In many industries, consumables are where the profits are for original equipment manufacturers (OEM). The classic example of the past has been Gillette, which sold razors inexpensively and made its money off of razor blades.
The technology of today offers another excellent example, courtesy of ink jet printers. Companies such as Hewlett Packard and Epson offer printers at surprisingly low prices, but sell refill cartridges at up to half the price of the printer. That’s why there are so many smaller ink companies selling much less expensive refill kits.
Collins Ink, the Lebanon, OH-based ink jet ink manufacturer, started off as an alternative ink supplier, developing inks that could run in Scitex High Speed ink jet printers. However, Collins Ink’s story deviates from the norm.
“We started off as a pirate competing against Scitex,” said Lawrence Gamblin, founder and president of Collins Ink. “They decided that we were doing a good job, so we have partnered with them.”
Mr. Gamblin was familiar with the ink jet industry when he started his company 11 years ago, with one 200-gallon mixing tank in a rat-infested garage in Brooklyn, NY. His father worked in the ink jet industry in the 1960s with IBM and then Scitex, and Mr. Gamblin ran his own ink jet company for a few years before starting Collins Ink.
Collins Ink has since relocated to Ohio, where he built a state-of-the-art plant which helped boost his fledgling company’s growth. “It was a good thing to move to Ohio, where I knew people in the industry,” he said.
Scitex is the exclusive distributor of Collins ink jet inks formulated for use in Scitex printers. Far from hurting Scitex by cutting into its margins, Mr. Gamblin believes he is helping Scitex’s business.
“We help Scitex sell more printers,” Mr. Gamblin said. “We make more than 800 formulas just for Scitex printers. If our inks can expand to new applications Scitex can sell printers to, they are happy. There is a synergy there.”
Collins Ink focuses on industrial applications, and while Scitex remains its most important partner, the company began making ink for Hewlett Packard’s industrial applications in 1999. “In the HP market, we have helped increase the population of printers by producing inks that allow customers to print jobs that they couldn't otherwise,” Mr. Gamblin said.
Mr. Gamblin has no intention of going into the more lucrative desktop market, where profits are higher but competition is far more fierce.
“We’ve done pretty well,” he said. “We went into a market where the ink isn’t the profit stream. We try to offer a combination of quality and price. We learned to live with lower margins than is traditional in ink jet. It’s more a traditional ink model.”
Having run his own ink jet company, Mr. Gamblin knows what customers need.
“We know our customers and we know what they are looking for,” Mr. Gamblin said. “We have relationships with our customers. Our customers are concerned about run times, speed, spot colors and being able to print on different substrates. Our customers give us the substrate, and we see what we can do. We make inks for jobs that couldn’t be run before.”
Among its present projects, Collins Ink has recently introduced its own solvent piezo inks, including what may be the first solvent ink that runs in a Hewlett Packard printhead, and is also looking into UV ink jet applications.
“We’re starting to get into UV ink jet,” Mr. Gamblin said. “UV has far-reaching implications and offers a series of niches.”
With so many new projects, Collins Ink has come a long way from its early days in Brooklyn. With its emphasis on meeting the needs of its customers, the company is poised for strong growth in the future.