{"id":3352,"date":"2017-06-30T01:41:23","date_gmt":"2017-06-30T01:41:23","guid":{"rendered":"https:\/\/get3dsmart.com\/Stagingsite\/\/\/?p=3352"},"modified":"2017-10-27T14:08:39","modified_gmt":"2017-10-27T14:08:39","slug":"two-big-lies-3d-printing","status":"publish","type":"post","link":"https:\/\/get3dsmart.com\/Stagingsite\/2017\/06\/30\/two-big-lies-3d-printing\/","title":{"rendered":"Two of 3D Printing’s Biggest Lies"},"content":{"rendered":"

\u201cComplexity is free\u201d and \u201cthe cost is flat\u201d are two of 3D printing’s biggest lies.<\/strong><\/p>\n

Neither is true, and I\u2019m going to prove it. Right now.<\/p>\n

\"\"MARKETING AND SALES<\/strong><\/h3>\n

Say you open a 3D printing service bureau. You want to fill it with work, so you hire sales and marketing people to build name recognition, drive traffic to your website, generate leads, and close deals. If you take an eCommerce approach you probably spend more on marketing. If you go old school, maybe you spend more on sales, but either way you make an investment.<\/p>\n

QUOTING<\/strong><\/h3>\n

A customer is thinking of doing business with you. If you have an online quoting system, maybe they use it. But if their job has any kind of complexity, you\u2019ll most likely price it offline. Someone has to do the math. If you\u2019re receiving hundreds of quote requests per month, you might even have a team of estimators banging out quotes.<\/p>\n

Either way, whether you kill it with labor or kill it with technology, every quote has a cost. Less than half of those lead to revenue.<\/p>\n

ORDER MANAGEMENT<\/strong><\/h3>\n

Once an order comes in, you\u2019ve got to manage it. If your customer is emailing you orders, all of his or her information has to be entered into your system.<\/p>\n

Then as the job moves through your facility and is touched by different people, updates are made. If you\u2019ve got a lot of work, you might even have a project or production manager overseeing those jobs to make sure everything is done correctly and on time.<\/p>\n

MAKE READY<\/strong><\/h3>\n

Often times, files that come in aren\u2019t \u201cprint-ready.\u201d They need to be fixed. Whether you charge separately, or build it into your price, file inspection and repair is an unavoidable reality.<\/p>\n

Beyond that, there\u2019s machine make-ready. Even though digital workflows reduce the amount, there is still some time involved in setting up any piece of equipment.<\/p>\n

Once a product is 3D printed, it typically needs to be finished. Again, whether you charge separately for it or not, there\u2019s still significant time and cost involved in getting those people, processes, and technology spooled up to complete the job.<\/p>\n

LOGISTICS<\/strong><\/h3>\n

Once a job is completed, it needs to be packed and prepared for shipment. There\u2019s cost in materials (bags, boxes, labels, etc.) as well as the time it takes to enter and confirm shipping information.<\/p>\n

TRANSACTION COST<\/strong><\/h2>\n

Transaction cost can be defined simply as \u201cthe amount of money it takes to complete an order.\u201d All of the costs<\/a> above happen whether you\u2019re printing one part or a million.<\/p>\n

Let\u2019s look at two scenarios. Company A has a transaction cost of $75 and they\u2019re selling a part for $10 each.\u00a0In the second scenario, Company B has a transaction cost of $10.<\/p>\n

\"\"\"\"<\/p>\n

Company A needs a minimum of 25 units<\/strong> to outrun their transaction cost. Company B outruns it with orders of 3 units<\/strong> or more.<\/p>\n

SHORT RUNS<\/strong><\/h3>\n

Lately I\u2019ve seen a few presentations out there where people show graphs with a flat line demonstrating cost per part.<\/p>\n

The examples above prove that\u2019s not the case. But, rarely does anyone call bullshit<\/strong>.<\/p>\n

\"\"<\/div>\n

\"\"<\/p>\n

Until you reach the breakeven<\/strong>, digital remains less expensive than analog. But it\u2019s nowhere near flat. If your customer\u2019s average order size is 100 units, you can pretty easily absorb transaction cost. If they\u2019re only ordering one, or even 10, and you don\u2019t account for it, transaction cost can easily sink your ship.<\/p>\n

COMPLEXITY<\/strong><\/h3>\n

When people in the industry talk about complexity, they\u2019re often referring to customization and personalization. Whenever either are involved, customers must do significant work to communicate their preferences.<\/p>\n

Whether it’s a customer service rep spending time on the phone with a client, or an investment in software and marketing to eliminate the labor and combat friction, more cost gets piled on.<\/p>\n

Here\u2019s the hidden problem. By encouraging customization and\/or personalization all you\u2019re really doing is driving order size downward.<\/strong> You\u2019re catering to an audience of one. In a lot of cases, they only want one or a few of what you are selling.<\/p>\n

As mentioned above, when order size decreases, transaction cost plays a bigger role.<\/p>\n

SOLUTIONS<\/strong><\/h2>\n

Let\u2019s say you wanted to order a personalized bobblehead. Would you rather pay $20 or $85? Company A has to charge $85, or they will eventually go out of business. Company B can provide you with the same product, at a better price. They both use the same machines. Company B is just more efficient, and efficiency translates into savings.<\/p>\n

\"\"<\/p>\n

It\u2019s pretty straightforward really. If you\u2019re going to push short runs and\/or complexity, you have to fully understand your current transaction cost<\/strong> and make every effort to reduce it. You need to automate your workflow, and you also need high volume to spread fixed costs over as many transactions as possible.<\/p>\n

So if you would, please do me a favor. The next time someone tells you that \u201ccomplexity is free\u201d or \u201cthe unit price is flat,\u201d ask them about transaction cost…or just call bullshit.<\/p>\n

 <\/p>\n

This is an abridged version of an article that originally appeared on 3DPRINT.COM<\/a><\/p>\n

 <\/p>\n

For more on this topic, please check out the video<\/a>.<\/p>\n

For even more, check out my recent podcast<\/a> with Chris Garrett at 3DPrinterChat.com<\/p>\n

 <\/p>\n

 <\/p>\n

 <\/p>\n

 <\/p>\n

 <\/p>\n","protected":false},"excerpt":{"rendered":"

\u201cComplexity is free\u201d and \u201cthe cost is flat\u201d are two of 3D printing’s biggest lies. Neither is true, and I\u2019m going to prove it. Right now. MARKETING AND SALES Say you open a 3D printing service bureau. You want to fill it with work, so you hire sales and marketing people to build name recognition,<\/i><\/a><\/p>\n","protected":false},"author":1,"featured_media":4045,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[61,62,27],"tags":[68,70,73,74,75,72,69,71],"class_list":["post-3352","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-3dp","category-economics","category-service-bureaus","tag-3d-printing","tag-automation","tag-complexity","tag-customization","tag-personalization","tag-short-runs","tag-transaction-cost","tag-workflow"],"yoast_head":"\nTwo of 3D Printing's Biggest Lies | Get3DSmart<\/title>\n<meta name=\"description\" content=\"\u201cComplexity is free\u201d and \u201cthe cost is flat\u201d are two of 3D printing's biggest lies. 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