Wednesday, November 15, 2006

Costs Again (but different)

So I was just doing some consulting for my church (website).  The church is Washington Cathedral in Redmond.  Here is the question that came up...somebody has a cool Laser printer that they will donate if we want it.  So do we want it?

Now as a non-profit this church has a much better position to analyze the numbers than most businesses.  In most business to purchase a Laser Printer you have to add the costs of buying the printer.  In our case here we don't ...the printer is free!  Cool huh?  So why not go for it. 

The main question to me in either case is do you need a Laser Printer?  You see all the analyzing that follows either supports or doesn't support that decision.  Could you use an Ink Jet printer?  If you want a Laser can you justify the cost.  An example I used was Coca-cola spends millions in advertising but no problem because it leads to billions in sales.  Millions sound like a lot until to realize what it buys you.

The costs on consumables (Ink, Paper) and the costs of repairs differ.  The Ink Jet printer has ink cartridges for $50-$70 (both black and color) The printer itself can be as cheap as $100 at Costco or Amazon which comes with one set of cartridges.  $100 - $70 = $30 for the printer.  This is one of the reasons as a Network Admin I don't like to spend much time trying to figure out or fix Ink Jet Printers.  Why do it, the solution to the users problem is $30 not my high hourly fee.  Now the Laser printer has toner costs far above the price of Ink Cartridges and to get a good deal you buy a few of them at a time so you have a pretty big investment.  Laser printers are coming down in price and almost disposable but the fancier ones are a lot, maybe in the thousands.  In either case if you have $800-$1200 of toner sitting around you will probably want to fix your Laser printer when it goes down.  That can be expensive.

In my opinion at the church the best course of action is to decline the offer of the laser printer because the costs to operate in the first year would allow us to operate an Ink Jet printer for years and probably still buy a new one after a few years.  The costs are less total and the church could use color printing but doesn't really need Laser quality (the Laser printer is black only).  But that doesn't mean this is the best decision.  For example I had a Real Estate Agent customer who bought a very expensive Color Laser Printer years ago that would still be state-of-the-art today.  It made since for him because he printed very nice looking brochures for the properties he sells.  Not just these cheap flyers you see on the post in front of the house.  He sells multi-million dollar properties and does print quality brochures for them.  In fact he used to have these printed on 4-color presses.  That's expensive so he actually saved money and provided a quality job for his customer.  It made sense.

Don't think about technology with your emotions, have a reason the technology is needed and analyze the costs like an accountant.  Then the best part you get to decide whether to do it or not...Good Luck.

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