Hubs with excessive low prices are bad for everyone

Matterthings · 2016-08-04T05:42:47.000Z

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Hello Brian and everyone else.

We are proud and thankful to be 3D Hubs members for many years now.

3D Hubs has contributed immensely to increase the popularity of 3d printing but with success certain responsibilities are acquired: we want to ask 3D Hubs to set minimum prices per cm3.

We are NOT proposing FIXED prices but a BASE PRICE that no one can go lower.

It is healthy competition between hubs that a client can upload a model and compare the prices offered by all of us but some hubs seem to be hobbyists that are happy to charge just enough to buy their next spool and by doing so, they harm all of us with their excessive low prices. That is just unethical and unfair competition and will tarnish 3D Hubs reputation in the long run. You know how hard it is to build a business and how fast and easy it can be lost.

Customers ask us why we are “so expensive” when the other hub charges only $2. ( yes, TWO dollars !?!! ) To charge that unrealistic price we would need to reduce the quality of our prints. If this situation persists, soon the clients will find in 3d Hubs only mediocre print jobs.

We have worked very hard for almost three years to get 75 reviews and we constantly monitor other hubs to have our prices at the same range. We used to get one order per week and while we still get inquiries, since the cheap hubs appeared we get a job only once a month. When we ask the client why he did not assign his print to us they say they found another hub with a better price.

That is precisely why there are minimum prices set across all industries. As a customer you know an approximate cost of eggs at any supermarket or the average cost of services like a Laundromat. Prices do vary but they stay within a range, that creates fair competition and to gain customers you would add a discount on support removal, free shipping, same day manufacture, etc. In our opinion this is how things should work and it would be on the benefit of the customers, your hub and 3D Hubs.

Take for example a Hub that is charging $6 for a model that costs between $20 and $40 in all other hubs. He does not realize that the day his printer goes kaputt he will have not made any money to buy another one and will be out of business. In the meantime we are all forced to try to match his offer. It is great to see young entrepreneurs succeed but this is simply unfair competition. If he would charge the correct price he would also be making a lot more money for the same effort and 3D hubs a bigger commission.

We work very hard to make a living of this business, other hubs just want to earn extra money and some do it just for fun. Regardless, a client should pay a fair price for the work that it takes to deliver a 3d print.

Politely we want to ask 3d Hubs to set a minimum price per cm3 that no one can go below.

Thank you.

Claudia and José

Matterthings.

MindFuLL · 2016-08-04T06:41:06.000Z

If this is what you do for a living then a “hobbyist” shouldn’t affect you even if they are doing prints for free.

My response to a previous post on this issue:
“It’s up to you to get paid for what your time is worth, not the market place. That’s what my prices are based on more so than what others are charging. If someone doesn’t want to spend that much then I refer them elsewhere and they probably don’t need my skills or attention to detail. My time costs what it costs. Obviously you have to create value by building a reputation first and attract customers that match your capabilities but after that you need to decide what you are worth and stick to it or you will make yourself miserable, and that would be your fault not 3dhubs. I hope it stays this way.
Some of us focus on volume, some of us on quality or difficult prints, and some of us are into specialty kinds of prints. On top of all that this industry changes every day. Adaptability and variety is crucial to this platform’s survival and attempting to artificially fix prices would be detrimental to it’s growth and credibility.”

I’m not the cheapest in my city by a long shot. I actually think it’s a positive for me if a customer has tried a cheaper hub before placing an order with me(most have) so they have something to compare me to. If someone is cheaper than you but you have better quality then maybe you need to put more effort into making that distinction. If someone is cheaper than you and just as good then… are you familiar with capitalism and the free market? Competition is critical for progress. It’s a pretty well established concept in North America and there is a reason why price fixing is illegal. If 3dhubs took your advice they would be giving an opening for another platform to undercut them entirely.

-Jesse

Matterthings · 2016-08-04T06:49:11.000Z

Hello Jesse.

We agree on what you say about healthy competition but we still believe that not “price fixing” but a base price that covers at least the cost of the filament machine depreciation and operators´ time is reasonable and fair to everyone.

José

MindFuLL · 2016-08-04T07:05:11.000Z

That is actually the definition of price fixing. If someone can afford to give something away indefinitely then it isn’t worth anything. If there is no distinction between what you do and the person who is cheaper then you are indeed overpriced. If someone is offering low prices to enter the market there is nothing wrong with that. You are an established business wanting “protection” from competition. This is the argument of anyone who has ever advocated price fixing.

keebie81 · 2016-08-04T13:07:23.000Z

NO

There will always be someone out there to undercut your price no matter what business you do. You need to show people why you are the better value at your price. If you don’t get the people wanting to pay the bare minimum is it really a loss? Spend your focus on getting the type of customers you want and building their trust in your service.

gregh · 2016-08-04T15:33:53.000Z

I have thought about this too, and a minimum price is not really something I even considered, but these things have a way of levelling out if there is enough work to go around- those with super low prices will soon have to turn jobs away or increase their prices because they can’t cope with the volume -or no longer want to do that much work for that little money.

I think the answer is to drive more volume somehow but right now I think that there is just not that many jobs relative to the number of hubs.

SOC3D · 2016-08-04T17:52:08.000Z

@Matterthings,

I’m very curious about how this came about and as I’ve posted before I’m curious how hubs come up with the prices they do. Can you give a real world example and cost breakdown of a customer order?

garthvh · 2016-08-04T19:38:36.000Z

There was a .25 US cm3 minimum when I started, and for a little while after they dropped the minimum I was listed as low as .18 cm3 with a small startup cost. I don’t miss having the minimum and have generally raised prices over the last year while competing locally with a couple of super low priced hubs.

The business that comes in at .18 cm3 is really not worth worrying about, it only makes sense for a hobbyist trying to break even on a $300 printer kit using $20 a spool filament.

A lot of the customers for the cheapest option also wind up moving up in printer quality as time goes on, they start with the cheapest for a proof and then order a more expensive final version. The people printing thingiverse accessories usually just choose the cheapest hub.

Eugen_1 · 2016-08-04T21:56:56.000Z

Totally agree… Price=Quality 99% of the time…

A $10 part that otherwise would cost $30-$50 elsewhere most definitely implies a very low quality print, a sub standard material, and most certainly the customer would end up with an unusable part…

I have tried sending parts to other hubs for printing that had cheaper prices then my own, just to verify quality, and I can show pictures side by side, for my print and their print which was a much lower price, the difference is like day and night…

For a customer it is very important to realize that by ordering a cheap part and end up not being able to use it because the quality is sub standard and or not as expected, then eventually it will cost the customer even more money, before they get the part they initially wanted…

TruNorth · 2016-08-05T13:03:55.000Z

Along with most people in this thread, I disagree. I have a new-ish hub. I get damn near zero orders. It is NOT because hubs in my area have lower prices. It is because hubs in my area have more reviews. Most people are NOT shopping for the lowest price, they are shopping for the best/most reviews. I looked at your hub, and your reviews seem excellent, and there are many of them. I have some trouble comprehending that you would be threatened by cheap hubs, because many of those cheap hubs are just trying to get orders - to get reviews - to get to your level. You’ve already got an upper hand on the entry level hubs. Making them charge at the same level you are charging does not seem very fair to them either.

Matterthings · 2016-08-05T13:38:15.000Z

In reply to TruNorth.

We have worked very hard for three years to get 75 reviews and we constantly monitor other hubs to have our prices at the same range. By the way, all hubs start with five stars even if they have one review.

We used to get one order per week and while we still get inquiries, since the cheap hubs appeared we get a job only once a month. When we ask the client why he did not assign his print to us they say they found a better price.

One of the cheap hubs has collected 156 reviews in 6 months and his prices are still barely covering his operation costs. He is a 17 year old kid with no expenses, it is great to see young entrepreneurs but he is killing everyone else but the worst part is that now customers are expecting low, unrealistic prices.

That is precisely why there are minimum prices set across all industries. As a customer you know an approximate cost of eggs at any supermarket or the average cost of services like a Laundromat. Prices do vary but they stay within a range, that creates fair competition and to gain customers you would add a discount on support removal, free shipping, same day manufacture, etc. In our opinion this is how things should work and it would be on the benefit of the customers, you and 3D Hubs.

Regards,

Matterthings.

Iceman24k · 2016-08-05T14:32:57.000Z

Agree, and seems like a monopoly or price fixing to me. JUST MY OPINION! Thank God We live in a capitalist economy. 3d hubs has been great to me thus far… I love what they do, and how they do it! I can’t think of a way to make it any more fair. I just worry about myself, and the minimum amount I am happy to print for. I love to print and especially educate those whom have never printed before, I get a lot of personal satisfaction from this, and I consider this as a reward also. 3d printing set aside for a second… I know there are a ton of rivals in my industry That Would LOVE to fix my prices for me lol, but that being said I have seen it befor and time after time(here’s an example)… Kum and Go will pump gas at a loss just to put rival stores out of business. Having my own ability to set my prices is what keeps our markets fair and competitive. and maybe just maybe. This 17yr old knows a thing or two about cornering a market share and is just operating at a loss until he/she puts their competition out of business(or gets them to quit). I look at someone near me charging Way Super Low Prices as a GREAT thing…That way I don’t get the clients that only care about price…but my prices are low I think, but also allow for what I want to accomplish. I base my prices on Cost of filament, time and electric plus other random consumables… I Considered the printers a loss befor I purchased, with all the advances in technology and the rapidly dropping price points. also I am attaching a simple spreadsheet that we started to help us calculate cost. I would absolutely LOVE to see how others are calculating prices. I spent so much time trying to find a great resource to calculate cost ect… with not a ton of options. thank you everyone for taking time to read and HAPPY PRINTING!!! Please Don’t take away our freedoms and free market.
Copy of Formlabs costing.pdf (14.2 KB)

Matterthings · 2016-08-05T14:49:12.000Z

Please read the original post,

We are NOT proposing FIXED prices but a BASE PRICE that no one can go lower.

This will encourage everyone to improve the quality of their prints and offer added values like free shipping, complimentary support removal, etc.

All the products that you buy in any store have a base price unless they are in offer and that is the base of capitalism.

This has nothing to do with freedom but with fairness.

Regards

Claudia and José

MindFuLL · 2016-08-05T15:15:12.000Z

MindFuLL · 2016-08-05T15:16:48.000Z

"Price fixing is an agreement between participants on the same side in a market to buy or sell a product, service, or commodity only at a fixed price, or maintain the market conditions such that the price is maintained at a given level by controlling supply and demand.

The intent of price fixing may be to push the price of a product as high as possible, generally leading to profits for all sellers but may also have the goal to fix, peg, discount, or stabilize prices. The defining characteristic of price fixing is any agreement regarding price, whether expressed or implied."

https://en.wikipedia.org/wiki/Price\_fixing

SOC3D · 2016-08-05T15:19:03.000Z

@Iceman24k,

Very well put.

We use these calculations to find a price range for FDM printing based on PLA/ABS/PETG:

These are rough numbers and ranges the actual figures are considered proprietary.

Electric:

200W-750W Low end and High end

$.15 per KWH cost (Includes lighting and cooling overhead)

$.03 to $.1125 operating cost per hour

Filament:

Wholesale $16 per spool, Retail $25 per spool

Waste 10%

PLA 1.25g/cm3 $.022 to $.034 per cm3 (petg and abs are a little different due to density)

Printer depreciation:

Take the total cost of the printer, divide it by 24 hours, then 30 days then 3 months (or 2160) which is the cost to acquire a new printer every 90 days. For printers over $2,160 we use 180 days or 6 months.
$0.27-$1.04 per hour

3D Hubs fee

Student Discount*

Average failure rate is under 10% of time and materials.

Based on that my last large “Draft Mode” print which is meant for rapid prototypes at a low cost not for production quality or display/presentation prints came in at $.10 per cm3 for a little over $225. The actual print cost including support removal was $168.01 based on the high estimates. Those prices include buying a new $5,000+ printer in 3-6 months (probably a markforged or resin based machine)

MindFuLL · 2016-08-05T15:25:18.000Z

“That is precisely why there are minimum prices set across all industries.”
Where? Your hub must be located in Venezuela.

MindFuLL · 2016-08-05T15:30:41.000Z

Dictionary:
“price-fixing: the maintaining of prices at a certain level by agreement between competing sellers.”

Wikipedia:

"Price fixing is an agreement between participants on the same side in a market to buy or sell a product, service, or commodity only at a fixed price, or maintain the market conditions such that the price is maintained at a given level by controlling supply and demand.

The intent of price fixing may be to push the price of a product as high as possible, generally leading to profits for all sellers but may also have the goal to fix, peg, discount, or stabilize prices. The defining characteristic of price fixing is any agreement regarding price, whether expressed or implied.

Price fixing requires a conspiracy between sellers or buyers. The purpose is to coordinate pricing for mutual benefit of the traders. For example, manufacturers and retailers may conspire to sell at a common “retail” price; set a common minimum sales price,…"

Iceman24k · 2016-08-05T15:32:01.000Z

Awesome Breakdown Miaviator!!! AWESOME! Well composed and thought out, Thank You Very much for this and taking the time to write it! This helps me! THANK YOU!!!

SOC3D · 2016-08-05T15:34:08.000Z

@Matterthings and others,

In case you are not aware, 3D Hubs already has “a base price that no one can go lower”. https://puu.sh/qqOvK/5bb3572f47.png I’ve run into this lack of freedom several times. I’ve tried to remove the startup cost and tried to give away free prints at Christmas time.

Imagine if someone is using a filament extruder they built at home and printing with FREE recycled plastic on a 3D printer they built or bought for next to nothing? Cost per cm3 could be down to $.01-$.02 or even sub penny. That Hub would already be forced to charge $1 per order + at least $.01 per cm3 even though there is a good chance they could make a profit at $.0075-$.008 per cm3. That is what the free market is about.