Now is a great time to start a 3D printing service bureau!
Over the past decade, many independent shops were acquired and there was significant industry consolidation. But recently, new players like Carbon, HP, and Desktop Metal have joined the fray and have already played a role in the launch of several new 3D printing service bureaus. To some degree, it’s happening because instead of supplying parts themselves, these companies are enabling their service bureau customers. They’re working together to build large distributed manufacturing networks.
Consider Carbon for example. As of late September 2017 they had “more than a dozen” production partners around the globe. At the time Carbon also announced they were expanding operations into Europe by teaming up with the Oerlikon Group, Fast Radius, and Oechsler in Germany, and Fast Radius and Paragon in the UK. Their press release noted that this was, “yet another important milestone in Carbon’s strategy of bringing a complete system–materials, hardware, supply chain, and the right players in the industry–together to make its additive manufacturing vision a reality.”
They’re not alone. At RAPID + TCT 2017, HP announced several initiatives including its reseller program, and a slew of machine placements at several service bureaus including Fast Radius, Forecast 3D, Go Proto, Materialise, ProtoCAM, Protolabs, Shapeways, Sigma Design and 3D Prod.
HP said then that, “Service bureaus and product design firms are a hallmark of manufacturing innovation, adopting leading-edge technologies ahead of the industry and delivering breakthrough services to their own end-customers.” They also noted that, “HP is expanding deployments with leading manufacturing service bureaus…to enable a new class of on-demand, industrial-grade 3D production parts and services.”
In cases where a highly functional marketplace has plenty of both customers and capacity, nearly everybody wins. With enough volume, all boats rise. Service bureaus who attach themselves to a production network have an opportunity to secure steady work through the system.
Companies like HP and Carbon are demonstrating a commitment to the success of their service bureau customers. That kind of support from a big supplier can be a critical asset for a startup.
But let’s be honest. They’re also doing it because they want to own and control the network. If they don’t someone else will.
The concept is not new. Although it’s not an equipment manufacturer, 3D Hubs has built a large distributed manufacturing network of over 7,000 partners that provide CNC machining, in addition to 3D printing services. In the past, all companies who joined their network had the opportunity to benefit from the system. It was a level playing field.
A while back however, 3D Hubs made some major changes to their website and strategy. Instead of allowing users to choose their provider based on several different criteria, including proximity, price, and capabilities, the company now automatically selects a provider which it feels will best serve the customer. Customers can still manually select a provider, but that option is buried deep in the process, via a link in fine print at the bottom of the order entry form.
For many of the hubs on the system, this has had a negative impact. Now instead of being able to compete based on a host of different criteria (location, cost, unique materials, finishing services, etc.) they are, for most intents and purposes unseen…unless they are one of the service bureaus that 3D Hubs automatically selects.
Service bureaus should take note! While production networks can be a source of additional work, at some point things will likely change. After all, he or she who owns the network, owns the customer.
Therefore, it is incumbent on a service bureau to market their services with the intent of driving traffic to their own domain. With that in mind, here are five steps service bureaus can take to optimize their businesses and ensure the effectiveness of their marketing:
- Live, breathe, sleep and eat digital – if you own a 3D printing service bureau, like it or not, you are also a DIGITAL manufacturing facility. If you’re encouraging phone calls, emails and other manual processes, you’re doing it wrong. The goal is and always will be to seamlessly move from a digital file to physical product. You’re either leading here, or slowly decaying.
- Own your online real estate, but don’t be dependent on a platform – something like 70% of all buying decisions today are being made before a customer ever contacts a vendor. Customers are using the web to identify needs and make decisions. If you’re not part of the conversation, you’re likely not being considered. While it’s always best to drive traffic to your own website, you also have to be active where your customers are. But, keep in mind that with social media sites like LinkedIn, Facebook and Twitter, many more variables are out of your control.
- Optimize your marketing message and delivery – What’s your company’s elevator pitch? You know, 2 or 3 sentences that describe the “who”, “what” and “why” of your company? If you don’t know, your prospects and customers don’t either. They need that basic information to decide if your company has the potential to help. Once they’re in the buying funnel, additional marketing messaging helps them progress from interest to consideration, and finally commitment. But marketing must also be delivered to the right place at the right time. To be effective, companies need to have a solid marketing foundation. Setting that up takes money and time.
- Automate everything – Transaction cost is the enemy of a 3D printing service bureau. Every time a human has to touch a job, from quoting to order entry and project management, transaction costs add up. They can be more easily absorbed with high dollar orders, but that’s contrary to the benefits of digital manufacturing, including short run, just-in-time and on demand production. Every single one of those strategies drives average order size and value downward.
- Focus on finding and replicating “killer apps” – The goal for service bureaus is to find applications that provide large, consistent volume. These are typically tied to a specific benefit, like unique geometries, low volume production, customization and personalization, and/or speed to-market. Once a killer app is identified and reduced to practice, service bureaus should focus on finding other customers with similar needs.
Whether a service bureau is a startup or an existing player, acting on these initiatives can help insulate them from disruption and allow them to better control their destiny.
Given the slew of new equipment offerings and overall strength of the economy (in addition to other enablers) it’s likely that the trend of new service bureau openings will continue. To be successful, they must drive volume and revenue. Nothing happens in a vacuum. To achieve results, companies must make strategic investments. For 3D printing service bureaus, this goes far beyond hardware. They must have processes in place that allow them to market and sell their services effectively.
Discuss this and other 3D printing topics at 3DPrintBoard.com or share your thoughts below.
John Hauer is the Founder and CEO of Get3DSmart, a consulting practice which helps companies understand and capitalize on BIG opportunities with 3D printing.
John’s original content has been featured on Forbes, TechCrunch, Futurism, QZ.com, and 3DPrint.com among others. Follow him on Twitter at @Get3DJohn
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