Why Is Printer Ink So Expensive?
Why is printer ink so expensive? Not because it costs a lot to make. A cartridge that costs HP
Why is printer ink so expensive? Not because it costs a lot to make. A cartridge that costs HP between $2 and $8 to manufacture sells for $30 to $60 at retail. The markup runs somewhere between 5x and 20x. One consumer weighed his HP 962 XL cartridge before and after, calculated the ink inside, and arrived at $471 per pound. That is more expensive than high-end scotch, comparable to French perfume, and only begins to look reasonable next to caviar and gold.
The price is not about the ink. It is about the printer you already own.
You Already Bought the Razor
Printer manufacturers sell printers at cost, sometimes below cost, because they make their money on cartridges. HP, Canon, Epson, Brother: none of them are trying to profit from the $150 machine in your office. They are trying to lock you into a recurring purchase you cannot avoid.
HP’s printing division generates around $18 billion in annual revenue. The operating margin hovers between 17% and 20%. The personal computer division, by contrast, runs margins of 5% to 6%. The difference is ink.
This approach has a name: the razor and blade model. Sell the handle cheap. Make the money on refills.
The Gillette Myth
King Camp Gillette did not invent this strategy, despite what every business school textbook claims.
Gillette was a travelling salesman in the 1890s when his boss, William Painter, gave him career advice. Painter had invented the disposable bottle cap. “Why don’t you try to create something like the Crown Cork?” he said. “Something that’s thrown away after it is used. The customer keeps coming back for more.”
Gillette spent eight years developing a disposable razor blade. But here is the part the textbooks skip: during the patent years, from 1904 to 1921, Gillette sold razors at a premium. The original Gillette Safety Razor cost $5, which was half the average worker’s weekly wage. He was not giving away the handle to sell the blades. He was selling both at high prices because he had patent protection.
A 2011 University of Chicago Law Review paper examined the actual history and concluded that Gillette only adopted something like the razor-blade model after the patents expired in 1921, when competitors flooded the market and forced him to compete on price.
The model named after him is a myth he did not practice. But the strategy works, which is why everyone from HP to Sony to Keurig uses it now.
The Playbook
Printer ink is the textbook example, but the playbook runs across industries.
Sony lost roughly $60 on every PlayStation 4 sold. Microsoft did the same with Xbox. They make it back on game sales, subscriptions, and licensing fees. The console is not the product. The ecosystem is.
Keurig sold coffee makers cheap and made money on pods. The $3.7 billion K-Cup market attracted competitors selling cheaper pods, so Keurig fought back. In 2014, the company launched Keurig 2.0 machines with DRM technology that blocked any pod without a Keurig-approved chip.
It backfired immediately.
When Lock-In Becomes Hostage-Taking
Sales of Keurig machines dropped 23% in a single quarter. The share price fell 25% since the start of 2015. Customers filed lawsuits. Third-party pod makers sold plastic clips that tricked the scanner. CEO Brian Kelley went on an earnings call and admitted defeat.
“We were wrong,” he said. “We underestimated the passion the consumer had for this. We missed it. We shouldn’t have taken it away.”
Keurig killed the DRM and brought back the reusable My K-Cup. The product that gave customers freedom to use any coffee they wanted was the thing Keurig had eliminated to protect its margins. It took a 23% sales collapse to reverse the decision.
HP has learned nothing from this. Through firmware updates and software “security” measures, HP printers detect and disable non-HP cartridges. HP justifies the restrictions by claiming third-party chips could carry malicious code. The security risk is theoretical. The profit motive is not.
Why You Keep Paying
The economics only work because of switching costs. Once you own a Canon printer, you need Canon cartridges. Selling the printer means losing any investment in the device, learning a new system, and risking compatibility issues with your computer. Most people just buy the cartridge.
This is the sunk cost fallacy working in the manufacturer’s favour. You already spent $120 on the printer. Buying the $50 ink feels like protecting that investment. The rational move would be to throw the printer away and buy one with refillable tanks, but most people do not do the maths.
Manufacturers know this. They sell printers with “starter cartridges” that contain a fraction of the normal ink volume, forcing you into a replacement purchase within weeks. Some printers use more than half their ink on “maintenance” like printhead cleaning, especially if you turn the device off between uses. Consumer Reports found that certain models lose the majority of their ink to internal functions you never asked for.
The Alternative Nobody Buys
Epson’s EcoTank and Canon’s MegaTank printers use refillable reservoirs instead of cartridges. A bottle of ink costs a fraction of a cartridge price and lasts far longer. The cost per page can drop by 90%.
The catch: the printers themselves cost $250 to $400 upfront, several times more than a cheap inkjet. Most consumers see the sticker price and walk away, even though the total cost of ownership is dramatically lower over time.
The razor and blade model depends on consumers making short-term decisions. It works because they do.
Sources
- TechCrunch: Keurig CEO Blames Coffee Pod DRM For Falling Sales
- The Register: Keurig to Drop Coffee DRM After Boss Admits We Were Wrong
- HP Inc. Fiscal 2025 Q4 Results
- Techlicious: HP Printer Ink Is Even More Expensive Than You Might Think
- University of Chicago Law Review: The Razors-and-Blades Myth(s)
- Smithsonian National Museum of American History: Gillette Razor Blade
