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Why do so many 3D Printing Service Bureaus fail?

11 Mins read
A typical 3D printing service bureau
A typical 3D printing service bureau/Source: Manufactur3D

The 3D printing services industry presents a lucrative opportunity, with the global services market valued at a staggering $6-6.2 billion (global market is valued at $20 billion according to Wohlers Report). However, many 3D printing service bureaus fail to navigate the opportunities of this landscape, often facing challenges and struggling to survive beyond the first few years.

I have been operating in the Indian 3D printing industry since more than 8 years now and over the years I have interacted with many founders young and old, beginners and experts, and running small and big companies and these conversations have often led to discussions on why so many 3D printing service bureaus failed in their pursuit to build sustainable businesses.

Now, I don’t want to be a doomsayer here and I’m not suggesting that failure is an inevitability for service bureaus. But running a successful 3D printing service bureau demands a multifaceted growth plan, encompassing precise market positioning, seamless technology integration, effective branding, and more. Neglecting these crucial factors is a surefire path to joining the ranks of fallen businesses.

A vast majority of failed service bureaus that I have read and known about share some common denominators: they were launched by first-time entrepreneurs as a one-person company, operating under flawed assumptions about the industry or are established on a whim, they are without a well-thought-out strategy and with no concern for building a brand.

With this article I aim to shed some light on why most 3D printing service bureaus fail and hopefully by understanding these factors budding entrepreneurs and operators in this space can overcome common pitfalls and build sustainable, successful businesses.

Reasons why 3D Printing Service Bureaus fail

The Market Research Imperative 

Global metal and polymer Additive Manufacturing market 2020 to 2023 and forecast 2028
Global metal and polymer Additive Manufacturing market 2020 to 2023 and forecast 2028/Source: AMPOWER

“Without data, you’re just another person with an opinion.”

– W. Edwards Deming, Engineer, Statistician, and Consultant

Market research is a critical factor that is often overlooked or miscalculated by first-time entrepreneurs. Market research and appropriate targeting can make or break your 3D printing service bureau in the long-term.

Sure, 3D printing is undoubtedly a hot and trending technology, but have you stopped to consider which specific sectors are truly embracing it? Which geographic regions are experiencing the most growth? And what industries might be primed for adoption in the future?

Diving headfirst into the 3D printing business without this crucial market intel is an approach that often leads to business failures or closures. It’s like setting sail without a map or compass—you might get lucky, but the odds aren’t in your favour.

So, let’s discuss how to chart your course wisely. Start by understanding the lay of the land in your local area or target region. Read industry news observe emerging trends, and stay up-to-date on government policies or initiatives that could drive demand in certain sectors (you can follow Manufactur3D Magazine for staying updated about the industry trends).

Ask yourself: Who are the most prominent companies in your region? What do they manufacture and where does 3D printing fit into their workflow? Which companies are already using 3D printing for prototyping or production? What pricing and margin trends are shaping the market? Which industries are genuinely inclined to purchase 3D printed products? How many service providers are already present in the immediate locality and outside it and more such questions.

Start from the basics and read our detailed article on how to start a 3D printing business in India.

The Value of Market Insights

During the COVID-19 pandemic, mainstream media outlets were abuzz with stories about how 3D printing was “saving lives.” Suddenly, my inbox was flooded with inquiries from hobbyists and enthusiasts looking to turn their passion projects into full-fledged businesses.

Many of these aspiring entrepreneurs had plans to invest in new machines and dive into the market, riding the wave of 3D printing hype. But when pressed for details, their strategies often boiled down to little more than a vague desire to “leverage the buzz.”

Among this group, however, were a few individuals who took a more prudent approach. They reached out to me not just for general advice, but to gain insights into the Indian market landscape—which sectors were growing, which were adopting the technology, and how the future might unfold.

Were these enterprising folks acting solely on my guidance? Of course not. But they understood the critical importance of letting data and research steer their decision-making process, ensuring they targeted the right customers from the outset.

And you know what? Their diligence paid off. Two of those individuals went on to successfully launch their own 3D printing companies in India. The lesson here is clear: While passion and enthusiasm are great, they’re no substitute for good old-fashioned market research. Do your homework, know your terrain, and let that knowledge guide you toward the most promising opportunities. It could mean the difference between your 3D printing endeavour taking flight or crashing and burning before it even gets off the ground.

The Power of Branding

Branding is important to ensure you are relying on low prices for survival
Branding is important to ensure you are relying on low prices for survival/Source: Manufactur3D

“Companies need to move from a price-based to a value-based strategy.”

– Philip Kotler, Marketing Author and Consultant

3D printing is a dynamic industry and 3D printing services even more so. And here there’s one sure-fire way to safeguard your business against the pricing wars: Relentless focus on branding and marketing. Too often, companies conflate these two critical concepts with pure sales—a grave mistake I would say.

For many believe that marketing should lead to exponential sales. While it is true to an extent, sale is not the only outcome. The outcome is much deeper than just revenue. Marketing develops an intangible value that builds a globally loved brand. Customers don’t care how much revenue you generate, they care about the brand, the idea or values you represent and the prestige of buying and using your products. There’s a reason why brands charge a premium price for the same quality of products.

Make no mistake: While sales are the lifeblood of any business, branding is what builds customer loyalty, cements your reputation for quality, and ultimately allows you to command a premium for your services. In an industry where seemingly every new service bureau embraces the “undercut everything” mentality, being perceived as just another commodity provider is a death knell.

But cultivate a powerful, differentiated brand? Well, that’s the key to separating yourself from the disposable also-rans. It’s the factor that can help you retain customers, attract new ones, and sidestep the pricing race to the bottom.

The Hypocritical Paradox (and How to Exploit It)

Here’s a paradox that always strikes me as somewhat hypocritical: Customers who will ruthlessly haggle over pennies for an unbranded product or service—regardless of the underlying quality—are often perfectly willing to pay a premium for an established brand name.

Why does this disconnect exist? Well, there are reams of scientific research devoted to unravelling the psychological forces at play. But from a practical standpoint, it creates an opportunity a savvy business can exploit through strategic branding and positioning efforts.

The key is becoming that brand—the one that resonates with customers on a deeper level. The thought leader people instinctively trust to deliver a superior experience worth paying for. It’s those businesses that breed fierce loyalty and turn customers into vocal brand evangelists.

Want to set yourself apart? Manufactur3D has been at the forefront of marketing and branding activities for 3D printing brands across the globe. We are known for our content marketing prowess and have worked with global leading brands. We can help you stand out in the 3D printing industry by talking about your achievements, your successes and taking your projects to more relevant people. Connect with us at inquiries@manufactur3dmag.com and we will work with you to build your brand value in the industry.

Prioritizing Your Brand Narrative

Don’t make the mistake of neglecting your brand-building efforts. Make sure you’re constantly in the news, scoring interviews, and publishing insights that cement your standing as an industry authority. If you lack the time for a full-scale content marketing blitz, work with media partners like Manufactur3D to develop thought leadership content that gives wings to your narrative.

And remember: An effective brand extends well beyond just your company—you need to be cultivating your brand as the founder and face of the business. This two-pronged approach ensures you’re seemingly ubiquitous in your space.

My work in branding and marketing has led me to have innumerable conversations with founders grappling with these issues. Time and again, I’ve seen the ones who prioritize brand-building soar past their peers who are scrambling for short-term pricing wins. They’re the businesses attracting premium pricing, fending off commoditization, and developing a base of loyal customers. Something every business hope for.

Ignore branding at your peril. Or elevate it to its rightful strategic priority and watch your 3D printing service bureau thrive on a level your undercutting competitors can only dream of.  The choice, as they say, is yours.

Avoiding the “Print Everything” Mirage

The "Print Everything” mirage
The “Print Everything” mirage/Source: Formlabs

Imagine this: You’ve just invested in your first 3D printer, and you’re ready to ride the wave of the additive manufacturing revolution. The possibilities seem endless—from custom drone parts to intricate jewellery pieces, you envision your 3D printing service bureau churning out products for every industry under the sun.

Sounds exciting, right? But hold up—there’s an important consideration waiting around the corner for those who embrace this “print everything” mentality. And it’s a common challenge faced by many new entrepreneurs in this space.

The Plug-and-Play Myth

Let’s get one thing straight: 3D printing is far from a plug-and-play technology. Sure, the idea of hitting “print” and watching your product materialise is seductive, but the truth is, that different applications demand different printers, materials, software, strategies and even more

Think about it this way: While you could technically print a drone propeller on an FDM (fused deposition modelling) printer, the plastic material used in FDM might not be ideal for that high-performance application. You’d be better off with a composite printer designed specifically for such purposes.

If you try to be a jack-of-all-trades in the 3D printing world, right at the start, you’ll quickly find yourself drowning in a sea of expensive machines, each sitting idle more often than not, expensive materials, their expensive AMCs. Trust me; I know of 100s of 3D printers lying idle across the country due one or all of the reasons. According to industry veterans, most 3D printers in India are utilised at merely 40-50% of their capacity, which suggests that half of the machines remain idle without any job work.

The Path to Success: Specialisation

So, what’s the secret to thriving in the 3D printing service bureau game?

Specialisation!

Instead of trying to be all things to all industries, zero in on a specific sector with strong growth potential, high demand, or attractive profit margins.

Why does this focused approach work? Well, it allows you to become an expert in a particular niche, deeply understanding the unique materials, techniques, and requirements of that industry. When you excel in your chosen domain, you can gradually expand your offerings and customer base from a position of strength.

Just last February, I spoke with an MBA grad exploring the idea of starting a 3D printing service bureau. His assumptions mirrored those of many beginners—that with a single printer, he could cater to every conceivable product and market. Needless to say, after purchasing an entry-level printer and attempting to build various products, he quickly realized the complexity and nuances of this technology.

The moral of the story? Don’t fall into the “print everything” trap. Embrace specialisation, and you’ll be well on your way to crafting a successful, sustainable 3D printing business.

If you are looking to start a services business you need to buy the right kind of 3D printer and you need to know what that printer can print for you, which industries you can cater to with that printer, and so on.

If you are confused or want to get confirmation on your purchasing decision, we can help you out with a simple and free consultation. Get on a call with us and we will direct you towards buying the right kind of 3D printer so you are on the right track from day one. Mail us at inquiries@manufactur3dmag.com to book your free consultation call.

The Race to the Bottom: A Sure-fire Path to Failure

The Race to the Bottom
The Race to the Bottom

“The price war might seem to win you customers, but it’s just a race to the bottom. Provide exceptional value instead.”

– Kevin Stirtz, author of “More Loyal Customers”

One common (or natural) strategy used by new entrants is to undercut the established market price and gain as many customers as possible. Over my 8+ years of experience in this sector, I’ve seen countless service bureaus fall victim to the “undercut everything” mentality, especially when entering a market with established players. In their quest to capture more orders and outmanoeuvre the competition, they slash prices to absurdly low levels.

Sure, this tactic might give your topline revenue a temporary boost. But here’s the cold, hard truth: Those razor-thin profit margins aren’t sustainable in the long run.

“Lowering prices is easy, being able to afford to lower prices is hard.”

– Jeff Bezos, Former president and CEO of Amazon

Maintaining the low prices is difficult. You might think that once you have a good enough customer base, you will start raising prices, but behold, a new business will enter the market and undercut you and you may not be able to raise your prices.

You’ll quickly find yourself locked in a battle of attrition with the competitor with no clear path to success.

The Slippery Slope of Price Wars

In the early 1990s, major U.S. airlines, including American Airlines and Northwest Airlines, engaged in severe price wars. They kept lowering ticket prices to outperform each other. The result was record-breaking air travel volumes and fantastic deals for customers, but the industry also suffered record losses. According to some estimates, the industry’s overall losses in those years exceeded its total profits since its inception.

The same has happened in the Indian 3D printing industry. Companies, to get more orders, have stripped off the profitability of the entire industry. This is a vicious cycle where every company tries to undercut the undercut

I vividly remember that the FDM (fused deposition modelling) printing rates hovered around a healthy ₹60-75 per gram in 2017-18. Today, those rates have nosedived to a paltry ₹5-8 per gram. Can any service bureau sustain itself at those levels? The answer is simple: They can’t. Not for long, at least.

Ultimately, the undercut approach often leads to business failures or closures. You might think you’re playing smart by stealing customers from rivals, but in reality, you’re just draining the entire market of its profitability. Rather than engaging in this race to the bottom, the smart way would be to differentiate your business through superior service (service support is very poor in India and excelling here can be the differentiating factor), innovative offerings, and value that extends far beyond just the lowest sticker price.

Because at the end of the day, being the cheapest option is a losing proposition—one that is surely unsustainable.

Conclusion

Through years of studying and observing trends in this industry, I’ve witnessed plenty of small and big hype cycles come and go. But one particularly grim constant has been the high failure rate among 3D printing service providers. Most struggle to pivot or simply shut down operations after just 3-4 years.

Navigating the 3D printing service bureau landscape is undoubtedly challenging, but by heeding the lessons learned from past failures and implementing the strategic approaches outlined in this article, you can increase your chances of long-term success. Remember, the key pillars are thorough market research, focused specialization, effective branding and marketing, and avoiding common pitfalls like the “print everything” trap and unsustainable price wars.

While the road ahead may be winding, you don’t have to go it alone. By partnering with the right resources and experts, you can amplify your efforts and accelerate your growth trajectory. At Manufactur3D, we specialize in helping 3D printing service bureaus establish a formidable brand presence and reach their target audiences through tailored marketing and promotional campaigns.

The future of additive manufacturing is bright, but only for those who are willing to learn from the past, adapt to changing market dynamics, and continuously refine their strategies. Take the first step today by reaching out to us at inquiries@manufactur3dmag.com. Your journey towards becoming a thriving, industry-leading 3D printing service bureau starts now.

(Disclaimer: This is an opinion piece and is completely based on the authors personal experiences and interactions with industry peers and is majorly limited to the Indian context.)


In our Opinion section, Manufactur3D shares thought, opinions and insights from additive manufacturing industry leaders from across the globe. The thoughts published under this series are the authors own thoughts and they may or may not be endorsed by Manufactur3D. To publish your thought leadership articles in our opinion section, mail us your article along with your credentials.

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About author
Abhimanyu Chavan is the founder of Manufactur3D Magazine. He writes on Additive Manufacturing technology, interviews industry leaders, shares industry insights, and expresses his thoughts on the latest developments in the industry. You can follow him on LinkedIn, Twitter and Instagram.
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