How does someone charge for a 3D printed product if they want to go into selling? Being such a young industry, there seems to be no standard pricing in the 3D product retail market for newbies to follow. What things should one consider when charging for individual items? Tom Hazzard and Tracy Hazzard enumerate the things you need to factor in when setting prices for your creative works. They also talk about knowing the market around your product and the X-factor in product pricing.
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How To Charge For A 3D Printed Product
This is the Ask Us Anything segment.
It’s been a lot of almost anything.
There’s been anything-anything but most of it is all focused around 3D printing of some kind. We haven’t gotten a lot of other questions but this one is interesting because it touches on something that someone who might have the capability on 3D printing or the engineering side of it isn’t usually handling it. We’re talking about marketing and costing specifically. What’s the question?
Someone wrote in saying, “I’m struggling with what to charge for my 3D printing products?” They’re making a product using 3D printing and having trouble deciding what to charge for it. There are several things to consider. I’ll go over the most basic one first and maybe you can go into a little bit more of some details because you’ve been writing on this subject.
I’ve been writing on it a little more on the modeling side, what to charge for a model which is more complicated. If you’re going to do a downloadable model, in this case, I wrote a guest blog for Pinshape.
A lot of it still applies.
It’s the same. It’s harder to figure out the model because you don’t know how many people are going to buy it. You don’t make it to order, you have a file and you’ve got to wait for it.The higher the price you charge, the lower the volume of sales will be. Click To Tweet
When you have a product in the most basic sense, one of the things you at least want to be aware of, because it will help you make better decisions, is there an existing market for the type of product that you’re selling. What are those other products selling for? What are any of the differences between your product and those? Understanding how you fit into this market landscape will help you in a portion of this calculation. If you’re doing something completely new and you’re carving new ground, that may not help you as much.
It’s a little different if you’re doing art. If your piece is in essence a piece of art, so let’s use the example of our holiday angel. We put it on Etsy and we had a struggle with how to charge for that because if you think about it, for $9.99 at Hallmark, you can buy about any plastic ornament imaginable that’s high color and in Tinkerbell or whatever shape you want. That sets a low precedent for it. Our angel was a little bit more artistic, but also it was custom and personalized.
You could put any message you wanted to the bottom of it. It had the year on it. It’s already noted that it was that year. You could have put somebody’s name on it if you wanted to make it a memorial angel or somebody’s initials. There was the custom aspect to it so that had a premium upcharge. Anytime you engrave or add something to something like that, there’s always a premium. From our experience, it’s about 20% for customization in the general market.
In the general market, that’s true. 3D printing has been so unique and in the news all so much the last few years that it may even be able to come in a little bit higher premium than that. It will level out and maybe 20% is the most you could justify for customizing.
I was saying that it was 20% for anything custom featured. It doesn’t matter that it is 3D printing. I’m throwing that aside for a moment. A custom feature could be it. At that point, you’re at $10 and you could charge $2 more so you’re at $12. That’s still a little low for the complexity, beauty, quality, the artistic nature of it and it doesn’t reflect the number of design hours put into it. You put a lot of hours into designing it. It was a couple of hundred and granted some of that was a learning curve.
There was some learning curve especially with working out the issues of getting it to print on the machine with the quality level we wanted and without having to do any post-processing cleanup as little as possible. There was a lot of trial and error there.
That’s a cost factor though. If you have to clean it up, break off materials and clean up all the little hairs on it, which sometimes happens on prints. Labor and your time are expensive so you have to consider that into the cost of it as well and properly judge for that. You also need to consider packaging, how you’re delivering it to the customer and all of those things like that. Those are little factors, but those are factors you can figure out though based on per piece.
What did we charge for our angel?
We charged $39.99. We charged $40. We did that because it wasn’t about selling many. It was more about having it out there.
It was also a test for us, wasn’t it?
I wanted to see what things people asked for in messages on there or if they ask for special colors or anything like that. It started with a little test to see what is there. The thing about it is, for us, it was more about making sure that we provided value because of the design of it. We wanted to set a high bar for artistic value, but that’s our personal take on it. You might not be that. It might be something inexpensive and you want it to sell faster. You have to keep in mind, the higher the price to charge, the lower the volume will be so you won’t sell as many. It’s that thing.
You don’t have tooling and inventory. These things are pluses that need to be figured out if you’re carrying costs on another product. If you anticipate that you’re going to sell 100 units, and you have to tool for that, and the tooling costs you $100, which it won’t, it will cost you lots more than that. That’s $1 of cost for the amortized cost for that tooling over the course of the run of it and most items are seasonal. For us, this would have been only one season.
If we had to tool for the angel, which would have been impossible, we would have done it. It would have been a waste of time and you would have had to put 2014 in it. That would have been something you would have been able to do. You would have had to either make a special tool for it so you could take it out and put a new piece in there to do it the next year or you have to trash your tool and start again. From that perspective, you have to think about it. This is a complex subject so I have a formula. It’s time to design plus time to build. That’s the second factor that we haven’t talked about yet and how long does it take to build on your machine. We decided that we weren’t going to charge on machine time. Many people do. 3D Hubs is built on charging a certain amount for machine time or machine hours.Don’t give your creative work away cheaply; keep a value for it. Click To Tweet
There’s nothing wrong with doing that and putting that into your business model. We felt for the products that we’re doing that takes such an incredible effort to create. If we did that, you’d be buying a Maserati and no one will pay for it.
We realized that we wanted visibility for the design, get it out there and still keep a value for it. Don’t give it away cheaply but still keep a value for it that is decent and manageable in the high end of ornaments in this case and we study that. We studied the market and decided what the market can bear. We picked the high end of that, but we didn’t charge per minute for the machine. If we did, it would have been about three times the cost, in that particular case.
I agree with you.
That would have been $120 for an ornament.
We wouldn’t have sold any of those ornaments.
Maybe my mom would have bought one that would have been about it. The time to build is a critical factor for you. You need to keep it low and to keep it on the side that if you were to start to scale up, having multiple sheet machines running, creating a little inventory stock, or eventually tooling for it, which you might do in the future in certain businesses. You might be running a flexible test of what you might want to tool for before you start to pay for that expensive tooling.
When you hit that point where it’s no longer viable to be printing it in so many hours and in time, you’re ready for that. You’re ready to consider, “Do I need more machines? Do I need more tools? What is the thing that I’m going to do with it?” We factor that in and plan that. We study what it is but we then give it an adjustment factor and say, “What would it be in the future if it were at thousands of units sold or at this type of manufacturing instead?” We make an adjustment for that and come to a middle ground.
We find that we’re still profitable on these items. We’re not advocating selling things at a loss and we’re not selling things at a loss ourselves because we’re in this to make money and be in business. We found that even when we took the machine time out, we could have a price of a product that had a justifiable value proposition in the market and we can still make money out of it.
What we don’t do is amortize the cost of the machine itself because the machine itself was going to be here regardless of whether we printed a single product on it but that might be the case. You’re buying a machine specifically for making this product, then you may want to amortize the cost of that machine over a certain number of units or a certain number of years.
What we’re finding is, as we’re looking at some of the products that we’re developing and starting to manufacture to sell 3D printed products, we’re finding that there are newer machines coming out that are less expensive and the cost of the machine is becoming a smaller and smaller factor in the equation.
We put a nominal amount of money in for materials because it’s such a small amount.
There’s no problem with using any material available for desktop 3D printing in making a product.
The only exception to do that is if you want to do something with metals because that is costly. It’s a costly add on. It’s raising your perceived value so you can always charge more for a metal item, especially when in precious metals. You can do that on Shapeways and all of those. One good way to test it out is for you to go into Shapeways, i.materialise, or any of those places and plug your model in and it will tell you how much it costs in any one of those types of metals or processes. It will tell you how much they charge for it. Whatever they charge for it, you may want to think because that may be similar to what you can say, “That is a comparable 3D printed product price.” It may not be for the market price you need, but it’s right for 3D printed product prices because they already have their profit built into that.
They are calculating their machine time, ROI, amortizing, and everything they had to buy.
It’s a quick and dirty way for you to quickly go in and sit and do a double-check and say, “Other 3D print products that are similar to this are costing this much money. That makes sense.” Let’s gut check that price against what the market can bear. Gut checked the angel ornament, which was $40 by the way on i.materialise when we had that one made there. It cost us $40 with shipping and everything. That’s the price that it was as a 3D printed product.
When I gut checked the marketplace and I looked on Amazon at angels and all these other things, I thought that $40 was at the high end of the range, but there were ones that were hundreds of dollars because they were collectibles. I thought our angel was a collectible. It’s a one-year thing, you also have a special message you can do so custom features. I wasn’t as high as some of those collectible items granted, they’re probably big brands. I put us in the middle of the high end there and it worked for us. That’s how you do it. It’s an art, not a science. I wish it was.
There’s no exact formula we could give you the plugin and say, “That’s where you should be.” Even though you do have formulas, Tracy, and you do calculate these things. There’s always an X factor.
The X factor for me is the skill and the artistic nature of it. Can this be made any other way by any other technique? If it can’t, then that’s worth a value.
Do not undervalue your creative works.
Do not undervalue your design time and the net result of that.
It will do you a disservice and it doesn’t help the rest of us in this industry either.
Giving away 3D printed products doesn’t help. I know that’s a long answer to your question and probably would have been easier if you sent us a product and said, “What do you think we should charge?” The next time you send us an Ask Us, let’s be specific. Maybe we could help someone out there.
It’s a good question nonetheless and I’m glad we talked about it.
If you or anyone you know has a question for us, we’re going to take a little hiatus from Ask Us Anything but we’re storing those questions and we’re going to get back them.
We will reply to you regardless so you can get some answers you need, but it’s going to fall on the trade show season here in Southern California. We’re going to get out of the studio more to gather more content to bring to you.
Thanks for reading, everyone. We’ll talk to you next time.
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