Business Solutions magazine asked TJ Trojan, senior vice president of product management for SYNNEX Corporation, about opportunities to sell 3D printers, anticipated margins, and how to add 3D printers to your line card.
BSM: In which verticals can VARs find opportunities to sell 3D printers? What are the applications?
Trojan: Key verticals for 3D printers include:
There is also a burgeoning consumer market for the low-end and some production services. Core applications can be made in architecture, automotive, aerospace, airframe, and health-related products such as dental prosthetics, implants, prototypes, jewelry, and castings.
Applications are almost unlimited from a creative and design perspective. There can be small limitations related to available materials and how those materials can be used in terms of strength, flexibility, durability, heat resistance and biocompatibility. However, available materials continue to increase. 3D printing has more than 100 material options today including plastic, nylon, metal, rubber, wax, and composite that can be used for a wide range of purposes. In early January, 3D Systems announced new materials including ceramic and edible materials.
BSM: How lucrative can 3D printer sales be? How large are sales and what is the typical margin?
Trojan: 3D print can be very lucrative, as it offers no waste, a high degree of customization, extreme accuracy, easy duplication and low overhead for short run costs. Average sales prices are much higher than typical IT products and surpass six digits for high-end products. Growth estimates for 3D printer sales vary, but 30 percent CAGR is a good estimate. According to Wohlers and Associates, the 3D printer market is approximately $2.2B, with the entire value chain sitting around $30B worldwide. VARs who are willing to invest in dedicated and trained sales teams and technical infrastructure will see atypically high margins.
BSM: Do 3D printers provide VARs an opportunity for recurring revenue via consumable (i.e. the media/plastic) sales?
Trojan: Beyond the hardware and materials, which are consumable in nature and need to be consistently replenished, there are great opportunities for recurring revenue associated with the value chain ecosystem that 3D printing provides. This includes services, third-party production/tooling (perhaps through a service bureaus or the manufacturer), content/application, and development sales and use.
BSM: How much competition will VARs face if they decide to sell 3D printers?
Trojan: Though there will be significant competition on the low end of the market, competition will be limited for mid-range and high-end products. Higher end segments will require formal authorization that requires training, support, and expertise. As a result, competition will be limited and margins will be more generally protected.
BSM: What specialized knowledge is needed to sell 3D printers? Where can VARs learn more to get educated?
Trojan: VARs should take advantage of the resources offered by their distributor such as sales training and enablement programs and support, marketing programs, and services support. VARs who utilize these types of offerings will have an easier time breaking into the 3D printer market. Once a VAR adds 3D printers to their product line, those who continue to invest in education for their teams will see the most success.
BSM: What else do VARs need to know before adding 3D printers to their line cards?
Trojan: VARs who add 3D printers to the line cards will see high growth and margin potential, high ASPs and service and consumables annuity streams. Further, VARs who incorporate value-adds beyond hardware and material sales will stay ahead in 3D printing. Once 3D printers are well established on a VARs line card, they will see the benefits of offering a leading edge, next-generation technology with plentiful vertical market applications.
Image credit: 3D printer photo is © 2013 Creative Tools, used under a Creative Commons Attribution license: http://creativecommons.org/licenses/by/3.0/