The biggest question in my head for years has been this. Can you start a business with a desktop 3D printer? With a nice little Makerbot, or a RepRap and a really useful product design, can I actually be my own, cigar-sucking factory boss? In my own living room, with a bathrobe on? An intriguing thought, but do the numbers support such a possibility?
Bootstrapping 3D Printed Design
As evidence show: YES! It can be done. Brooklyn-based Inventor and Engineering Tool/Product Store I Heart Engineering bought a Makerbot 2 years ago and began selling their ‘Trik Tripod Adapter‘, a piece of plastic for attaching Kinects to camera tripods. You can read the business plan for 3D print manufacturing here.
They decided to test the hypothesis of whether or not an entrepreneur can bootstrap their business by buying a cheap 3D printer and selling their one design. First thing they did was test the market with various products over Shapeways and Thingiverse to gauge opinions. “Our hypothesis was that if we could sell at least one or two of anything through Shapeways or our online store, then a 3D printer could probably pay for itself.” I Heart Engineering had purchased a Makerbot for various R&D projects, but for the purpose of this experiment, they assumed they would use the Makerbot to print only one product. As it turns out, they managed to sell more than enough Trik Tripod Adapters to cover the cost!
The part costs was a mere $13.40, roughly 60% of the full $19.95 price tag. This included nuts, bolts, printing time and designing the part. The Engineering Part of the process cost a mere $400 dollars, assuming that one CAD designer spent 4 hours at $100/hr drinking coffee, reading SolidSmack, cruising through GrabCAD design challenges and maybe, MAYBE designing something. As the number of products are sold, the ‘Non-Recurring Expense’ decreases. Other expenses included fixing the 3D printer, electricity used by the 3D printer, labor of pressing ‘print’ and handling, occupied space and materials costs. Marketing, labels, invoicing, credit card fees, scrapped parts and a ventilation system were not included as expenses.
Between December 2010 and September 2011, 42 orders of 51 Trik Adapters were printed by their Makerbot, plus 56 that were outsourced. Expenses added up to 1433.80 and a net revenue of $2,134.65, leaving a net profit of $700.85. Had they purchased something cheaper like a RepRap, they’d have covered their initial costs. Even then, IHE argued that they made more than this figure. “$13.40 is basically the worst case cost. Likely we did better as we used the printer for many other products that we have sold.”
Their conclusion was pretty simple. “While less quantifiable, we also believe that the 3D printer allows us to offer products with limited or unknown demand without losing vast sums of money. There also appears to be sales driven specifically by offering wide variety of 3D print accessories for our robotics products.”
For the entrepreneur, 3D printing is a massive boon because the value of a product can be tested on the open market and quickly brought back to the original designer. Notice how they used Shapeways and Thingiverse to test? That is a truly interesting situation since those sites don’t own any rights to the products they sell. As 3D printers get better and cheaper, their competitive advantage (distribution network, brand, quality assurance) evaporates if they’re hosting a product that a) becomes popular and b) can be printed by the designer or other nearby shop.
All in all, kickass. Props to I Heart Robotics for doing this study, showing how they did it and unknowingly allowing themselves to be our source for this article.