by Greg Walters
A recent article on America’s dying industries on the website 24/7 Wall St. included industries such as “curtain and linen mills,” “formal wear and costume rental” and “professional employer organizations.” To perhaps no one’s surprise it also included industries including “bookstores and news dealers,” “newspaper publishers,” “other publishers” and, coming in last on the list, “office supplies, except paper, manufacturing.”
Following on to the last item, the site goes on to explain, “Office supplies manufacturing is one of many industries in the United States negatively affected by the increasing digitization of the workplace ... The increasing ability to store documents and other data virtually has rendered fax machines and photocopiers less necessary and reduced demand for office supplies manufacturing. Employment in the industry has fallen by 42.1 percent since 2007, among the most of any sector.”
Tell us something we don’t know.
The search for new revenue streams continues. Managed print services promised a temporary, yet alternative source, as did managed IT services, yet few have weaned off the manufacturer. Most of our revenue still comes from machines and attached service agreements, the same way it did back in the 1970s.
As the great decline continues, what’s the next wave for we who survive?
I’ve always suggested everything as a service — copiers, coffee machines, energy management, water, first aid stations — all require periodic, physical support. When considered like that, it looks like everything can be a source of revenue.
“Everything” is a big word and difficult to conceptualize, so let’s consider verticals as an example. Construction, manufacturing, wholesale/distribution, logistics, retail, finance and SLED (state and local education) — heck, every business requires services of some sort. It isn’t a bunch of verticals; “X as a service” is one giant horizontal.
That’s a really big example. Let’s narrow the field and pick a product and realm: 3D printers sold to the education niche.
I am the first to say, “Never, ever, ever respond to an RFP from the education sector - unless you wrote the bid.” SLED accounts are notorious for seeking the lowest cost and joyfully swimming in an ocean of bureaucracy. Decisions in this area take a long time and sometimes defy logic.
On the other hand, SLED installs move devices out the door without the burden of high acquisition costs and for the direct channel, placements increase market share — business solutions can be shallow if they exist at all. So it feels odd to me, even a little sour, to recommend looking to the education sector for additional revenue streams.
But with 3D printing, that’s exactly what I’m proposing.
“Never mind the computer on every desktop, that’s a given. In the near future, teachers and students will want or have a 3D printer on the desk to help them learn core Science, Technology, Engineering and Mathematics (STEM) principles,” said TJ McCue in a 2011 Forbes article.
Think back to the days of the Apple IIe; first in schools, then kitchens across the country. Those first PCs were the shape of things to come.Today’s 3D printers are like yesterday’s enterprise, the “Apple IIe” only better - there is a legitimate service-based revenue model in 3D printing:
Maintenance and support. Heavy use and inexperienced users will take a toll on the machines - many students using a single printer can lead to breakdowns. The average service package can sell for approximately $2,000 a year, including continued tech support and a limited parts warranty. Details, as you can imagine, are fluid.
Software. Companies provide proprietary software for their printers. Third parties often modify available software to work with their models. The 3D design software market is growing, and many products are supported by a variety of operating systems.
Printing materials. These printers have affordable materials. A spool of plastic filament can cost less than $30, and a one-kilogram spool of filament can create more than 350 full-size chess pieces. Imagine placing 10 3D printers in each classroom - that’s an estimated $20,000 in yearly service revenue for each classroom, before supplies.
3D printer programs in the copier channel are nascent, yet growing. If you haven’t reached out to a manufacturer or distributor yet, it’s not too late.
Can you afford not to explore?