Letter from the CEO - Changes to Shapeways Pricing - Shapeways Blog
Letter from the CEO – Changes to Shapeways Pricing
October 3, 2018
Shapeways Community:
This is an exciting time at Shapeways. We are committed to providing the community with the leading platform to design, make and sell with the most innovative technologies. This includes the recent announcement of the Fulfilled by Shapeways Shopify integration and the Stratasys J750 multi-material color 3D printing. And we are in the process of re-launching our entire “Design with Shapeways” platform and re-engaging designers in a better experience to support creators to make their ideas real.
In order to focus on this R&D and invest in developing new technologies and services, Shapeways has also been evaluating parts of our business model that are not profitable, sustainable, or competitive and require change. This includes price.
Below is a detailed explanation of what is changing and when. We also provide some context of how we approached it and why. If you have additional questions, please reach out to service@shapeways.com or your managed account team member. We are here to help.
What have we been doing so far?
Earlier this year we initiated testing of a new pricing algorithm on a subset of new accounts. We used this opportunity to test, adjust, change the new model without impacting the entire community. The new pricing algorithm calculates price in an average of 15 seconds vs the historic pricing model which averaged >20 minutes.
What are the variables in the new model?
The variables that are included in the new model are the same parameters that we have used in the past: material volume, machine volume, bounding box measurements, part count… and we are adding an additional variable: manufacturing speed. The new model also implements “minimum” pricing to cover the cost of the labor on small parts and new pricing on finishes to better reflect the cost structure required to process the finish.
How will this impact price?
- Algorithm Change – The intent of the new algorithm is to recreate our existing model, in a more simple way to enable less processing and faster price generation. With this change, there are some differences. We have worked to minimize the variability between the old and new model, resulting in an average price variance of less than +/- 5% change.
- Minimum Pricing– We have added minimum prices per part. Small parts require similar labor, processing, and handling as large parts and we need to adjust price to offset those costs.
- Finish Pricing – We have evaluated the costs associated with finish services and have adjusted our price accordingly to align with the real cost structure.
- Material Pricing – We have increased pricing on Cast Metals, Steels, and Sandstone to align with the cost increases we have received from our vendors. These increases vary per material.
- Manufacturing Speed – Historically we have not differentiated prioritization in our manufacturing process, giving every part the same priority of production. With the new model we are offering varied manufacturing priority… starting with Standard & Economy options… and growing to additional offerings over time. The Standard offering will prioritize parts and ensure delivery within our current standard manufacturing time, while Economy will not be prioritized and will be manufactured when capacity is available allowing for a low cost option for parts that don’t require a specific delivery time frame. Please note: we will still be providing ranges for delivery dates. For the new economy option, the maximum time for production may be longer than you have historically experienced. This is because of the new capacity variable.
- Shipping – We are also making adjustments to our shipping pricing to align with current cost rates with our vendors.
When will this roll out?
We will implement the new pricing October 22, 2018.
How will this affect the marketplace?
All models that are currently in the marketplace will be grandfathered into their existing pricing until 2019.
Thank you as always for your support, especially through this change.
Greg Kress CEO of Shapeways