Dear JD:
I've made a few comments in-line within the body of your letter:
I've recently listed my company on your service bureau listing site. I am planning to
begin offering my FDM RP machines as rental units.
***EG: My opinion, at least at first blush, is that you should be very careful about the
basic premise. There are some possibly very strong forces operating here that you should
take into consideration: 1) Declining prices for machinery - potentially even more rapid
than in the past; 2) Low prices for SB work available from numerous vendors and
technologies over the web - with a good likelihood that prices will decline further,
etc.
I also question whether it matters to prospects that they do the work themselves at
their own location. In my experience, that's not how engineers work. I don't think you can
make a parallel argument to how people use or rent the equipment you have experience with.
Also. even though the machinery is much simpler to use than it was, unless it's completely
turn-key, there will be a ramp-up barrier that will be stubbornly resisted. Will they have
to hook this up to their own computers, install SW, etc.? I think you'll find resistance
to that. Especially, since all they have to do is squirt a file someplace and have someone
else do it in a day or 2.
The veracity of a business premise derives from talking to the prospects and getting
their input. Beyond a day or 2 of time, saving minor shipping costs, I don't see any
customer benefit - and I see a lot of effort for the customer. No matter how simple the
equipment, there's always a learning curve. Also, is it easier to schedule a rental, spend
hours of your own time - than get a part next day from multiple sources?
To my knowledge, there are no other rental services available in this industry. I was
wondering if you were aware of any others? I believe that due to technological advances,
this equipment has approached a level of ease of use that people who work in appropriate
industries will be technically capable to operate these machines.
***EG: I don't think there are any other rental services, but there are places for
leasing such as NCP, (one of our advertisers). They specialize in the big-iron SLA and SLS
systems, however, and what they do is quite different. Ask yourself, What are other
parallel examples of engineering equipment rentals in industry? As I mentioned, the
industry you do have experience in, is probably not appropriate.
If a company so desired, their parts could be produced at their own location, on their own
schedule, which will bring down their production costs by allowing them to build multiple
parts per rental session, with no related shipping or time constraints.
***EG: Why would they want to do that? There are other costs they would incur as I've
described above. It's not just out of pocket most people would be concerned with - it's
the time and effort and uncertainty of results.
I need to do more research on average model/ part cost and the actual hourly-run cost of
the machines. I know this is a lot of information, but your opinion would be of great
assistance to me.
***EG: Probably the most critical issue in determining price, is what fraction of the
time the machines can be kept in the field generating revenue. Without study there's no
way to tell that. Also, what happens if the cost of systems continues to rapidly decline?
Can you ever get your money back? What models do (or did) PC leasing companies use?
There might well be a business here - and your state would be a good place to try it
because you have a large engineering community - and other industry possibilities, as
well. Sorry to not be more encouraging, but this is something you should think through and
gather data on before going ahead.
Thanks and best regards,
Ed
Ed Grenda
Castle Island Co.
The Worldwide Guide to Rapid Prototyping
