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Why do commercial production runs of <1000 models outsource to China / use injection moulding over 3D-printing?

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ShaneC
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Just trying to understand the logic behind producing the models in China / Asia using injection moulding vs. doing it locally using SLA printing.

It seems sort-of crazy to spend €20-50K (if blog posts from British producers are to be believed) for runs of 500-1000 locomotives on moulds alone and having 12-18 month lead times on new products. Is it to do with labor costs associated with the painting & assembly that more pushes things to China? Or skepticism from modellers over 3D-printing quality (better than injection moulded for newer SLA printing).

From some quick maths it seems like local production would be on-par for costs with cheaper material but higher labour costs and no shipping costs but while cutting lead times by i'd say ~75-80%. Unless my costings are way off because I've only printed some scratch-built models for myself and nothing commercial.

Shane.

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14 hours ago, ShaneC said:

That's painted and assembled as well I'd imagine, not just the body printed?

No,  just parts printed.

And bear in mind, its not the number of products launched in a year that generates a return, but the volume of products over time you can generated from the capital spend (the R&D and tooling cost). Thus, the lowest cost of labour is key. Our last run of accurascale wagons, took 73 assembly workers, 14 weeks to complete and paint and box. When you are in the 40-50,000 hour range for a run of wagons, the cost of labour becomes almost the single largest impact on price.

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Posted (edited)
6 hours ago, BosKonay said:

No,  just parts printed.

And bear in mind, its not the number of products launched in a year that generates a return, but the volume of products over time you can generated from the capital spend (the R&D and tooling cost). Thus, the lowest cost of labour is key. Our last run of accurascale wagons, took 73 assembly workers, 14 weeks to complete and paint and box. When you are in the 40-50,000 hour range for a run of wagons, the cost of labour becomes almost the single largest impact on price.

Damn £3000 for just printed parts for a prototype is a complete rip-off.

You could buy a desktop MSLA printer capable of printing 10-15 locos worth of parts a day for that money and enough consumables / resin to print for a month too.

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2 hours ago, ShaneC said:

Damn £3000 for just printed parts for a prototype is a complete rip-off.

You could buy a desktop MSLA printer capable of printing 10-15 locos worth of parts a day for that money and enough consumables / resin to print for a month too.

That’s quite normal costs for ‘proper’ SLA prints. Bear in mind it was over 100 parts also. Which is about a third as many go into a real one. 

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The only major European manufacturer that I'm aware of that doesn't produce in China is Märklin.

They did at one stage but in recent years (starting about ten years ago) began shifting production from China to Hungary.

Now all of their production is either in Germany or Hungary but the labour intensive operations are carried out in Hungary.

The German plant does some of the highly automated moulding/casting work, shipping the parts to Hungary for final assembly. 

I see no way to do final assembly of highly detailed RTR models in a non low wage economy without the models becoming significantly more expensive, certainly pricing me out of the hobby. That's lose lose surely. The Chinese (or Hungarian or whatever) employee loses their job and we lose our models as they simply wouldn't sell at those price points.

I think 3d printing will have a bigger impact on the hobby in future but for smaller runs where the cost of making the tooling simply can't be justified. I think the technology will make previously too niche models viable, but not cheaper. I think the popular, already viable models, will continue to be made using injection moulding for the foreseeable future.

 

 

 

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1 hour ago, murphaph said:

The only major European manufacturer that I'm aware of that doesn't produce in China is Märklin.

They did at one stage but in recent years (starting about ten years ago) began shifting production from China to Hungary.

Now all of their production is either in Germany or Hungary but the labour intensive operations are carried out in Hungary.

The German plant does some of the highly automated moulding/casting work, shipping the parts to Hungary for final assembly.

 

Also worth pointing out that Hungary is even cheaper than China for labour.

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Posted (edited)
1 hour ago, murphaph said:

detailed RTR models in a non low wage economy without the models becoming significantly more expensive, certainly pricing me out of the hobby.

You mentioned Marklin but there is others - perhaps none that are too popular in the European market.

Micro-Trains (one of the largest N scale producers globally) has their production fully in the US, a quick search of their jobs listings shows they pay $11-12/hour an hour for semi-skilled painting/assembly workers, that's about equivalent to our minimum wage right now and $14-18/hour for skilled workers. They undercut most of the China-produced models with similar levels of detail on price by 20-30%..

There's also Kato who manufacture in Japan - not a country known for cheap labour.

If you search up for videos of the Marklin factory on YouTube and then compare with the factory tour videos of say Rapido - who have moved production within China multiple times in search of cheaper labour, there's clearly great time savings that can be achieved with automation and more established processes - the Chinese operations just don't implement these as labour is currently cheap enough that they don't have to.

So it doesn't seem impossible, though obviously both those companies are decades old and have since established local expertise, the costs of creating a new operation in Ireland / UK could well be cost prohibitive.

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I'm happy as long as models run really well and look the part. IMP, 3D, resin or gingerbread doesn't bother me as long the end result looks and runs great.

Just glad we have IRM and MM for quality RTR and other kit producers and small scale RTR producers such as PW, SF, IFM, JM design, Chris Dyre and MIR, etc. We have never had it so good, an abundance of top quality authentic Irish models. A far cry from the 1970s when brush re-painting Hornby or Lima or worse Brass+white metal were the only option available. Happy days and long may it continue. A truly epic milestone is about to be achieved this very May when the A class locos arrive. Then we will have a full house of Irish diesel locos covering from 1950 to the present day, not to mention the abundance of wagons and coaching stock covering from 1972 to the present day. An expanding Irish market has been forged and grown by recent events. It all started with Murphy Models and now crowned by IRM/AS. 

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42 minutes ago, ShaneC said:

So it doesn't seem impossible, though obviously both those companies are decades old and have since established local expertise, the costs of creating a new operation in Ireland / UK could well be cost prohibitive.

And the US has a population of 330 million people versus Ireland's 5 million.

I'll be the first to confess that I've never seen a Micro-Trains model in person, nor a side-by-side comparison photo with IRM's stuff, but looking at images online, they remind me of Lima stuff for some reason.

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14 minutes ago, ShaneC said:

You mentioned Marklin but there is others - perhaps none that are too popular in the European market.

Micro-Trains (one of the largest N scale producers globally) has their production fully in the US, a quick search of their jobs listings shows they pay $11-12/hour an hour for semi-skilled painting/assembly workers, that's about equivalent to our minimum wage right now and $14-18/hour for skilled workers. They undercut most of the China-produced models with similar levels of detail on price by 20-30%..

There's also Kato who manufacture in Japan - not a country known for cheap labour.

If you search up for videos of the Marklin factory on YouTube and then compare with the factory tour videos of say Rapido - who have moved production within China multiple times in search of cheaper labour, there's clearly great time savings that can be achieved with automation and more established processes - the Chinese operations just don't implement these as labour is currently cheap enough that they don't have to.

So it doesn't seem impossible, though obviously both those companies are decades old and have since established local expertise, the costs of creating a new operation in Ireland / UK could well be cost prohibitive.

Thanks Shane. It's interesting information. I guess Western European wages are just generally too high for this business. I forgot to mention Mehano, which also produces in Europe, but again, it's Eastern Europe, in Slovenia, and I would rate their quality lower than say Murphy Models or IRM, most of their products being more what I would classify as toys.

For companies like IRM/MM they are reliant on contract manufacturers. They don't own their own factories (yet). As far as I'm aware, there are no contract manufacturers even offering this kind of service in Western Europe (or anywhere outside China?) That may happen someday, when some Hungarian Märklin engineers decide they can leave and start their own company offering contract work but it's never going to happen in Ireland IMO.

I think in N scale you can just about get away with leaning a bit more on your injection moulding process to depict grab rails etc, whereas the market in H0/00 scale Europe at least has moved on a bit and customers now expect fine metal detailing in such places.

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44 minutes ago, ShaneC said:

You mentioned Marklin but there is others - perhaps none that are too popular in the European market.

Micro-Trains (one of the largest N scale producers globally) has their production fully in the US, a quick search of their jobs listings shows they pay $11-12/hour an hour for semi-skilled painting/assembly workers, that's about equivalent to our minimum wage right now and $14-18/hour for skilled workers. They undercut most of the China-produced models with similar levels of detail on price by 20-30%..

There's also Kato who manufacture in Japan - not a country known for cheap labour.

If you search up for videos of the Marklin factory on YouTube and then compare with the factory tour videos of say Rapido - who have moved production within China multiple times in search of cheaper labour, there's clearly great time savings that can be achieved with automation and more established processes - the Chinese operations just don't implement these as labour is currently cheap enough that they don't have to.

So it doesn't seem impossible, though obviously both those companies are decades old and have since established local expertise, the costs of creating a new operation in Ireland / UK could well be cost prohibitive.

Micro trains are not one of the largest N scale producers globally. They make 2 locomotives themselves for the US market and even then they buy the parts such as mechanisms in from China. These had their issues too. While the FT has been cheap it has not been a good seller, debuting at the same time Intermountain dropped the same locomotive onto the market, so likely there was heavy discounting to shift product. Their SW1500 retails at the $175 dollar mark, more expensive than larger Atlas locomotives made in..... China. Bottom review is 6 years old, so MSRP has now gone up and I used the Micro trains website for price reference. https://www.micro-trains.com/index.php?route=product/category&path=63_72

Their N gauge models are well regarded but they contain few separate parts (like a lot of N gauge wagon models) so assembly is not to the level of larger models are (around 80 parts in one of our cement bubbles) The loco above features reduced details like no cab interior, few separate parts and no lighting at one end. I have seen them described as 1980s Atlas or Kato level, and I think that's a good description personally. Fair play to them keeping production in America though.

I have plenty of Kato HO locomotives. Absolutely excellent runners, but they keep production prices down by basically sending you a locomotive kit. All the handrails, number boards and grab irons have to be installed by the end user. This keeps their assembly costs to a minimum. As @BosKonayconfirms above the labour to deliver these models finished would be massive. They have also lost the US HO market share they once enjoyed to the likes of Scale Trains, Athearn etc as they are delivering locomotives that run very nearly as well but with a lot more detail and fully finished, ready to plonk on the track. Also made in China.

The China process for creating injection moulded pieces is as good if not better than any company anywhere in the world. It is important to remember that assembly has to be done by hand, which is labour intensive. You cannot use a robot to assemble a cement bubble of 80 parts. This is where the intense labour and expense comes into it, which is why your HO Kato locomotive shows up ready to assemble yourself and your Mircotrains N gauge model does not have the level of detail of Atlas and Athearn Genesis despite capturing the character of the prototypes well. 

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12 minutes ago, Warbonnet said:

Micro trains are not one of the largest N scale producers globally.

Source? Going off of publicly available figures they appear to be either 4th or 5th by revenue with $13.6M gross in 2019. They do make more coach and wagon stock than locomotives.

Here's an in-depth video of their US-based production:

 

32 minutes ago, murphaph said:

I think in N scale you can just about get away with leaning a bit more on your injection moulding process to depict grab rails etc, whereas the market in H0/00 scale Europe at least has moved on a bit and customers now expect fine metal detailing in such places.

Good point, I'd expect HO/OO models have significantly more parts.

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1 minute ago, ShaneC said:

Source? Going off of publicly available figures they appear to be either 4th or 5th by revenue with $13.6M gross in 2019. They do make more coach and wagon stock than locomotives.

Here's an in-depth video of their US-based production:

 

Source - They make 2 N gauge locomotives. Perhaps their largish Z scale range also contributes to such a sales figure annually? 

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If assembly costs are a large part of the cost , I would be happy to assemble pre finished kits as per the KATO models example.

I have a couple of MM locos and they came with small packets of parts to be fitted by the purchaser .

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1 minute ago, brianmcs said:

If assembly costs are a large part of the cost , I would be happy to assemble pre finished kits as per the KATO models example.

I have a couple of MM locos and they came with small packets of parts to be fitted by the purchaser .

You might be, but 20-30 other customers for each one of you would not be. 

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44 minutes ago, murphaph said:

They don't own their own factories (yet).

If it helps, -no one- does. The only slight claim would be Bachmann, who's owned by Kader industries, who own factories in China (they are Chinese). Every single other manufacturer using China contracts factories. 

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1 minute ago, brianmcs said:

I'm sure you are right , but it might be interesting to know what the cost difference would be.

Vitrains did a similar thing with their Class 47, which was a nice model but came in a large kit of parts as it was produced in Italy. It ended up heavily discounted as everyone bought the Bachmann fully finished alternative and now it is no longer offered. The Irish market is so small that offering alternatives like this would not work. Also, the labour in China is lower as previously stated, so it would not reduce the cost of our models that much in the grand scheme of things. It would only have a larger impact if we manufactured locally. 

Honestly, China is the only game in town still if you want high detail, high quality at a reasonable price. 

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8 minutes ago, BosKonay said:

If it helps, -no one- does. The only slight claim would be Bachmann, who's owned by Kader industries, who own factories in China (they are Chinese). Every single other manufacturer using China contracts factories. 

I hope my comment wasn't received as a slight. Sometimes it's hard to make oneself clearly understood on t'internet. If anything I was hinting at what I perceive to be IRM's ability to go much further and conquer new markets. 

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14 minutes ago, Warbonnet said:

Vitrains did a similar thing with their Class 47, which was a nice model but came in a large kit of parts as it was produced in Italy. It ended up heavily discounted as everyone bought the Bachmann fully finished alternative and now it is no longer offered. The Irish market is so small that offering alternatives like this would not work. Also, the labour in China is lower as previously stated, so it would not reduce the cost of our models that much in the grand scheme of things. It would only have a larger impact if we manufactured locally. 

Honestly, China is the only game in town still if you want high detail, high quality at a reasonable price. 

the market is so small here that it clearly would not be viable to manufacture locally . With the exception of ECM trains .

The RTR market is peculiar to railway modelling. I have a small quantity of ROCO minitanks. When they were supplied (almost )fully assembled by Herpa , the more expensive ones would cost about 45 euros. Now I can buy a kit of parts for the same model from a shop in Germany (Arsenalm) for 20 euros.  

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On 8/3/2021 at 9:48 PM, jhb171achill said:

I noticed a while back that Shapeways offers several Irish models. Has anyone any experience of them, in particular coaches?

Gut feeling suggests to me that they're pretty crude, but maybe someone here has first hand knowledge?

Give me a week or 2 and im planning to order a 201. 141 and C class in n guage, fingers crossed they arent too crude. just been put off by the postage price so far.

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2 hours ago, Sean said:

Give me a week or 2 and im planning to order a 201. 141 and C class in n guage, fingers crossed they arent too crude. just been put off by the postage price so far.

Before ordering it might be worthwhile to contact the designer (Valve Design https://www.shapeways.com/product/GNXBTYWKN/cie-class-141-181-locomotive-n-scale?optionId=392047&li=marketplace and ask if he can include an option to print the model in a Shapeways SLA material https://www.shapeways.com/materials/sla-accura-xtreme/.

A SLA print should give you a better standard of finish and avoid the layered effect of the "smooth fine detail plastic"

Valve Design posted photos of a finished 141 & bogie cement wagon on one of the Irish railway modelling news groups about 8-9 years ago, the finished models did not look crude and certainly passed the 2' test.

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25 minutes ago, Mayner said:

Before ordering it might be worthwhile to contact the designer (Valve Design https://www.shapeways.com/product/GNXBTYWKN/cie-class-141-181-locomotive-n-scale?optionId=392047&li=marketplace and ask if he can include an option to print the model in a Shapeways SLA material https://www.shapeways.com/materials/sla-accura-xtreme/.

A SLA print should give you a better standard of finish and avoid the layered effect of the "smooth fine detail plastic"

Valve Design posted photos of a finished 141 & bogie cement wagon on one of the Irish railway modelling news groups about 8-9 years ago, the finished models did not look crude and certainly passed the 2' test.

Geez shapeways sure aren't cheap! €27 + €15 shipping for a €1 part - I think the designer gets a portion of that 27 but still.

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52 minutes ago, ShaneC said:

Geez shapeways sure aren't cheap! €27 + €15 shipping for a €1 part - I think the designer gets a portion of that 27 but still.

Indeed!

I think, though, they're a bit of a specialist market. Some people are happy enough to file away at their kits and as some on here have showed, extremely satisfactory results can come from them.

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12 hours ago, ShaneC said:

Geez shapeways sure aren't cheap! €27 + €15 shipping for a €1 part - I think the designer gets a portion of that 27 but still.

The majority of 3D Printing bureau like Shapeways and smaller locally owned 3D printing businesses will have either a minimum charge or set up charge for part.

Shapeways was attractive to designers because they get a royalty based on the sales price of each part printed, though I don't think the designer of a €1 will get rich on the proceeds.

I had a quick look at the costings for the 3D printed brake van.

One of the options considered was resin casting for the main body and chassis components and metal castings for potentially fragile parts such as steps and buffers.

Our original August test build had approx. 30 3D printed parts at a cost €140 for 3D printing alone.

We reduced the number of 3D printed parts in the production version of the van to 8, but we had to move production to China as it would have been un-economic to manufacture the production version by 3D printing or resin casting locally.

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2 hours ago, Mayner said:

Our original August test build had approx. 30 3D printed parts at a cost €140 for 3D printing alone.

We reduced the number of 3D printed parts in the production version of the van to 8, but we had to move production to China as it would have been un-economic to manufacture the production version by 3D printing or resin casting locally.

30 models worth of prints or 30 parts for a single model?

Sounds absolutely crazy pricing if the latter. A OO scale model shouldn't be more than 100g of resin total, regardless of part count. That's ~€2-3 with 20-25% for waste / supports. Add another ~€1 max. to that for other costs (screen/laser & machine depreciation, consumables like FEP film etc.)

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13 minutes ago, ShaneC said:

Sounds absolutely crazy pricing if the latter. A OO scale model shouldn't be more than 100g of resin total, regardless of part count. That's ~€2-3 with 20-25% for waste / supports. Add another ~€1 max. to that for other costs (screen/laser & machine depreciation, consumables like FEP film etc.)

While the resin itself may be cheap, particularly at a production level there is still set-up time, consumables, wages, power, insurance, and machinery to buy. We know that 3D printing does not scale like injection moulding - if one 3D print takes 10 hours, 2 of them are generally going to take 20 hours (assuming you can't cram more onto the build plate). 3D printing isn't a magic bullet, particularly when discussing many small detail parts that it takes to make a model.

If my machine is working all day, it's preventing me from printing something else - just in the same way that an injection moulding facility also has a limit on what it can produce. If you're working at a production level, you need to cover all costs and make it worth while, otherwise it is a loss making endeavour.

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Posted (edited)
15 minutes ago, RobertRoche said:

While the resin itself may be cheap, particularly at a production level there is still set-up time, consumables, wages, power, insurance, and machinery to buy. We know that 3D printing does not scale like injection moulding - if one 3D print takes 10 hours, 2 of them are generally going to take 20 hours (assuming you can't cram more onto the build plate). 3D printing isn't a magic bullet, particularly when discussing many small detail parts that it takes to make a model.

True although unlike FDM printers, MSLA printers take the same time to print no matter how many models are on the plate. A higher-end MSLA desktop printer (€2500-3000) could print 20-50 OO scale models worth of parts a day and again, consumables / electricity are minimal on a per-model basis. €1 max, being generous.

I don't disagree print houses need to make a profit but €140 for €5 worth of parts is madness.

Edited by ShaneC
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Surely if they're margins were so big, somebody else would just buy a machine and start offering the same service at less margin. I mean there is no monopoly on these machines and we can safely rule out a global cartel, so I guess the true costs aren't that far from what is being charged. It's all the costs any business has, especially fixed costs like rent, wages, insurance etc. The times the machine is idle have to be paid for too. All that adds to the unit cost, and then the business has to make a profit or there's no point in going to all the bother and risk of setting up shop.

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With all due respect, @ShaneC, and I apologise in advance if this is poorly worded or comes across too strongly, but it almost appears that you are here looking for an argument, rather than looking to learn or share.

Some members here (not including myself) are offering you invaluable insights into industry, how things work, what the cost structures are, and instead of taking on board what they say, you dismiss it straight away. We're talking about several lifetimes of combined experience, from many different perspectives.

These insights are something that many of us, maybe even most of us, will never have been privileged enough to see before, and should not be taken with a pinch of salt.

You seem to be missing the whole point of a business: profit.

Comparing what you can print in your bedroom to what a company can do is just nonsensical. It's apples vs. oranges, Canary Islands v. Ireland, there's just no comparison.

Profit is generally speaking the incentive for creating a business. You view profit as a cost when planning, along with things like research and development, plant and equipment, wages, materials, taxes, travel and transport, shrinkage, many others, and decide on what is viable. If one were to set up a business and not make any profit, wouldn't one be better off packing shelves in a supermarket?

There are always exceptions. I don't know the IRM lads personally, but get the impression that their margins are very small, and in cases such as the Ballast Plough Vans, were probably negative - that was like a favour to the community. Again, I can't speak for them, but when you look at pricing in general, economies of scale, how small the Irish market is now, and how much smaller it was three years ago, you can't help but draw such a conclusion.

Likewise for Shapeways. The incentive for providing a marketplace is going to profit. The incentive for sellers using that marketplace is profit. To say that 100g of plastic is worth a Euro is ignoring everything else that has gone into designing and creating the product that costs more than a Euro.

With time and experience, manufactures, designers, vendors etc will know what the correct balance is likely to be for a product launch, quantity produced vs. sales/time curve. Nobody wants to spend money on something only to see it not sell, and at the same time they want to sell enough to make the launch worthwhile. I'm sure that @Warbonnet said something to this effect regarding the next run of Irish buses, as 80% of the most recent launch sold out in about three days.

I'd suggest that you take on board what you are hearing from these members, and try to use it constructively to learn a little more about how things work in the real world.

It would also be great if you were to start selling some of your own SLA products here on the forum - with time, you would have real-world case studies that demonstrate how things compare, rather than just speculation.

Going by the footbridge put forth by @RobertRoche, there is definitely interest and support for 3D-Printed projects such as this.

Again, I mean no offence, but please start reading what members here post, and try to assimilate the information rather than ignoring it.

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15 minutes ago, DJ Dangerous said:

With all due respect, @ShaneC, and I apologise in advance if this is poorly worded or comes across too strongly, but it almost appears that you are here looking for an argument, rather than looking to learn or share.

Some members here (not including myself) are offering you invaluable insights into industry, how things work, what the cost structures are, and instead of taking on board what they say, you dismiss it straight away. We're talking about several lifetimes of combined experience, from many different perspectives.

These insights are something that many of us, maybe even most of us, will never have been privileged enough to see before, and should not be taken with a pinch of salt.

You seem to be missing the whole point of a business: profit.

Comparing what you can print in your bedroom to what a company can do is just nonsensical. It's apples vs. oranges, Canary Islands v. Ireland, there's just no comparison.

Profit is generally speaking the incentive for creating a business. You view profit as a cost when planning, along with things like research and development, plant and equipment, wages, materials, taxes, travel and transport, shrinkage, many others, and decide on what is viable. If one were to set up a business and not make any profit, wouldn't one be better off packing shelves in a supermarket?

There are always exceptions. I don't know the IRM lads personally, but get the impression that their margins are very small, and in cases such as the Ballast Plough Vans, were probably negative - that was like a favour to the community. Again, I can't speak for them, but when you look at pricing in general, economies of scale, how small the Irish market is now, and how much smaller it was three years ago, you can't help but draw such a conclusion.

As I've said a few times, thanks for all the info that's been provided.

That being said I do own a business (not in modelling and B2C not B2B) that uses MSLA 3D-printers as a core component and I've previously sub-contracted out work to other commericial printers on numerous occasions - I'm saying with that knowledge that some prices quoted here are way out of whack with industry norms. 3000% markups just aren't normal. You're talking about R&D costs and the like but what was being discussed was a printer just be sent the model files and printing them off, they aren't doing the research or design.

20 minutes ago, DJ Dangerous said:

It would also be great if you were to start selling some of your own SLA products here on the forum - with time, you would have real-world case studies that demonstrate how things compare, rather than just speculation.

Going by the footbridge put forth by @RobertRoche, there is definitely interest and support for 3D-Printed projects such as this.

I will consider doing that butI don't have the setup for painting accessories and it seems the interest in the Irish market for kits is somewhat limited.

Thank you for the callout though, I will keep your words in mind, it was certainly not my intention to cause an argument or any offense.

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On 12/3/2021 at 12:30 AM, WRENNEIRE said:

Another problem I encountered with Shapeways was that postage was included for each item,
I ordered 12 individual pieces and the postage worked out at over €50!

oof thats no good for a cheapskate like me!

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