Service vs Product. Best 3d printing business model for beginners
🗣 Stepan Medvedev 🗓 03-18-2024 🕮 20 minutes read

6 reasons why Service is a better 3d printing business model for beginners, than Product

🗣 Stepan Medvedev 🕮 5-minute read
🗓 06-26-2024

I will give you 6 reasons why the Service model is the model to go with when starting a 3d printing business.

My “assumptions” are based on 10 years of running (and eventually selling) my own 3DP shop.
It is quite a story, and it can be found HERE.
Without further adieu…

Predictable and growing demand

People search for 3d printing services, and the demand can easily be measured - by Google Ads Keyword planner or tools like that.

We will know how many people (exactly) are searching for it in the area we are interested in.

There are reasons to believe, that demand will only grow, as I’ve mentioned in the article 15 things needed to start a 3d printing business, if we look at statistics for new manufacturing sites built domestically, the growth is exponential.
And those big projects will make big circles in the small business pond, generating all kinds of demand for smaller manufacturing services (that is how the economy works).

On the other hand.
People don’t search for 3d printed products, they don't care how it's made.
And the market is much more saturated, we will have to compete with Amazon and Alibaba (literally).

We will need to find a very specific item or niche to go for, which is not easy, and brings us to the next reason.

Product ideas will come to you

I’ve been talking to 3DP business owners over the years, and those who make products all found their ideas through Service.

Clients approached them with a custom job, to make something that they couldn’t find as a ready-made thing, available for sale.
They did so, researched further after, and found “their” product, which was based on real, specific demand (pain point).

Ideas could be found differently, but it is much harder, and time/money consuming, while, when you running a Service ideas (multiple) will come to you themselves, and you will be paid money to test them (basically).

This brings us to the next reason.

You can do both - hybrid model

2 models can be combined.
For us, it helped to ensure a smoother load: whenever Service demand was low, we made products or their parts.

We can have the benefits of both models, with almost no additional costs, or risks. We can regulate demand, or turn each off if needed.

The situation is much more controllable and predictable, which is good for business.

Easier for beginners, Instant cashflow

Positive cash flow is very important, especially when starting, and service (agency, buro…) has proven to generate it easier and more stable, than any other models.

One can start a Service with just one printer.
Although I would recommend at least 2 since they tend to go out of order when least convenient. In this case, to make it somewhat sustainable you will probably also need:
  • Additional services: 3d modeling, post-processing…
  • Some “special sauce”: target specific niches, specific approaches, and tactics…
But I know it is possible - I started with 2 Makebots Replicator2 from my bedroom.

When we go for "product-based" we practically choose a manufacturing and distribution model, which is not as hard as it used to be, given the current state of technology, but still consists of many more parts, and requires many more puzzle pieces to come together, to make it stable.
P.S.
Starting or thinking of starting a 3DP business?
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Less risk, more suitable tool for the job

A few things can go wrong with the ”product” model:
  • If we target a specific problem - a “caveat” in some medium or big brand’s product - this caveat could be fixed, and we will be out of business;
  • There will be things we can’t control, like a marketplace policy change, demand dropping for some reason, and so on;
  • If we stumble upon something lucrative/interesting and are not savvy enough to scale quickly, someone else may outcompete us quickly, by using a method like injection molding.
  • We will be in a much broader, much more competitive market.
When making a product, a 3d printer is merely used as a "first step tool", which ideally (if product-market-fit has been found) should be replaced by a "more efficient" mass production method (casting or injection molding).
3d printers can be used as a primal tool, but if we stumble upon something that has scaling potential, there is a lot more sense to make it into mass production (drastically cheaper unit, better quality).

In my experience, many companies prefer to delegate this "first step" to 3d services (it was a substantial part of our pipeline).

That is what a 3d printer is truly good at, and that is what it was made for.
And demand will only grow, as we covered earlier, plus we control the rules and the offer.
And we can pivot much more easily, by slightly tweaking the offer.

Less liability, money upfront.

If I could give only one piece of advice to someone who wants to start a business I would say: Always get paid upfront, Always.

And we can, with a Service business model.
It is not always so for the product model, especially if we working through resellers and distributors.
More risks, headaches, potential losses…I’ve been there.

As a bonus, when we provide services and legally (in our contract or terms of use) state it as so, we are liable (usually) to a lot less, than if we make products.

In conclusion

I hope you’ve got some value out of it.
I’ve learned all those things through experience, and I would've definitely picked the service model if I were to start over again.

To clarify.
It still won't be easy (as any other thing worth doing). If you thinking about starting a 3d printing business (or already did), you will need all basic business components, industry knowledge, and "special ingredients" to make it sustainable.

And you probably have questions.
Some answers can be found in this article - 15 things needed to start a 3d printing business

Or you can save a lot of time and money and use my knowledge and experience
BOOK A CONSULTATION CALL
it is $50/hour, but will save you thousands at least.
Thinking of starting a 3DP business?
Running a 3DP business already?
Have questions?
Save time and money - use my 10 years of knowledge and expertiese.
it is only $50/hour, and will save you a lot more than that.
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