Business services Dec, 07 2012

Fulfilling your entrepreneurial dream

Owners of refill cartridges business not only earn profits but also they can draw satisfaction of operating a socially responsible business which helps in reducing the carbon-footprint. Read on to explore more...

By Rita G Chauhan
Sub-Editor
Fulfilling your entrepreneurial dream

Increased usage of computers and printers for personal and professional printing needs has escalated the demand of printer cartridges as well. Cartridges are the printer accessory which contains ink that gets spread on a paper while printing. Once, the ink has been exhausted, they need to be replaced. People either buy new cartridges or get it refilled by the vendor. It is noteworthy that it can take hundreds of years for a printer cartridge to decompose and using a refilled cartridge is more environment friendly. As consumers are becoming increasingly aware about ‘green products’,  the trend of buying re-filled cartridges instead of new, is fast becoming popular among them. Due to the growing market demand for re-filled cartridges, several companies have ventured into this business space. Currently, as per estimates, the cartridge industry in India has turnover of Rs 3, 000 crore. The industry is clocking 30 per cent growth rate and it industry is highly fragmented with dominance of local retailers and few major players.  

Growth drivers

 There are many factors that are significantly contributing for the growth of cartridge refilling industry. One of the main reasons for the growth is the price difference between re-filled cartridges and original one. The high cost of original equipment manufacturer (OEM) cartridge has resulted in the emergence of re-fillers and re-manufacturers who have access to better raw material.  The other factor is its eco-friendly nature which has contributed significantly to the growth of this sector. Further, repeat business, high gross margins also make it a lucrative business segment.  Thus, the industry offers excellent business opportunity.

Key Players

The cartridges refilling industry is still small in India but will have been going to be huge in near future. The entry of organised retailers has provided credibility to this fragmented industry and has driven out the negative perception of the consumers. The prominent players like Cartridge World, Cartex, Re-feel, Desmat Cartridge Xpress, Print Studio, and ProDot India have gained promimence in this space.

Franchising biz opportunity

The computers and printers have become part of our daily lives. The demand for inexpensive refilled cartridges is increasing in all Indian cities and towns, whether big or small. This has led a number of manufactures and brands to vying reach out to every nook and corner of India. Several players have opted for franchise business model to build up their presence across markets. Inspired by huge potential in this sector Cartridge World has pumped up their expansion plans and already has been appointed over 100 franchisees across the country. Hemal Manek, Head - Network Development, Cartridge World says, “The franchise business model helped us reach and educate customers quickly. Presently, we are operating all the stores successfully across 46 cities and are looking for partners to expand further”. Cartridge Wale’s Director Pradeep Chaturvedi shares, “We have mastered the formula and now it can be replicated. Franchising is all about replicating success. We have the products, technology and know how in place, so our franchisees will not have to reinvent the wheel but they will just ride on the success wagon”.

Who fits the bill?

The refilling process involves examination, clear out, replacing of exhausted parts and refilling with ink. The cartridge is then print-tested and guaranteed against leakage in transit or use. Though, it is not mandatory but it is advantageous for a prospective franchisee to have an engineering background or experience in consumer electronics.  Moreover, potential investors need to be committed and passionate partners about providing the best sales and service package on the supply of consumables and printers. They should also provide information on the benefits of recycling to the customers.

Most of the franchisors provide complete support regarding franchisee training, store interiors, machinery and equipment, test printers, initial inventory, packaging material and consumables, recharging workstations and infrastructure and marketing support as well. Hence, franchisees can expect to start and operate their businesses smoothly.  

Grab your opportunity

 As brands are swiftly expanding their network via franchising, they regularly seek more partners. Every Cartridge World store is a retail space attached to a micro-manufacturing unit. A ground floor – road facing visible retail space is ideal. It requires 27 to 40 sq mt of retail space. Required investment is between Rs 15- 16 lakh for Tier I and Rs Rs.10 – 12 lakh for tier II and III cities. Cartridge Xpress presently has   six stores. With two franchisees already in its partner network, the brand is now looking for franchisees who will need a minimum investment of Rs 5-10 lakh depending upon a city. The company is looking to establish a pan India presence by opening 100 COCO and FOFO stores.  It is also looking to start export of re-manufactured cartridges and develop channel sales for oits own brand of re-manufactured cartridges Ektos – by developing retail and e-tail channel. For this, investment between Rs 6-8 lakh is needed.   

Finally

India is the leading internet using nation today and as per estimates, over 60 per cent of printing is ascribed to the internet and India. Therefore, the demand prospects for this product will continue to grow steadily. However, the brands face the challenge of providing quality OEM cartridges at competitive prices in face of huge supply of counterfeits and poor quality refilled cartridges. In the refilled cartridge business, the vendors must understand that quality comes with a price and they should able to communicate this message to the consumers as well.  

Related: The 'clean' way to profits

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