Recently we’ve observed several ultra-low cost 3D printer startups disappear from the landscape. It seems the market is finding the true cost of 3D printing.
You’ve seen them. We’ve reported on them. They are the ultra-low cost 3D printers, costing less than USD$500. Some even cost USD$100 or less, apparently.
But it’s probably too good to be true. The current economics of such machines in today’s market make it very difficult to launch machines at that price point. While several startups have been extremely successful in past years, namely Formlabs, Printrbot and a few others, they had the advantage of a not-so-busy market. Meanwhile, if they were launching their products today, they’d find a very crowded market filled with very similar machines, with new ones being announced weekly.
How similar are these machines? Besides the basic specifications, even their names are beginning to be overlap!
Even worse for these startups, there’s only two ways to get attention and draw customers: include some very innovative features or lower your price. The latter is the choice of some startups, but it sometimes puts them on a path of doom.
If you price your machine too low, you must sell an awfully large number of units to make enough money to continue operations. You’ll need even more if you hope to refine your machine into a new version. For a USD$99 machine, one can only imagine a very slim profit margin of say, $10. The profit may in fact be even lower than this – or in some cases negative! In order to match the millions raised by their earlier competitors, they’d have to sell multiple hundreds of thousands of machines, which is very unlikely given the stiff competition. Several companies have fallen into this trap and have since expired. Or are about to.
Don’t even think about a machine that hasn’t been definitively shown to be properly designed and working.
One way out is to be strongly funded, perhaps by a large corporate owner. That’s how XYZ Printing survives – they are a subsidiary of a massive manufacturing company. But you have to wonder why a profitable corporation would sink money into a venture that could lose money. Expect companies like XYZ Printing to get really big, really fast – or disappear.
The other low-cost approach, as we mentioned, is to be innovative. That’s why we continue to be interested in the Peachyprinter approach. It’s a resin-based 3D printer concept that truly simplifies the engineering and manufacturing, thus making the machine ACTUALLY less expensive. But they’re not yet shipping.
Meanwhile, we suspect your 3D printer purchase is best directed to companies with known-good products and a solid business model.
Image Credit: Wikimedia
