3-D Printing, a Loss Leader?

All y’all reading this are familiar with the term Loss Leader right? Well, if you didn’t know, a Loss Leader is basically a retail strategy where the retailer will advertise a product at a fantastic price and will even lose money on it. This fantastic deal will lead people into the store. While shopping, the customer will find the value-priced product alongside more profitable goods sold by the retailer.

Often when I see our 3-D Printer collecting spider webs I’m reminded why we haven’t sold the machine. And that reason is that it has become our loss leader by accident.

When I purchased the 3-D Printer back in 2009 I had high hopes that we’d be printing parts on a daily basis alongside our aggressive CNC Machines. That hasn’t happened. I’ve actually used it more often to 3-D print and fix items around my house. My neighbors have been impressed!

Fortunately, public awareness and general interest in 3-D Printing has grown considerably over the past 5 years which has prompted many to call me to do business with me.

Unfortunately, there are many limitations with 3-D Printing which have been revealed to me and I share these limitations with prospective customers.

About 90% of the time we’ll end up using a CNC machine to make their parts. With the CNC machine we can hold tighter dimensional tolerances and can manufacture from almost any material we’d like including plastic, aluminum and stainless steel. Oh, and the volume output of a CNC is unmatched by a 3-D printer.

With the 3-D printer, we’re also limited to the use of white ABS plastic and tolerances of +/- .010″, which in the precision manufacturing industry is basically a mile of tolerance and typically unacceptable for our customers requirements.

Granted, the newer 3-D Printers hold tighter tolerances and use a broad range of plastic material types and colors. However, I’m unwilling to risk the amount of capital required to leap into a possibly better loss leader.

For the record, the hourly rate that I bill for the 3-D Printer is equal to the hourly rate of the CNC machines, so we aren’t up-selling the customer with a greedy motive. In my case, the initial “loss” was a capital expenditure which has become a profit center through more CNC Machining work.

Machinists depending on CNC work for job security have rightfully felt threatened by additive manufacturing technologies.

In my shop, their jobs are secure. I’ll continue to be amazed at their skill of wrangling with a chunk of raw material until it becomes a precision part worthy to be airborne in aviation, or become a titanium implanted part connecting the human femur bone to the pelvis.

Journeyman machinists using automated machines are far more amazing than 3-D Printers!

What parts can we make for you with a CNC Machine?

Source: Jason M LaRock
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