The Daily Cent | Business & Investing

Walk into almost any electronics store, and you'll likely find a Canon printer selling for less than $100. At first glance, it seems like a bargain. But what many consumers don't realize is that Canon—and many other printer manufacturers—aren't trying to make their biggest profits from selling printers.

Instead, they're making them from something much smaller: the ink cartridges.

It's a classic business strategy known as the "razor-and-blades" model, and it has become one of the most profitable pricing strategies in modern business.

Sell the Hardware Cheap...

Buying a printer often feels like getting a great deal.

Canon frequently prices entry-level printers at or near cost, and in some cases, may even sell them at a very slim profit margin.

Why?

Because once you own the printer, you'll need compatible ink cartridges for as long as you use it.

The printer gets customers into Canon's ecosystem—the ink keeps them there.

...Profit From the Consumables

Unlike printers, ink cartridges need to be replaced regularly.

Depending on how much you print, you may purchase multiple sets of cartridges every year.

Over the life of the printer, many consumers spend far more on ink than they did on the printer itself.

For example:

• Printer purchase: $79
• Replacement ink: $45–$80 per set
• Multiple replacements over several years

Total ink costs can easily exceed several hundred dollars, often surpassing the original purchase price of the printer.

Why Is Printer Ink So Expensive?

Many consumers wonder why a small cartridge of ink can cost so much.

Several factors contribute to the price:

Research and Development

Ink isn't just colored liquid.

Manufacturers invest heavily in developing ink formulas that:

• Dry quickly
• Resist fading
• Produce vibrant colors
• Prevent clogging
• Work reliably across different paper types

Developing and testing these technologies requires significant investment.

Manufacturing Precision

Modern ink cartridges contain tiny nozzles and electronic components that deliver microscopic droplets with remarkable accuracy.

Producing these components requires advanced manufacturing processes.

Ongoing Support

Ink sales also help manufacturers fund:

• Software updates
• Customer support
• Warranty services
• New printer development

The Razor-and-Blades Business Model

Canon's strategy isn't unique.

Many companies sell one product at a low price while earning recurring revenue from replacement products.

Examples include:

• Razors and replacement blades
• Coffee machines and coffee pods
• Gaming consoles and video games
• Electric toothbrushes and replacement brush heads
• Water filtration systems and replacement filters

The goal is to create long-term customer relationships rather than relying on a single sale.

Subscription Models Are Taking Over

Today, Canon and other printer companies have expanded beyond selling ink cartridges individually.

Many now offer subscription services that automatically ship ink when your printer detects low levels.

These services provide convenience for customers while creating predictable, recurring revenue for the company.

Recurring revenue is often attractive to investors because it can make future sales more stable and easier to forecast.

Why Investors Like This Business Model

From an investor's perspective, recurring revenue can be more valuable than one-time sales.

Companies with repeat customers often enjoy:

• More predictable cash flow
• Higher customer lifetime value
• Stronger brand loyalty
• More stable long-term earnings

This is one reason subscription-based and recurring-revenue businesses often receive higher market valuations.

What Consumers Can Do

If you're shopping for a printer, it's important to consider more than just the purchase price.

Before buying, compare:

• Replacement ink costs
• Page yield per cartridge
• Compatibility with third-party ink
• Refillable ink tank options
• Total cost of ownership over several years

Sometimes a more expensive printer can save money in the long run if replacement ink costs are significantly lower.

The Daily Cent Take

Canon's printer business offers an important lesson for both consumers and investors: the cheapest product isn't always the least expensive over time.

By pricing printers competitively and generating recurring revenue from ink cartridges, Canon has built a business model that emphasizes long-term customer value over one-time sales.

For investors, this strategy highlights the power of recurring revenue—a model used across industries ranging from technology and software to consumer products and healthcare. For consumers, it serves as a reminder to look beyond the sticker price and consider the total cost of ownership before making a purchase.

Sometimes, the real business isn't the product you buy—it's everything you keep buying afterward.

Disclaimer: This article is published by The Daily Cent for informational and educational purposes only. It should not be considered financial, investment, tax, or legal advice. The views expressed are intended to explain common business strategies and should not be interpreted as an endorsement of any company or product.