How to calculate the TCO of a printer

Total Cost of Ownership – key factors to consider when buying a printer

Ricoh Transform is no longer active. You can keep up to date with the latest thinking from Ricoh Ireland on our new blog, Ricoh Insights.

Please wait while you are redirected...or Click Here if you do not want to wait.

Looking for a new printer or multi-function device (MFD) can easily become a time-consuming undertaking. There are many issues that you should consider in order to find the most suitable device for your needs.

And as part of your research and selection process, it’s also likely that you will end up using a variety of information sources such as product reviews, comparisons, opinions about vendors and their customer satisfaction ratings to help you arrive at a decision.

However, no matter how extensively you search and no matter how varied the types of information you use to make your choice, there is one critically important area that, in my opinion, you should always include in your pre-sales analysis, and that is to figure out the Total Cost of Ownership (TCO) of your machine.

Traditionally, the TCO calculation has been used to help buyers and owners determine the direct and indirect costs of purchasing a product. TCO is a very common analysis that is conducted by supply chain and IT departments as part of their decision-making, but there is nothing to say it can’t be used by a home user or a business owner of a small enterprise.

A TCO calculation allows you to place a single value on the complete lifecycle of a purchase. This value includes every phase of owning a product i.e. acquisition, operation and running costs plus maintenance and any future upgrades. In other words, the TCO calculation enables you to work out how much a printer will cost you in total for the period of time that you intend to use it.

How does total cost compare to price?

TCO highlights the difference between the purchase price and the long-term cost in supporting hardware and software IT acquisitions. Depending on the type of print technology that you have chosen and the amount of printing that you intend to do, running a machine could cost you between two and six times the purchase price.

In addition, not all consumables are created equal. Buyers are sometimes lured by the prospect of low-cost consumables only to find that they need to be replaced with unacceptable frequency. Be savvy and don’t get tempted by a cheap hardware price or the small price tag for a toner.

What is included in the TCO calculation for a printer?

There are three key components to TCO calculations:

  1. Acquisition/Physical Hardware Costs – this is the cost of the printer invoiced to you by a vendor. In the business sector, products are very often leased, so the cost here is the cost of leasing over the period of time.
  2. Printing Costs i.e. click rate or CPP (cost per print) – in essence, you take the cost of each toner cartridge, divide it by its yield, then add all the components together which in turn will enable you to determine what it will cost to print a page. At this stage, the total is likely to be a very small sum of money but if you multiply it by the number of pages you print in a month and then by the number of months you intend to keep the machine, the total is likely to rise significantly.

For example:

 Total CPP = Toner purchase price/Toner yield × Monthly print volume × 36 months

So let’s say your CPP is 5p per page and you plan to print and/or copy 1,000 pages a month over a period of five years, your total CPP will come to €3,400. And this sum is on top of the cost of the machine itself.

An alternative approach is to purchase a printer with a form of ‘Click Contract’ from a supplier which will most likely save you money since the click is fixed and you will pay for what you print only. You won’t have to think about getting the best deals for printer supplies i.e. toners, inks and parts such as drums (laser printers). Some contracts will also include the service of your machines. Then add all the costs of the ‘Click Contract’ to your TCO calculation.

  1. Running Costs of your printer – some areas to consider
    • Energy consumption over the period of time – we all try to save energy and be more eco-friendly but do you actually think about the electricity usage for each device that you own? Each printer should come with an industry standard called Energy Star as well as a TEC value. TEC shows the Typical Electricity Consumption over a period of week. The TEC will already be calculated by each manufacturer, so all you have to do is compare the TEC of one machine against another. Let’s say printer (1) has a TEC value of 1.17kWh and printer (2) 2.67kWh. When you multiply both with the cost of kWh of energy from your supplier and then by the number of weeks you intend to keep the machine, the difference in the running cost could be between €30 to €150 per machine per year.
    • Cost of paper – another factor that should be considered is the cost of the paper stock that is suitable for the type of printer you are looking to buy. Typically, laser devices will operate on low-cost plain paper, and ink technologies often require more expensive specialised paper, especially for high-quality colour printing. The availability of double-sided printing feature (both when printing and copying) is also worth checking in order to minimise paper usage costs. You can set your machine to double-sided printing by default and effectively halve the cost of paper used and waste created.
    • Maintenance Costs i.e. service contract or warranty costs – how long is the warranty provided by a vendor? Is it on-site, RTB (return to base) or other? Can you extend it and if so, how much will it cost you? Or perhaps you can purchase an annual maintenance contract? Any one of these options may incur cost which then has to be added to your TCO calculation.

Related article: Seven crucial reads to help you choose the right desktop printer

Ricoh Transform is no longer active. You can keep up to date with the latest thinking from Ricoh Ireland on our new blog, Ricoh Insights.

No Comments

We want to hear your thoughts

Ricoh Transform is no longer active.
We are redirecting you to our new blog, Ricoh Insights.


We've moved!

Ricoh Transform is no longer active. You can keep up to date with the latest thinking from Ricoh UK on our new blog,
Ricoh Insights.
Visit Ricoh Insights