The majority of label printers work either in thermal (sometimes called thermal direct) or thermal transfer mode.

A thermal direct printer has a printhead that applies heat to specially coated, thermal paper. This paper changes its color to black when it is heated. The same principle applies to a fax machine with thermal paper. If you ever used such a fax you may have noticed that the paper gets yellowish or even brown after laying around for some time. That's because exposure to sunlight or any other source of bright light has the same effect on the paper as heating it during the print process.

Obviously, you will only want to use a thermal direct printer if you need labels that must at most be legitable for a few days or weeks. A typical application would be an address label. Also, grocery stores use this type of printing for labeling of vegetables or other short lived goods. Thermal direct printers have the big advantage that only one type of consumable is needed, the above mentioned thermal paper.

Thermal transfer printers on the other hand print on labels made of plain or normal paper. The printhead is the same as above but a thermal transfer ribbon or sheet sits between the head and the paper. Heating the ribbon causes ink to transfer from the ribbon to the paper, hence the name. Thermal transfer printing will lead to labels that can last for years. If you had to put labels on shelves that are supposed to last for some time you would use a thermal transfer printer.

It's noteworthy that any thermal transfer printer can also print thermal direct (simply leave out the ribbon and use thermal direct paper) but usually not the other way round because the cheaper thermal direct printers often lack the gear to attach a thermal transfer ribbon. Thermal transfer printers with about 200-300 dpi (which is enough for most purposes) start at about USD 500 and, depending on the volume and speed they deliver, can get very expensive.

Generally speaking, buying a dedicated label printer makes sense if you regularly have to print more than, say, 100-200 labels a day. It really depends on your application. Some advice: Always make sure that the printer comes with appropriate Windows (or Mac) drivers. This will allow you to use any Windows (or Mac) software for label printing, the alternative being that you have to use the printer's manufacturers proprietary (and usually expensive) software.

Using an every day ink jet or laser printer

With regards to print quality or durability, any modern ink jet or laser printer will easily print even the most demanding 2D barcodes in good quality. Therefore, if, for example, your application is to print lists of barcodes on plain paper there's no point in buying a dedicated printer for barcode printing.

However, if you have to print labels on a regular basis, the story is different. For once, these printers won't be able to deliver a single label like a dedicated label printer, instead they consume at least a full sheet of paper, no matter how many labels you need. Of course you could put the sheet back into the printer after peeling the label off but next time you would have to tell the label printing software to skip the used labels. Also after two or three trips through the paper feeding mechanism labels tend to get loose and block the paper path.

Bear also in mind that (on a per label basis) ink jet or laser labels are far more expensive then labels for thermal or thermal transfer printers. It's my experience that people try to cope with this for some time but finally give in and buy a dedicated label printer.