Trying to figure out how much to sell your 3D printed product for? It’s trickier than you thought right?
If you’re like me, you’re not a trained sales manager, but rather, a technical person trying to figure out the business side of things. We’ll you’re in luck because I’ve created a resource and a philosophy to help make the pricing decision for folks like us a bit easier.
Pick a price that you as a customer would find reasonable given what the product is and does, while also considering the available substitutes. Compare that price to your costs to make sure it is a viable opportunity worth your time. Then stick with your price unless evidence suggests you need to change it to accommodate demand (or the lack thereof).
Part 1: Figuring out your cost to operate:
I created an excel document to quantify the true cost to produce 3D printed parts. These are the primary factors considered:
- Filament Consumption: The largest and most obvious cost is the consumable material used.
To find the per job cost I use Repetier-Host & Slic3r to slice up my 3d model and calculate how much filament will get used per job in cm^3. I take that number and convert it into grams based on the density of the plastic I’m using.
For a frame of reference, a 100% solid 4.6cm plastic cube would be 100 cm^3. In PLA, in the brands I prefer, this costs:
100 cm^3 * 23 $/kg / (1000 g / 1.25 g/cm^3) = $2.88
Most things are not printed solid of course, but this is automatically considered by your slicer when it generates the filament use per job.
All of the following categories I’ve lumped together in the worksheet as “Printer Cost to Operate”, and assigned them a lump hourly rate. It’s important to have a charge by the hour function in the worksheet because longer prints have hidden costs that aren’t related to the filament cost. Prints with fine layers use the same amount of plastic as those with coarse layers, but more layers means more time which comes with a measurable cost.
- Machine Depreciation: If my $2000 printer lasts 5 years of use at 5 hours per day, then the cost to operate it is:
2000/(365*5*5) = 22 cents/hr.
- Maintenance: Blue tape, Elmer’s glue, grease, machine oil, scraper tools, etc. I anticipate spending $100 on these items over a 5 year period. So maintenance for that 5 hrs of printing per day costs:
100 / (365 * 5 * 5) = 1.1 cents/hr.
- Electricity: ~200W of power at 0.12$/kWh costs:
200 * 0.12 / 1000 = 2.4 cents/hr.
- Failure Rate: After a rocky introduction with my new printer, I’ve achieved a super reliable state (by slowing it down) and my failure rate is zero. (Materials wasted on prototypes that I don’t like is a different cost, not considered here.) Just in case though I’ll add 1% to the total:
“Printer Cost to Operate” = 1.01 * (22 + 1.1 + 2.4 ) = 25.755 cents/hr total, excluding filament
- Labor: Time spent running a printer is automated, but human intervention is required for setup & post processing. This is useful to play with for determining end price, but I also like to leave this set at $0/hr and instead divide ‘total expected profit’ by ‘total human hours required’ to see how much I’d earn per hour without adding additional billing for it.
- Taxes & Fees: Credit card readers, Paypal, Ebay, whatever you use to process non-cash payments will cost you a percentage of the total transaction. Additionally, plan on sharing some of your profits with Uncle Sam or going to jail. Whatever you prefer. Here’s some solid advice on figuring out how to deal with taxes on your side gig.
- Shipping consumables: If you sell goods online, your product isn’t just your parts. It’s the entire package you drop into the mailbox. Printing paper, padded envelopes, packing list sticky pouches, shipping tape, whatever. This cost will vary depending on what you’re shipping so I add this cost as a line item along with the rest of the non-printed components.
Alternative Cost Calculators: If you don’t like using excel here’s a couple other calculators I like:
- A free Android App: Price My Print.
- http://3dprintingpricecheck.com which compares prices at 8 online vendors for printed parts in various materials.
Part 2: Picking a Price, Notes by category:
As I discussed last time, all possible 3D printing for profit activities fit into one of 3 categories:
- Services (Print for Hire):
People should expect to pay top dollar if they want you to spend time making a custom widget to their specifications. Forget the cost of plastic, I’m a professional and my time is very valuable.
In the realm of 3D printing, getting expertise takes significant time and effort to acquire. I learned what I know about 3d printing by reading, talking to people, and by melting lots of plastic.
How do I know how to make great parts that work as intended? Because my ass has spent time sitting in the lab figuring out firsthand the actual physical effects of controllable variables.
This means literally changing ONE variable in the program or adjusting one piece of hardware, then reprinting the same calibration model over and over again. You have to watch the filament flow through the extruder and onto the platform line by line to pick up subtleties. Only by doing that until your trashcan is full of failures and your desk is full of wins, can you accurately predict print outcomes.
But how much is my time and expertise worth?
There is an old story of a boilermaker who was hired to fix a huge steamship boiler system that was not working well.
After listening to the description of the problems and asking a few questions, he went to the boiler room. He looked at the maze of twisting pipes, listened to the thump of the boiler and the hiss of the escaping steam for a few minutes, and felt some pipes with his hands. Then he hummed softly to himself, reached into his overalls and took out a small hammer, and tapped a bright red valve one time. *TINK*. Immediately, the entire system began working perfectly again and the boilermaker went home.
When the steamship owner received a bill for one thousand dollars, he became outraged and complained that the boilermaker had only been in the engine room for fifteen minutes and requested an itemized bill. So the boilermaker sent him a bill that reads as follows:
For tapping the valve: $.50
For knowing where to tap: $999.50
You’re the pro, you tell me
2. Standardized Customized Goods:
The idea behind selling a standardized customized line of goods is that you retain a competitive edge over your customer’s alternative options.
Ideally the edge comes from your exclusive access to something like 3D models or special equipment (reason to price higher). Or from your low cost advantage due to buying components in bulk (allows you more price flexibility). Or both.
Regarding the build in bulk portion, it’s unfortunate that 3d printed plastic parts cost the same per unit in terms of time & materials no matter how many you make. But there are benefits to printing many of the same thing repeatedly.
Every widget beyond the first is brainless to make once the system is proven. No time or material need be wasted on testing anything. Additionally, if you need to make lots of the same plastic widgets you can batch large jobs together to make better use of your time.
But if you are selling a standard good another win comes when you incorporate some specialty non-printed parts into the mix. Essential hardware that is hard to get, hard to make, or cost prohibitive to buy piecemeal but reasonable if bought in bulk.
Imagine a widget assembly that takes thirty very different $0.25 parts. The shipping costs and inconvenience of buying them piecemeal would be a significant barrier to anyone wanting make their own vs buy it from you. But for tiny parts, the cost to ship one is the exact same as it is to ship dozens. A significant price advantage can be had quickly even if making as few as 30 widget assemblies, as seen below.
(The worksheet I created doesn’t get in depth on this part, but I made sure to leave a way to roughly estimate the change in cost per unit when making many widgets at once. All the component line items in the worksheet are considered variable costs, but the one-time cost of shipping everything to my door is left as a fixed cost.)
3. Information (3D Printable Files/Digital goods):
Have you ever designed a 3D model and wondered how much you could sell it for? Spoiler Alert: it’s not much. (Most models are between $0-$10)
Why is that? I think we can understand better by comparing 3D models to iPhone apps.
What is the most you’ve ever paid for an IPhone app? I’m reluctant to pay more than 99 cents, even though I know that a lot of time and expertise went into making that app. Intangible items simply have less perceived value than physical ones. Part of this is because there is no way to test their quality before you buy. (Apps and 3D models don’t have trial versions.)
Most app purchases are one time transactions to boot, so the app maker only gets that 99 cents once per customer! That’s OK if there are lots more fish in the sea, but the market size for 3D models isn’t as big as the market for iPhone apps.
Another thing paid apps and 3D models have in common is a high level of competition from free alternatives. App sellers often deal with this by changing their business model. They make the money back by selling advertising space or with tempting in-app purchase offers.
In the same way, it’s often the case that giving away your 3D models for free can be more profitable than attempting to sell them.
The first way to benefit is by affiliate sales, as discussed in my previous article. For example, giving away a proven model for a circuit board case along with an affiliate link to buy that circuit board. Win-Win for all.
The second way to benefit assumes you have other products or services for sale. In this case giving a 3D model away for free sacrifices a little direct profit for a much more valuable chance to present your other products to potential customers.
It works similarly to the free sample strategy you see in fancy grocery stores on weekends.
Here’s the deal: Visibility has a real cost and a real value. You can’t sell something if people don’t know you exist, so unless you want to pay for advertising you’ll have to give something away to get people’s attention.
Sometimes this tradeoff is worth it, sometimes not. It depends on the model and the situation. Here’s my set of rules to determine when to give vs sell 3d models:
- Which is greater in your case: Anticipated profit from file sales? OR Anticipated value of advertising + anticipated profit from affiliate sales?
- Is your 3D model an accessory or an essential part of another device? Give accessories, sell essentials.
- Is your model complex and difficult to copy? Price accordingly.
- Does the printed version of your model require vitamins (non-printed parts) to be functional? This is an impediment to the end user and they are less likely to buy it unless the vitamins are cheap/easy to acquire.
- How does the perceived value of your model compare to its actual value when printed? I.e. A model of a hair brush may be complex but brushes are common & cheap so the model is worthless. Compare that to this model of a butterfly knife style comb which was easier to model but is really cool. I’d pay for that model.
Remember: Photos of printed parts increases the value of the model by proving it works.
Or despite all of the above ‘rules’ you could just be an awesome human and give great stuff away for free anyway! The 3D printing community loves it’s free content creators, but no one will complain if you at least put your logo on the bottom of your free model while you’re at it.
If you do decide to sell your models I recommend Pinshape.com. It costs nothing to list and it stays up forever. They tack a healthy a 30% markup on your chosen list price but the quality of the website is excellent and the user base is huge.
Optimizing Price Point:
Still having trouble settling on a fair price for your 3D printed parts? Well what if I told you that any price you choose will be the wrong one.
Econ 101 says graphing price vs ‘quantity demanded’ will create a ‘demand curve’. Setting your price means choosing a single point on that curve and by doing so you will leave some combination of uncaptured customers and uncaptured value on the table.
There is no exact right answer and some inefficiency is a fact of life. So don’t let fear of picking wrong hold you back from using the techniques shared in this article to make an educated decision and move forward.
Last Word: I couldn’t not include this part because I thought it was interesting! The problem of optimizing a single price point isn’t just a challenge for individuals, everybody has to abide by ‘one-product-one-price’ limitation.
The way companies get around this is by selling multiple versions of the same product with marginal differences. For example, Apple’s iPhone models have easily altered characteristics like memory storage size and processing speed. (Think model 5C vs 5S). This enables them to appeal to people willing to spend more and to people who are only interested in cheaper models. This strategy works great as long as the cheaper product offer doesn’t steal opportunities to sell higher priced ones.