Xometry's "take" grows to 39% last quarter

[Milland]

.naturally the demand is gone,hospital suppliers are again purchasing Chinese masks to maximize profit.........and the brave /foolish enterprize will die...........In this country its far easier to dig a bucket full of coal or iron ore,and simply buy stuff from China.

Oh, I'm sure things will get better once China claims that Australia was originally a CN province, AND it needs to invade to protect extant Chinese citizens in OZ.

Under Xi, it's inevitable.

 

[BarnFab]

F- that. I'm not about to fight a price battle with a company that is losing money.

So sick of customers that only care about cost. Shame on anybody who is encouraging the bastards.

The Xometry front end retail prices on USA manufactured are not hard to do by any means, run some quotes for yourself and see what i mean. The price they offer to the machine shops to make them .. yeah not a fat number.

 

[Marvel]

F- that. I'm not about to fight a price battle with a company that is losing money.

So sick of customers that only care about cost. Shame on anybody who is encouraging the bastards.

Our industry is, was and will always be a race to the bottom for machine shops quoting. Shops overhead changes drastically from one shop to the next, no matter the size. I've worked for large 50-100 employee and small 2-10 employee companies, on both ends shops that finance everything and have ridiculous overhead costs and shops that own and pay cash for everything and run on 0 debt, having very minimal overhead.

In 2008 I worked for a shop that the owner quit taking pay and dropped his shop rate to undercut everyone else just enough to pay the bills and employees without ever needing to let anyone go.

It also seems that's a lot of larger customers in recent years don't care who machines their parts, as long as they get them at a reasonable cost and on time, and of course done correctly. They'll opt for the smaller shop that hits dead lines rather than the large shop with the state of the art facility and machines.

Not to mention the boom of the incredibly small shops, home shops, single man shops - Like myself, I have practically 0 overhead. If it came down to it I can quote at a shop rate of $50/hr no problem, maybe even less, do I want to, absolutely not, but if I had to, I could, and I made sure to put myself in a position that if ever need I can. I have around $1500 maybe $2000/month in bills between business and personal. I can undercut a lot of shops no problem and still be ok.

 

[jccaclimber]

If the Xometry take is 39%, does that mean matching their quote is the same as charging 64% more than the desperate place taking the job? Does that bring it to reasonable as alluded below, or are the places doing the work really that low?

 

[BarnFab]

F- that. I'm not about to fight a price battle with a company that is losing money.

So sick of customers that only care about cost. Shame on anybody who is encouraging the bastards.

Not at all, the front end USA made prices are not stupidly low, in fact a lot of them are above what I would usually quote. The Chine ones are a bit harder to beat but thats not what was being offered.

 

[RC Mech]

We tried to apply to be an Xometry partner the other day, mostly because of this thread and curiosity.

The turning point on their application was when they asked for uploads of part files for any of the stamping dies we have.

It’s as though someone who has no experience in manufacturing compiled the questions on the application. Few laughs too- wanted to know if we had “braising” capability. Sure, I have a bbq.

 

[Doug]

Serious question - how are you folks finding new customers that don't force you to compete against Xometry and the like?

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It's increasingly rare to find a customer that is looking to build equitable supplier relationships.

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Retired now...... I'm in an area where there are quite a number of high tech startups. That was a big plus. Those are the customers I wanted to work with. I found most were looking to form relationships with dependable shops. Some of the projects lasted over a number of years so it was in their interest to deal with shops who had a long term understanding of the projects and could offer design suggestions along the way. It wasn't unusual to work from pencil sketch.

We worked on a project for Microsoft that was on the back of napkin, that's kind of how informal the relationships could be. That was a crude, working prototype for the Microsoft game controller.

You're in Portland, I thought there was quite a bit high tech development there?

 

[boosted]

Retired now...... I'm in an area where there are quite a number of high tech startups. That was a big plus. Those are the customers I wanted to work with. I found most were looking to form relationships with dependable shops. Some of the projects lasted over a number of years so it was in their interest to deal with shops who had a long term understanding of the projects and could offer design suggestions along the way. It wasn't unusual to work from pencil sketch.

We worked on a project for Microsoft that was on the back of napkin, that's kind of how informal the relationships could be. That was a crude, working prototype for the Microsoft game controller.

You're in Portland, I thought there was quite a bit high tech development there?

I think that the market has changed a LOT in the last decade. Those of us who don't have a client list already built out have a much different journey than our predecessors.

The vast majority of tech companies primarily use Xometry/Protolabs/Fictiv for their prototypes. It's fast and easy. Engineers can pay with a credit card instead of a PO. Often they have no interest in building out a supply chain, since the production will go to SE Asia anyways. The Portland market for innovators is pretty weak, but we are relatively close to Seattle and San Francisco. My shop does a lot of work for tech companies in both of those regions, but very little of it is direct to the customer.

I do have a feeling that the proliferation of these online matchmakers is going to force us to target production oriented projects a bit more. We are really good at doing complex prototypes, but it is hard to get customers to consider any traditional shop as a better option than the online market. There's a certain giant tech company with a major campus less than 2 miles from my shop. Once we made some pretty cool prototypes for them through Xometry. When I reached out to them directly, there was zero interest in onboarding us as a supplier.

 

[jccaclimber]

<snip>
Engineers can pay with a credit card instead of a PO.
<snip>

That’s one you can easily fix.

 

[DDoug]

The young engineers at one company use me and Xometry (and another company I can't remember the name of). Couple of times I've run the STP file thru the Xometry quote process to see if I should even waste the time quoting.

I've had newbie engineers complain about the prices of new machinery, and in a meeting with several senior managers, pull out prices from HGR, and tell us point blank that we are wrong....

 

[michiganbuck]

Wow. the XMTR @ $34.00 numbers look good
revenues per year 350m, 218, 141, 80
Qt revs: 104m, 96,84,67
RPS $7.52
(X) eps - $1.97
(X) debt $299M
Guess if I was with the company I would rebuild Warner Swaseys lathes and Madison surface grinders with ball screws and CNC.
Might see if Cash would come aboard for a year to set up the rebuild machinery portion of the company.
ALRO is getting bigger in machining but is a private company.

 

[boosted]

That’s one you can easily fix.

We take credit cards. Not quite that easy.

When I was an engineer at a big aerospace company about a decade age, we thought Protolabs was AMAZING, because you could just pay through the website with your corporate card. The rules were different for buying from a regular machine shop; that had to go through purchasing. We would get abysmal quality out of Protolabs, but it was fast and easy, so it became the preferred choice for many engineers. The tooling shop in the next building over would literally have machines and machinists idle, while we were receiving deliveries of parts from Protolabs.

 

[RC Mech]

We take credit cards. Not quite that easy.

When I was an engineer at a big aerospace company about a decade age, we thought Protolabs was AMAZING, because you could just pay through the website with your corporate card. The rules were different for buying from a regular machine shop; that had to go through purchasing. We would get abysmal quality out of Protolabs, but it was fast and easy, so it became the preferred choice for many engineers. The tooling shop in the next building over would literally have machines and machinists idle, while we were receiving deliveries of parts from Protolabs.

This is fantastic. I think the question we should be asking (I know I am) is how can we capitalise on stupidity?

 

[jccaclimber]

We take credit cards. Not quite that easy.

When I was an engineer at a big aerospace company about a decade age, we thought Protolabs was AMAZING, because you could just pay through the website with your corporate card. The rules were different for buying from a regular machine shop; that had to go through purchasing. We would get abysmal quality out of Protolabs, but it was fast and easy, so it became the preferred choice for many engineers. The tooling shop in the next building over would literally have machines and machinists idle, while we were receiving deliveries of parts from Protolabs.

My go to local shop doesn’t have the quoting software of Protolabs, so I don’t quote with them unless I think I’m going to have them build it. That said, I send them a drawing, they send me a quote a few hours later, I pay with a credit card from my computer via a link in their quote email. Not really any different than Protolabs. Their purchasing group probably doesn’t have some rule that you can only use credit cards on companies from Minnesota who have names starting with the letter P. There’s always the possibility of general stupidity at the customer, but it’s usually not hard for the engineers to get around when they want to.

 

[boosted]

My go to local shop doesn’t have the quoting software of Protolabs, so I don’t quote with them unless I think I’m going to have them build it. That said, I send them a drawing, they send me a quote a few hours later, I pay with a credit card from my computer via a link in their quote email. Not really any different than Protolabs. Their purchasing group probably doesn’t have some rule that you can only use credit cards on companies from Minnesota who have names starting with the letter P. There’s always the possibility of general stupidity at the customer, but it’s usually not hard for the engineers to get around when they want to.

Your point is totally valid. Actually, I really like the idea of including a credit card payment link with the quote.

However, at the Fortune 50 company I worked for, we weren't even allowed to reach out directly to shops and ask for quotes. That was the job of procurement/purchasing. At that time being able to quote a part directly from a web portal, then purchase like a standard inventory item was very novel, and unlocked a world of possibilities for the few engineers who actually had a "P-Card". I am sure Protolabs made a ton of money from us just for being the first to market. I am also sure that place is not the only giant company with a wonky purchasing system that heavily pushes engineers towards purchasing through a handful of established channels.

 

[TKassoc]

Restricted purchasing is usually a horrible interaction of the Quality and Accounting Departments. Quality doesn't want any more suppliers because then they're responsible for a supplier evaluation or full blown audit each year and accounting wants any money set aside ahead of time in a blanket PO for each supplier to satisfy the accounting rules. It usually takes a senior engineering manager or VP pushing hard to overcome the internal inertia...I will say it's kinda nice on the other side of the moat once you get there.

 

[jccaclimber]

Smart organizations don’t do quality audits on non production prototype suppliers.

 

[TKassoc]

In my experience most companies ISO13585 quality systems default to audit everything in sight and then relax the pressure later. Some of it is just the follow procedure nature of the people who inhabit the middle and lower tiers of those departments. More than once I've gotten it from the head of a quality department that's been burned by R&D developing a novel new product that is now sole sourced from a non-qualified supplier because of some specialized process or skill. It's not smart or efficient but it happens all the time and unwinding the mess takes a bunch of resources.