New entrant XYZ Printing offers personal 3D printers at incredibly low cost, as low as USD$499 per unit. How do they do it?
To be sure, their USD$499 Da Vinci model doesn’t offer all the features of more expensive units. In fact, XYZ Printing offers a couple of higher grade units, which each include more bells and whistles. Still, XYZ Printing’s low and high end machines are all priced quite low. How do they hope to make any money on this venture?
One might think they wish to make their money back through their proprietary filament cartridges. Let’s take a look at how it’s priced.
Their filament (currently ABS only) is sold in cartridges containing 600g of material for USD$28. This is equivalent to about USD$47 per kg. By comparison, MakerBot’s filament retails for USD$55 per kg, not significantly different. So it appears XYZ Printing is not making massive profit on their filament.
What then? We’re thinking that because XYZ Printing is actually a subsidiary of Kinpo Group, a gigantic Taiwan-based industrial conglomerate of 40,000 employees, they have a huge advantage over most 3D printer companies. The larger company can provide many internal services and repurposed capabilities that could lower the cost of production, not to mention they have the ability to provide significant funding for startup.
Why do this? We suspect it’s because Kinpo is attempting to profit on huge sales volumes. They’re going to make a little bit of money from each of a large number of sales. This is very different from the pricing strategies of some of their major competitors.
Which approach will succeed?
Via XYZ Printing