new offerings.

I'm not sure how they would address something like this
"artificial dependence" as it seems to have two edges
to it (whereas a new product is just a cost-benefit
analysis in the customer's mind).

 

[Martin Brown]

Hi Martin,



It *could* have been done for those reasons -- but it wasn't.
OK.

In case I haven't been abundantly clear: it was made that way
to generate an ongoing income stream. Period.

So were they cross subsidising the initial hardware or design and
development cost against the long term sales of consumables?
That is a partly legitimate thing to do to get expensive capital kit
into the market. The other common model is to sell very expensive units
to the early adopters or people who absolutely need maximum performance
at any price and amortise most of the development costs on them.

They tend to whinge a bit if the price falls too steeply, but have
usually forgotten before the 5 year renewal cycle comes around. This
sort of assumes that your new kit is sufficiently interesting.

You would be surprised what I have seen growing in sterile eye wash
bottles and bulk ultra pure distilled water containers.

[Like making harvesting sea-salt illegal to "protect" the
spice trade]

When does the customer start to *resent* the vendor because
of this sort of practice?

You have to look at the total cost of ownership. If you're willing to
assume the risk of incompatibility, go for it.

That's what the *consumer* has to do. I'm interested in the
vendor's outlook on the process. I.e., you tie a customer to
your supplies ARTIFICIALLY and when do you think the customer
will start resenting this?

The suppliers marketing people have worked out that Job public is pretty
stupid and will buy the cheapest printer without realising that a new
set of inks cost more. It is a loss leader on the hardware.

Same is true for mobile phones - they damn near give the phone away to
lock you into a long term contract.

Replace "public" with "officer of large corporation" (responsible for
making purchasing decisions). The vendor still has to consider how
his customer will view the transaction.

Sometimes you have to wonder how many liquid lunches and free overnight
golf sessions some of these executives had from corporate hospitality
before signing off on insanely expensive lock-in deals.

The vendor can be uninspired and just try to nickel and dime
every customer for every item/service.

The vendor can package everything in a one-time transaction.

The vendor can come up with some strategy that decides what
supplies/services should be marketed to the customer, what
should be handled by third parties, and what should be
"hands off".

Unless you have approved third party suppliers then you are open to your
customers using cheap dodgy ones and then complaining bitterly when it
breaks their kit. People installing dodgy addins on PCs that are
configured to run expensive scientific instruments is the sort of thing
that really annoys me. It doesn't take much to tip it over the edge.

The first two of these scenarios are uninteresting as they
don't require any fine degree of thought/evaluation. I am
more concerned with criteria that the vendor can apply to
making the decisions in the *third* scenario.

Even something as humdrum as engine oil you get manufacturers endorsing
one particular brand for their engines. And if you are daft enough you
can buy even BMW branded screenwash...

So, you are already demonstrating a resentment for the vendor(s)
who've tried (unsuccessfully?) to lock you into a supply regime.

I have a pretty good idea what it should cost.

I get perhaps a request every two weeks for a printer recommendation
that "doesn't use expensive ink" -- so, people are aware of this
(enough so to actively question about it).

But not enough of them to really matter.

But its not just printer ink. Or replacement battery packs.
Or distilled water cartridges. Or...

Obviously, how the customer views the monetary outlay is a
significant issue. If he thinks he can just pass it along
to *his* customer, he probably doesn't give it a second
thought (unless it becomes a significant portion of the
charges that his customer incurs and threatens to motivate
his customer to looking for alternate suppliers!)
Yes.

Similarly, the potential "consequences" of the purchase decision
weigh into it -- will this put some greater investment at
jeopardy?

And, the relative cost/savings ("investment risk") as well.
E.g., I'll often buy off-brand battery packs EXPECTING them
to have shorter times between charges *and* operational life
simply because I expect batteries to die often -- especially
for low duty cycle devices.

Hmm! I have a stash of batteries that have failed in high current drain
applications waiting to be used in clocks and low drain applications. I
made a cute but incredibly inefficient bistable voltage multiplier that
will only just light a white LED if the cell is half decent. Any that
can still light the LED do not get thrown out.

This is less likely to be encountered in "distilled water cartridges"
as the stakes are higher for the customer. Can a counterfeit
cartridge cause the machine to break? What is the (lost)
opportunity cost in that case? Can the counterfeit interfere
with the accuracy of the results? etc.

If we are talking about analytical equipment here then it is common for
larger companies to prefer to buy consumables from the OEM manufacturer
even if they could shop around and get the same range of things slightly
cheaper from 10-20 other companies. There is a cost to raise and process
invoices that can make it better to pay a bit more and know you are
getting approved consumables that preserve the warrantee.

In the same way that buying from RS or Digikey might not always (ever?)
be the cheapest source but you don't waste any time getting the part.

Again, I think it matters who is making the decision and their
relationship to the money/consequences. Being "given" thousands of
dollars of capital equipment (free toilet paper dispensers) in
return for being locked into a particular consumables supplier
(toilet paper) lets you avoid the sticky issue of justifying the
cost of all of that equipment (whereas the ongoing supplies just
looks like a normal cost of doing business)

This sounds like another clueless MBA trick where they shout look how
much money I have saved in the short term before the chickens come home
to roost and the long term costs of a lock in contract become apparent.
Such people have always moved onwards and upwards before the insanity of
their decisions becomes apparent.

Correct. And a savvy vendor will consider the potential for
lost sales and/or damage to reputation that ensues from this
sort of behavior. E.g., people dislike (current) HP printers
while, previously, their (laser) printers were respected and
cherished.

The latter were made by an entirely different company. "HP" is all that
remains of a once great brandname for scientific instruments and
computers - the good bits are now called "Agilent".

I'm not seeing that. I've seen people walking away from printers
(especially color/photo printers) completely and opting for
simple B&W printers. Want a photo printed? Go to your local
office supply store and have it printed while you wait
for *less* than the costs of supplies "at home" (and without
having to worry about dried out cartridges, clogged heads,
poor color accuracy, etc.)

I reckon some people are just there to be ripped off and the trick of
marketing and salesmen is to separate them from as much of their cash as
is inhumanly possible for as few of the companies goods. If you have
ever looked at their bonus schemes you will understand why.

I.e., IME, people are learning the printer lesson (which is why
it was such a good example). It's *their* money (not their
employers'). They run out of ink and price the new supplies...
and decide to discard the printer!

That can be a viable strategem if you buy certain models in the refurb
aftermarket with two sets of toner/ink cartridges. Not exactly very eco
friendly though. It annoys me that I can get a better price on Gillette
razor cartridges by buying a complete new razor Xmas special offer pack
than buying the consumables separately so that is exactly what I do.

I'd prefer to simply make the "what sort of business are you in"
decision and, unless there is some *really* strong motivation
for being in the "supplies business", delegate that activity to
some third party.

It is worth asking your customers what they want. Larger companies do to
some extent prefer to buy everything from the OEM unless you really
transparently are ripping them off.

But, you have to make it attractive enough for that third party
to *want* to take on that business (for some commitment period).
And, have to ensure that you don't then compete with them
(e.g., let *them* make all of the supplies and *you* purchase
them from them for the folks who insist on buying "from the
OEM")


Why is it the vendor's job to do this? Do auto manufacturers

If a customer puts unauthorised ink in their printer and it fouls up
they have no comeback on the manufacturer.

validate proper operation of their vehicles with fuel from
different vendors FOR THE REASSURANCE OF THEIR CUSTOMERS?
You buy fuel from Bob's Discount Gas Station and end up with
water in your tank and it's *your* problem.

Surely in that case it is Bob's problem since the goods he sold were not
of merchandiseable quality and he will be paying for your vehicle
recovery, warned by trading standards and eventually closed down for
repeat offences.

Exactly. And, to reassure them that you won't be undercutting
"their" market.

OTOH, you need some reassurances from them that they *will*
continue to support these supplies for some period of time.
Otherwise, your customers complain because they can't get
supplies for the device they purchased FROM YOU!

That is why larger companies prefer to get consumables from the OEM.

But, what obligation does the vendor have to prevent this?
I.e., they can hide all service information to make it
difficult for "unapproved" firms to attempt repairs -- though
that doesn't PREVENT someone from trying!

We just charge extra when the thing has obviously been savaged by a
moron. Our suppliers used to do it to us too. It was not uncommon to
return a unit to them that had multiple faults constructed of swapped
dead boards out of several units. Fault finding is a lot harder when
there are multiple unrelated faults present...

Does that sort of "monopoly" aggravate customers who feel
trapped into using "factory service" (at inflated rates)?
I.e., just like forcing them to buy ink from the manufacturer...

Again, what is the thinking that a *rational* firm should
undertake in making these decisions?

What we had was a service contract with various response times, parts
and labour as and when we can fit you in or nothing. AT&T & IBM went for
premium service whereas academic research groups would usually ring up
only after they had inflicted further damage with a soldering iron.

I know some larger companies that are very methodical about
evaluating new product offerings -- in terms of their expected
impact on sales of other, existing products. But, I think
they have "big numbers" to fall back on -- lots of history
in their markets and a good feel for how their customers
are likely to react to new offerings.

Unfortunately, customers do not necessarily tell you the truth even in
well controlled expensive marketing surveys. Worse still executives
ignore the warning signs when $$$ signs flash in their eyes.

I'm not sure how they would address something like this
"artificial dependence" as it seems to have two edges
to it (whereas a new product is just a cost-benefit
analysis in the customer's mind).

As a supplier if you can secure a worthwhile long term revenue stream
then it makes sense to do it. This is especially true if you can use it
provide some perceived added value to your customers in the process (ie
sell them other bits an pieces, upgrades, addons, new kit whatever).

 

[Don Y]

Hi Martin,

So were they cross subsidising the initial hardware or design and
development cost against the long term sales of consumables?

No. Just looking to make *more* money. It's possible they didn't
have any real "design pipeline" to rely on for continued revenue
and opted to "sell water" to keep paying the bills. If that's
the case, then woe to the customers who purchased the
soon-to-be-unsupported device! :< (I've no idea what became
of the company or its products)

Again, I think they looked at it in terms of costs that could
be PASSED ON. E.g., if a printer ink cartridge effectively
sets the price per printed page at $0.10/page/color, Joe Consumer
sees that as expensive -- even if he is only printing a dozen
pages a week.

OTOH, spending $0.10 on *water* to run a clinical assay and
doing hundreds per week can be seen as inconsequential -- if
each of those $0.10 are passed along to different patients,
etc. as part of the cost of the test.

[The issue then becomes one of keeping the cost of the
test low enough that you can still make money at it given
negotiated rates with insurers, etc.]

That is a partly legitimate thing to do to get expensive capital kit
into the market. The other common model is to sell very expensive units
to the early adopters or people who absolutely need maximum performance
at any price and amortise most of the development costs on them.

They tend to whinge a bit if the price falls too steeply, but have
usually forgotten before the 5 year renewal cycle comes around. This
sort of assumes that your new kit is sufficiently interesting.

You would be surprised what I have seen growing in sterile eye wash
bottles and bulk ultra pure distilled water containers.

[Like making harvesting sea-salt illegal to "protect" the
spice trade]

When does the customer start to *resent* the vendor because
of this sort of practice?

You have to look at the total cost of ownership. If you're willing to
assume the risk of incompatibility, go for it.

That's what the *consumer* has to do. I'm interested in the
vendor's outlook on the process. I.e., you tie a customer to
your supplies ARTIFICIALLY and when do you think the customer
will start resenting this?

The suppliers marketing people have worked out that Job public is pretty
stupid and will buy the cheapest printer without realising that a new
set of inks cost more. It is a loss leader on the hardware.

Same is true for mobile phones - they damn near give the phone away to
lock you into a long term contract.

Replace "public" with "officer of large corporation" (responsible for
making purchasing decisions). The vendor still has to consider how
his customer will view the transaction.

Sometimes you have to wonder how many liquid lunches and free overnight
golf sessions some of these executives had from corporate hospitality
before signing off on insanely expensive lock-in deals.

I have to try hard not to let cynicism overwhelm reason here... :>
but, I think it boils down to "it's not their money". And, there is
enough obfuscation in the process that they aren't easily "blamed"
for these decisions.

I was talking with a guy responsible for a few hundred $M expansion
project at a local hospital and listened to some of the decisions
that had been made with growing incredulity. When he was done,
I simply stated, "if this was *your* money, is this how you would
'invest' it?". He couldn't even look me in the eyes *or* respond.
Yet, he showed no compunction in board meetings when he actively
advocated this approach.

[I'm not savvy enough on accounting trickery to claim to understand
why its "better" to do things less efficiently... :< ]

Unless you have approved third party suppliers then you are open to your
customers using cheap dodgy ones and then complaining bitterly when it
breaks their kit. People installing dodgy addins on PCs that are
configured to run expensive scientific instruments is the sort of thing
that really annoys me. It doesn't take much to tip it over the edge.

I think if the "fault"/failure is obviously tied to their actions,
this is easier to deal with. I.e., use bad ink and printhead needs
to be replaced. They can piss and moan that it costs so much
to *replace* the printhead. But, they know that it is *their*
action that resulted in the damage.

OTOH, imagine the ink use resulting in a power supply failure
(insane... that being the point of the example!). The customer
would find it harder to accept that his use of off-brand ink
could have anything to do with the power supply's failure.
*Then*, it looks like you are blaming *your* defect on something
the customer did that is not actually causal. (even if there
*is* some way that the power supply could fail as a result of
ink usage).

Even something as humdrum as engine oil you get manufacturers endorsing
one particular brand for their engines. And if you are daft enough you
can buy even BMW branded screenwash...


I have a pretty good idea what it should cost.

Even if you *don't* know what it "should" cost, you can evaluate
the cost of the *capability* and its actual value to you! E.g.,
using an all-in-one printer as a cheap photocopier might make
a $0.10/page copy-cost acceptable if the alternative is a trip
out to a store (and a comparable $0.10/copy fee!). OTOH, spending
$10.00 on ink costs to print a 100pp document might exceed your
tolerance for waste!

[I keep several different printers with different costs-per-page
to address this convenience-vs-economics tradeoff]

But not enough of them to really matter.

Perhaps not to the printer manufacturers. OTOH, I can say that I
know of only one household in the neighborhood that still uses
an inkjet printer -- the woman running the HOA uses it to
print flyers (again, it's not *her* money that she's spending on
supplies! :-/ )

Hmm! I have a stash of batteries that have failed in high current drain
applications waiting to be used in clocks and low drain applications. I
made a cute but incredibly inefficient bistable voltage multiplier that
will only just light a white LED if the cell is half decent. Any that
can still light the LED do not get thrown out.

I dislike battery powered devices that don't see regular use -- simply
because the batteries end up *flat* when you "need" it. Another
PMP just bit the dust yesterday (integrated battery refusing to
take a charge).

If we are talking about analytical equipment here then it is common for
larger companies to prefer to buy consumables from the OEM manufacturer
even if they could shop around and get the same range of things slightly
cheaper from 10-20 other companies. There is a cost to raise and process
invoices that can make it better to pay a bit more and know you are
getting approved consumables that preserve the warrantee.

But the instrument could simply have used available (bulk)
water supplies in the lab. Why not artificially make the device
battery powered and then go in the battery sales business? :<

The point of my question is to try to identify criteria that
*could* be used to make the to-supply or not-to-supply decision.
Then, wrap each with an honest appraisal as to whether it is
a simple "rationalization" or a "valid issue".

Consider portable glucometers. The patient bases his lifestyle
(and the doctor bases his treatment regimen) on the results
reported by the glucometer. Use an "off brand" test strip
and the glucometer has no way (?) or knowing/recording that.
And, the patient doesn't *retain* used test strips! So,
you rely completely on the records from the glucometer to
base these treatment/lifestyle decisions. *Surely* this
argues in favor of tying the supplies to a particular
manufacturer (even if it is not the same manufacturer
that produced the glucometer).

[even moreso when the cost of the supplies is often paid by
an insurer, etc.]

OTOH, toilet paper for "proprietary" TP dispensers have
pretty much the same constraints. The dispenser has no way
of recording which TP was used to wipe <whomever's> *ss!
"Customers" (users?) don't *retain* used TP (ick! this
is getting disgusting!). So, there is no way of tying
"substandard performance" (Help Wanted: toilet paper
evaluator. No skills necessary!) to a particular set of
supplies.

Yet, in the TP case, you can freely choose between suppliers
based on cost, availability, "softness", kickbacks, etc.
Trying to artificially tie supplies to the dispenser is
dubious, at best.

In the same way that buying from RS or Digikey might not always (ever?)
be the cheapest source but you don't waste any time getting the part.


This sounds like another clueless MBA trick where they shout look how
much money I have saved in the short term before the chickens come home
to roost and the long term costs of a lock in contract become apparent.
Such people have always moved onwards and upwards before the insanity of
their decisions becomes apparent.

Yup. But that doesn't stop them from making those decisions!
People who lease automobiles, etc. It's not uncommon for firms
(governments!) to sell off property and turn around and LEASE
it back! With lease terms that make it clear that they are
handing the proceeds of the sale *back* to the buyer! (would
you do the same with your home?)

Accounting rules distort the decision making process.

The latter were made by an entirely different company. "HP" is all that
remains of a once great brandname for scientific instruments and
computers - the good bits are now called "Agilent".

Yup. Makes you wonder what Bill H and Dave P think of the situation.

I reckon some people are just there to be ripped off and the trick of
marketing and salesmen is to separate them from as much of their cash as
is inhumanly possible for as few of the companies goods. If you have
ever looked at their bonus schemes you will understand why.

I suspect much of the marketing is geared to exploit laziness/inertia
in the buyer. I.e., easier to buy more supplies for something you
*have* than to start on the tedious process of making a new
purchase decision.

E.g., I will gladly repair TV's, appliances, etc. around the house
to save myself the chore of having to look for a suitable
replacement (which, sooner or later, will *also* need to be
replaced/repaired).

That can be a viable strategem if you buy certain models in the refurb
aftermarket with two sets of toner/ink cartridges. Not exactly very eco

Yup. I rescue printer discards *if* they come with adequate
"supplies". When the supplies are exhausted, I discard the printer.
Since the printer was already headed for the tip when I rescued it,
I've not made matters any worse than they would otherwise have been.

OTOH, it does take up a fair bit of room to store spare toner
cartridges, imaging units, fusers, etc. in anticipation of
future failures! :< (though I don't spend for anything
other than paper!)

friendly though. It annoys me that I can get a better price on Gillette
razor cartridges by buying a complete new razor Xmas special offer pack
than buying the consumables separately so that is exactly what I do.

I buy the 52-packs of disposables. :>

It is worth asking your customers what they want. Larger companies do to
some extent prefer to buy everything from the OEM unless you really
transparently are ripping them off.

IME, customers rarely know what they *want*. Rather, they know what
they *don't* want -- AFTER you give it to them! :< I think you
have to understand their businesses and get inside their head
if you want to make a truly "informed" decision. Otherwise, its
just guesswork.

If you can come up with an *honest*, rational set of criteria
for making the supplies decision, then I think you have a chance
of rationally presenting that to the customer and getting their
buy-in. But it can't be hand-waving or smoke-and-mirrors.

Everyone *knows* (even if they don't consciously admit it) that
you are in business to make money. By extension, that the
product they are purchasing wouldn't exist if not for this
fact! What I think they object to is you making too *much*
money -- OFF OF THEM! (especially if there is no obvious
value added to justify that profit)

We just charge extra when the thing has obviously been savaged by a

I think that can be a slippery slope. Who makes that decision?
Who decides how *much* extra to charge?

moron. Our suppliers used to do it to us too. It was not uncommon to
return a unit to them that had multiple faults constructed of swapped
dead boards out of several units. Fault finding is a lot harder when
there are multiple unrelated faults present...

Yes. When you're in business, you are often at the mercy of your
customers. <frown> I've worked in businesses where they would
go to significant lengths to discourage any sort of tampering
(repairs). Conformal coating, full custom chips, etc. And,
you'd still come across cases where someone *thought* they
were smarter than they actually are! :<

What we had was a service contract with various response times, parts
and labour as and when we can fit you in or nothing. AT&T & IBM went for
premium service whereas academic research groups would usually ring up
only after they had inflicted further damage with a soldering iron.

I think you can set service policy to cover those costs -- even
if you treat the products as "disposable" (I see many printers
where this design seems to be de rigeur -- as if you can just
see the service depot pulling the logic board off the unit and
tossing the entire mechanism into the trash!)

Unfortunately, customers do not necessarily tell you the truth even in

Exactly. It's too easy for a customer to be "lead" -- especially in
focus groups, etc. I think most customers truly don't know what
they want. They have some general idea. But, can rarely put it
into concrete terms.

OTOH, *hand* them something and they can tell you what they
*don't* want (about it!).

well controlled expensive marketing surveys. Worse still executives
ignore the warning signs when $$$ signs flash in their eyes.


As a supplier if you can secure a worthwhile long term revenue stream
then it makes sense to do it. This is especially true if you can use it
provide some perceived added value to your customers in the process (ie
sell them other bits an pieces, upgrades, addons, new kit whatever).

That last bit is the trick. If it looks like you've just
"got 'em by the b*lls", I think you breed resentment.

 

[mike]

[E.g., Joe Computer User purchasing printer supplies
from the manufacturer instead of Bob's House-of-Clones]

Do you believe that profit is unethical?
Would be silly to try to compete selling a razor that
used someone else's blades.

That "chip" in your printer ink cartridge does little
to improve the quality of your printouts, but it goes
a long way toward putting gas in the CEO's private jet.
And greed is what makes the world go 'round.

 

[Don Y]

Hi Walter,

I'm curious as to the ethical issues (opinions) regarding
tying customers into a particular supplier ("yourself")
for ongoing product "consumables".

[E.g., Joe Computer User purchasing printer supplies
from the manufacturer instead of Bob's House-of-Clones]

Ignore the case(s) where there are significant liability
issues involved (e.g., replacement parts for aircraft,
chemicals for medical assays, etc.).

Clearly, there are certain cases where the supplies can
arguably affect the perceived quality of the product (*your*
product) where you might argue that you have a financial
interest (reputation) in preventing your product's image
(and that of your firm) from being sullied by some off-brand
supplier.

(This was an argument printer ink suppliers tried to float)

Look at the ethics from the extremes and see where the
dark gray starts to become white enough to be acceptable.

That;s what I've been trying to do, systematically.
I've tried to identify common products that have
"ongoing" supplies streams. Then, making an objective (?)
assessment of how the nature of that stream might have
been (or currently be) justified as "closed" -- as well as
how well it has *remained* "closed"!

I've also tried to identify cases where vendors *could*
have closed their supplies off and didn't -- was that
because they felt no need to do so? Or, had more business
than they could handle (and risked losing their primary
product market if they couldn't keep up with demand for
"supplies")

For example there are third party replacements and then
there are copies of the reverse engineered originals. One
extreme would be a movie DVD from a street vendor.

Yup. I interviewed with a company decades ago whose
business model was blatantly copying other products
("work-alikes"). Didn't seem like a very rewarding way
to base a career! :<

 

[josephkk]

Hi,

I'm curious as to the ethical issues (opinions) regarding
tying customers into a particular supplier ("yourself")
for ongoing product "consumables".

[E.g., Joe Computer User purchasing printer supplies
from the manufacturer instead of Bob's House-of-Clones]

Ignore the case(s) where there are significant liability
issues involved (e.g., replacement parts for aircraft,
chemicals for medical assays, etc.).

Clearly, there are certain cases where the supplies can
arguably affect the perceived quality of the product (*your*
product) where you might argue that you have a financial
interest (reputation) in preventing your product's image
(and that of your firm) from being sullied by some off-brand
supplier.

(This was an argument printer ink suppliers tried to float)

But, that often can be a thinly veiled rationalization for
locking the consumer into *your* supplies.

When does this just get to be *too* outrageous? E.g., I
know of a medical instrument supplier that sold "proprietary"
distilled water (!) -- in tamper proof, one-time-use "modules".
(Do they *really* think no one can supply distilled water
to whatever degree of purity they claim to need??)

When does the customer start to *resent* the vendor because
of this sort of practice?

(I used the printer ink analogy as it seems that customers
are *finally* "getting wise" to that false economy -- $99
printer with $80 ink cartridges!)

I.e., what would a *rational*, *fair* set of criteria be
for making this decision (vendor-side)? How do you *not*
sound "pissy" when you disclaim the use of any "unapproved"
supplies as voiding the warranty?

You are kidding yourself. The very concept applies ONLY to a "market" in
which "full knowledge" is readily available.

As a distinctly separate issue, how do you extend this reasoning
into supporting third-party *service*?

Primarily a con job.

 

[josephkk]

Of course!  But designing your instrument so that it will
only *work* with "approved distilled water cartridges"
seems a bit disingenuous.  Deliberately making an excuse
to charge people for a supply that they could otherwise
get from any number of *reputable* suppliers.

If you make it refillable, what's to keep the customer from using tap
water? Tap water is the cheapest solution yet. Why not design your
product to make distilled water unnecessary?

[Like making harvesting sea-salt illegal to "protect" the
spice trade]

When does the customer start to *resent* the vendor because
of this sort of practice?

You have to look at the total cost of ownership. If you're willing to
assume the risk of incompatibility, go for it.

That's what the *consumer* has to do.  I'm interested in the
vendor's outlook on the process.  I.e., you tie a customer to
your supplies ARTIFICIALLY and when do you think the customer
will start resenting this?

If you don't believe your control of the supplies adds any value, then
price the instrument so you don't need to make your profit on the
razor blades.

To return to the printer ink analogy... sell *your* ink at prices
comparable to the third-party suppliers and the customer no longer
has a gripe with you.  OTOH, sell yours at an artificially inflated
price and the customer starts to resent his relationship with you!



In *some* printers, that is the case.  In others, the only technology
in the "tanks" is a metering device that ensures the tank will
not be refillable.  Extra cost put there *just* to ensure the
user doesn't buy someone else's supplies.


toilet paper with proprietary dispensers, etc.


This is a *rational* explanation that a vendor can engage in.
However, the customer can see it differently:  you are *forcing*
me to purchase these substandard supplies because you have
artificially inflated the cost of "genuine" supplies.

As a vendor, you're foolish to reassure yourself with these
sorts of rationalizations -- once your customers come to
*different* conclusions!



*We* are the vendor.  We don't want customers pissing and moaning
because they feel forced to buy something from us that, in their
minds (or, in the minds of third parties INFLUENCING THEM), they
should be able to purchase from other "less expensive" sources.

Validating third party suppliers just gives the customer another
outlet for his cynicism:  ("Of *course* they refuse to validate
Bob's Discount Outlet -- because Bob's prices are *so* much
lower than the other suppliers they've crawled in bed with!")

Do a FMEA review (Failure Modes and Effects Analysis) of your product
and supplies to determine what's critical to product function,
reliability, etc., and what's not. Then you have an explanation for
why certain items need to be controlled, either by you or a third
party.

If you have a small, manageable number of customers, work with them to
understand who their preferred suppliers are. Based on your analysis,
you should be able to tell these suppliers what's important and why.

Let me throw a curve ball into the mix:
Suppose that we are dealing with a medical device that _must_ function
safely and the same way, not only in America, but in Europe, Mexico, South
America, Austrailia, India and Asia. The prepackaged distilled water
makes a lot more sense in this scenario. The ethics gets a whole lot more
mixed in this case. Not at all the same as inkjet or laser printer
supplies.

Just an alternate line of thought.

 

[josephkk]

Incidentally does anyone know of Canon BCI-6 cartridge clones that
actually work adequately?

I have someone to ask. I'll let you know.

 

[Don Y]

Hi Walter,

One argument that I have heard from consumers and suppliers is
there is a benefit to having a single supplier for a product because
part of the payoff is a single supplier is responsible for a products
functioning correctly.

Sure! But, there's a limit to that sort of reasoning.
You don't purchase your *electricity* from the device vendor
(because electricity is a commodity). Do you buy your
compressed *air* from a particular vendor?

Barring (intentional?) incompatibilities in dispensers, etc.,
is there some advantage to buying your toilet paper from the
guy who sold you the dispensers? Is there some advantage to
DENY YOURSELF the benefits of competition in the marketplace?

When I (we) purchase products, we look carefully at the
supply issues. Does this camera need some special sort of
battery (since we KNOW the battery will need replacement
before the camera has served its useful life)? Does
this coffee maker need some special sort of filter? etc.

I don't complain if my cassette deck uses a special belt
that I can only purchase from the manufacturer. I don't
*expect* belts to be universal. But, I also don't expect
them to fail very often!

OTOH, I am constantly annoyed by proprietary power supplies
that seem to go to elaborate lengths to be mutually
incompatible -- despite the fact that there is the same
amount of "potential" :> behind the electrons! "Yes, I
know you want to make sure I don't plug the wrong power
supply into your device. And, as a result, have rendered
the device unusable if I misplace that power supply -- as
you don't continue to make them available 'indefinitely'.
Is there some reason you couldn't design the power
conditioning circuitry to be tolerant of a wider range of
inputs? EVEN IF YOU REFUSE TO WORK IN THOSE CONDITIONS?"

In effect we have a consumer paying so
someone else is responsible. This was IBM marking to company
executives 40 years ago and some printer companies today.

Again, making these sorts of decisions without concern for
what your customer is likely to think about them is done
at some peril. Yes, you might maximize profits on the
short term -- and lose the *market* in the long run!

[Anyone want to buy a microchannel machine??]

I'd like to be able to rationally argue for and against
particular "supplies" decisions with clients so they are
at least aware of both sides of the issue and don't succumb
to the siren's lure...

 

[Don Y]

Hi Joel,

Gee, sounds like SodaStream: They "lease" you a CO2 cartridge, and
there's a very strongly-worded contract you have to sign stipulating
that you won't refill the cartridge... since of course they charge
something like 10x per refill as a regular gas vendor would.

I think some of the printer companies have taken a similar
approach. I.e., the cartridge is "licensed" to you, not
*sold* to you! :-/

They have a custom nozzle, but you can find adapters to standard nozzles
on the Internet.

Yup. This is the risk any company takes when it adds artificial
constraints to lock up a market.

One company selling them was sued out of business by

And, if the market is lucrative enough, another pops up in
its place. Now the original vendor is spending resources
trying to locate, identify and prosecute "offenders" -- all
because it chose to artificially protect a market segment
to itself.

Meanwhile, their competitor is focused on coming up
with a better *product*!

SodaStream, so now the guy(s?) left selling them have these big
disclaimers about how to purchase their products you're agreeing that
you own the CO2 cartridges and are in no way attempting to violate
SodaStream's contract with you.

A (very wise) client told me many years ago that you should
*want* your vendors to make money -- otherwise, they won't
"vend"! :> The trick is making sure they don't make *too*
much (of YOUR!) money!

It is pretty ridiculous overall and this sort of marketing really turns
me off, but there's so much choice in soda pop (and printers) that I
just choose to shop for other models.

Exactly. You want to give me a "free printer"? Great! When the
supplies run out, I'll discard it. You've taken the loss -- on the
hope of an eventual "return". I've just ensured that return won't

I do wish more people would
realize the artificial costs of choosing such proprietary vendors,
though...

<grin> People are short-sighted. "Service contracts", etc.

"Would you like to buy the 3 year extended warranty on that
$1000 TV, sir?"

"Huh? You mean the quality is so POOR that it's not likely
to LAST 3 years??"

"Um, well, no, but..."

"So, the quality is *great* and you just want to charge me an
extra $100 because you 'like me'???"

"Um, gee, um... let me get my manager..."

(sigh) We went looking at new refrigerators a while back.
A few kilobucks and they don't even claim you'll see a
"long productive service life". Sheesh! I'll stick to the
old one and laugh at the folks with "refrigerator vanity" :>

You do see an occasional vendor trying to gain business by bucking the
trend as well, which is good -- Kodak was betting its printer business
largely on a "cheap ink" campaign, it seemed, and I've seen ads on TV

for mops that have washable/re-usable pads and refillable (with any
detergent you want) reservoirs to compete with the one where these items
are single use and proprietary.

Like the "classic" mop that we use to do our floors? :>

 

[Don Y]

Hi Mike,

[E.g., Joe Computer User purchasing printer supplies
from the manufacturer instead of Bob's House-of-Clones]

Do you believe that profit is unethical?

There are two sides to every "transaction". What seems
"appropriate" to one might not be viewed in the same
light, to the other.

If the transaction is completely voluntary, then each side
can impose whatever constraints they want on how they
choose to evaluate the potential transaction.

You have a terminal disease. I've got a pill that will
prolong your life by one day. It's $1000. (It might
only cost me $0.03 to make but that should be NO CONCERN
OF YOURS!!!)

Is this ethical? ("Hey, no one is FORCING you to buy it!")
I wonder what your thinking will be on the day your bank
balance drops to $999?

While you're waiting in line, another guy shows up driving
a Rolls Royce. I charge him $10,000 for the very same pill.
Is *this* ethical?

Then, a homeless chap walks in -- and I give him the same
pill FOR FREE -- writing off $1000 on my taxes as a
"charitable contribution". Is *this* ethical?

[I care not what your answers to the questions are -- they
are rhetorical]

Now, how do each of the parties in this imaginary scenario
view these transactions?

Would be silly to try to compete selling a razor that
used someone else's blades.

Why? If you are making a handsome profit on razors, what
do you care who makes the blades? You're just happy that
*someone* is making the blades -- otherwise, no one would
be buying your razors!

That "chip" in your printer ink cartridge does little
to improve the quality of your printouts, but it goes
a long way toward putting gas in the CEO's private jet.
And greed is what makes the world go 'round.

Until people arbitrarily change their idea as to how
"essential" that ink cartridge is! With artificially
created dependencies, you risk your market disappearing
overnight -- it's not a *real* need. Someone can
offer a product that doesn't have that same need.
Or, customers can decide they can live without the
artificially inflated costs.

OTOH, that CEO's jet uses *real* aviation fuel to get
aloft. And, the guy who sells it probably isn't interested
in taking hundreds of ink cartridges "in trade"! :>

 

[mike]

Until people arbitrarily change their idea as to how
"essential" that ink cartridge is!

Marketers have known for centuries that you sell more
if you put as much distance as possible between the cost
and the benefit. They give you the printer free as a
"benefit" to buying that new computer system.
The customer didn't choose that printer, the vendor did.
The kids pressing the print button have no clue what it costs.
If there was a coin slot on the printer that required you to
put in a quarter for every page, usage would be much different.
You'd also have to put in a few quarters every day to account
for the plugged heads if you didn't use it.

I have a monochrome laser printer. The heads are never plugged.
There are months that I never turn it on.

Society has developed into a bunch of people who want
instant gratification. Don't matter what it costs, I want it.
I don't see that changing.

The best example of uselessness is the cell phone.
I can think of a dozen people who NEED one.
Tow truck driver. Doctor on call. Real estate agent.
Sure, there are others, but having five billion of them
is EXCESS.
The majority of us could get by just fine with an emergency phone
that had no recurring fees and we paid a dollar a minute.
But that wouldn't pay for Verizon to sponsor sporting events
or put gas in the corporate jet.

The cell is an excuse not to plan anything.
People think they can call to say they're gonna miss their
commitment and it's ok to waste my time, 'cuz they called.
Well, it's NOT ok to waste my time. Get your ass over here
when you said you would.

I don't think the cell providers need to worry about
society coming to its senses and their market disappearing.



With artificially

created dependencies, you risk your market disappearing
overnight -- it's not a *real* need. Someone can
offer a product that doesn't have that same need.
Or, customers can decide they can live without the
artificially inflated costs.

No, they can't. They just hand over the credit card and continue
with mindless chatter on their cell phone as they drive the SUV
to the upscale clothing store.

 

[Don Y]

Hi Mike,

Marketers have known for centuries that you sell more
if you put as much distance as possible between the cost
and the benefit. They give you the printer free as a
"benefit" to buying that new computer system.
The customer didn't choose that printer, the vendor did.
The kids pressing the print button have no clue what it costs.

Sure! Until they have to replace the ink and discover
how much it costs! After the *second* time, they probably
have a good feel for how *little* use they got out of the
printer before having to revisit the ink supplier.

If there was a coin slot on the printer that required you to
put in a quarter for every page, usage would be much different.
You'd also have to put in a few quarters every day to account
for the plugged heads if you didn't use it.

I have a monochrome laser printer. The heads are never plugged.
There are months that I never turn it on.

Yup. I have two monochrome lasers and a color laser -- in
addition to the "wax printer". And, a little "photo printer"
that sees rare use. None of the supplies ever "spoil" from
lack of use.

Society has developed into a bunch of people who want
instant gratification. Don't matter what it costs, I want it.
I don't see that changing.

I *do* -- at least in certain areas. I.e., folks will print
stuff at work instead of at home. Or, learn to live without
paper copies entirely!

I prepare a lot of documentation. I dislike reading it "at"
the computer. OTOH, I can't afford to be printing out 50 page
copies every day just to see what I've done -- and what remains
to be done!

So, I tolerate the "electronic" review of the document for
most of my work. Periodically, I print a *monochrome* copy
(printer has a duplexer so it takes half as much paper as
it would, otherwise) that I can sit down and mark-up. When
I am close to "done", I print a color laser copy and do the
markups on that, instead. Once everything is ready to go,
I'll produce final copies on the "wax" printer.

The best example of uselessness is the cell phone.
I can think of a dozen people who NEED one.
Tow truck driver. Doctor on call. Real estate agent.

If these people NEED them, then are you implying that,
previously, they were INCAPABLE of performing their duties?

Sure, there are others, but having five billion of them
is EXCESS.
The majority of us could get by just fine with an emergency phone
that had no recurring fees and we paid a dollar a minute.

My other half carries just such a phone (I think it's 25c/min)
for "emergency" use. *Real* emergencies ("Don, I'm at the
corner of WALK and DON'T WALK and the car won't start!").

I also have a couple of phones -- that I use as WiFi terminals
(no phone service) and "911 phones" (for "emergencies" that
the authorities would recognize as such -- not "car trouble")

:>

But that wouldn't pay for Verizon to sponsor sporting events
or put gas in the corporate jet.

The cell is an excuse not to plan anything.

The same can be said of the (regular) phone. Or email. Or...

I don't accept phone calls from clients. Too easy for them
to waste my time while they *think* about what they actually
want to ask me. "Fishing expeditions"

Think about what you want to know. Put your thoughts on
paper. Mail/email them to me. Let *me* think about my
reply (!). And, I will expend the same effort committing
that reply to paper for *your* review.

[and we both have a record of the communication -- fewer
"misunderstandings"]

People think they can call to say they're gonna miss their
commitment and it's ok to waste my time, 'cuz they called.
Well, it's NOT ok to waste my time. Get your ass over here
when you said you would.

I don't think the cell providers need to worry about
society coming to its senses and their market disappearing.

Dunno. I don't pretend to understand the obsession folks
have with their cell phones. I don't answer the *land* line
so the idea of "jumping" because someone decided to ring
my cell phone just seems "pathetic" (how many calls really
NEED to be answered EXACTLY when placed regardless of where
the recipient is located? Gee, what would happen if he
was in a poor coverage area? Would the world come to an end??)

We've talked about using paint additives to cut down on
RF leakage, here (WiFi, cell phones, etc.) but are unconvinced
of its effectiveness.

[I wonder what the legal ramifications of doing this in a
*business* might be?]

No, they can't. They just hand over the credit card and continue
with mindless chatter on their cell phone as they drive the SUV
to the upscale clothing store.

(sigh) You're even more cynical than I! :>