CNC and Laser Cutters - Ready for the Dell business model?

[Eric Hunting]

With the progressing implosion of the US college textbook industry thanks to the machinations of publishers and a subsequent recent invasion of mass-produced counterfeit books the likes of which has never before been seen in the history of publishing, I've been compelled to look for a new vocation. Recently, I've been looking into acquiring a desktop laser cutter as a prototyping tool which might pay for itself in the production of some simple novelties. (I think there's a small market for Krampus-themed Xmas decorations and similar things...) But in researching the various products on the market I discovered a peculiar situation that seems to offer a promising small business opportunity--if I can figure out how to overcome some logistics problems. 

As most people here probably well know, until recently the cost of even a small laser cutter in the US started at around $20,000. This is because, much as was the case with earlier 3D printers, the domestically made machines have always been based on entirely proprietary designs, targeted to a high-end B2B market with the usual 'executive premium' added, and sold through the old fashioned dealer/rep process where no prices are concrete and everything gets finagled and negotiated until the customer is more-or-less beaten into submission. But with the rise of the Fab Lab and Maker movement, awareness of this technology has greatly expanded, creating a demand for hobbyist laser cutters that the established industry simply couldn't meet and wasn't even inclined to acknowledge the existence of. And so, in stepped the Chinese and a host of incredibly cheap laser cutters began to appear on Amazon and eBay. Unfortunately, most of the first generations of these were just plain junk and the hassles of personally importing bulky machine tools was just too much for the average person to deal with. The Chinese continue to do poorly at product design, coding, marketing, and customer support. The domestic companies saw no threat here as none of their traditional customers would ever buy these clunkers no matter how cheap and they seemed more than willing to cede any marginal hobbyist market there might be to them. 

But the Chinese learn fast and more recent generations of these machines are remarkably improved. They still have issues, but the basic hardware is getting competitive in performance, if not quality. But the damage of their first impression has been tough to overcome. For all their international presence, Chinese companies--much like American companies--remain rather provincial in mind-set. And the machines are rather too bulky and heavy for a 'drop shipping' approach to distribution. The performance of digital machine tools and optical systems relies on simple structural rigidity. The Chinese accomplish this the old-fashioned way; with big hunks of metal. Their designs seem to repurpose steel enclosures of old-fashioned design originally used for other kinds of machine tools. 

Despite the remaining bugs, the Chinese have accomplished one very remarkable thing that I think may soon prove extremely disruptive to the laser tool industry. As I researched the various machines on the market, I began to notice that these Chinese machines featured many of the exact same sub-components. There may be many different laser cutter makers in China, but most of their core parts seem to come from the same handful of sources--sources that are competitively making these parts as commodity components to common standards, making them intercompatible and interchangeable. In some cases, the machines are marketed with the brand name of specific controller units included or offered as options. They've apparently already reached some kind of independent brand recognition. They have done to the laser cutter what the IBM PC--or perhaps more accurately its first 'clones'--did to personal computers. And this means that a laser cutter is not all that high-tech or sophisticated anymore. It's now reduced to just this handful of standardized modular components needing no special tools, facilities, or skills to assemble. If you can assemble a PC, you can now assemble a laser cutter that can approach the performance of a brand name machine costing many tens of thousands of dollars. That's amazing.

We've had some inkling of this with the few open source laser cutter projects. But, for some reason, these projects seem to have been pursued with very limited knowledge of the range of parts now available off-the-shelf. When something has reached the level of an interchangeable commodity with many sources, it's verging on open source. 

Opening the market for these improved Chinese machines, a number of independent distributors have appeared in the US to help overcome the import hassles. In some cases they repaint and rebrand the machines as their own. Additionally, some companies are now assembling their own branded machines to order from the Chinese parts. Notable for its Kickstarter beginnings, Full Spectrum Laser does this. Those big steel enclosures account for most of the shipping cost and import hassle for these machines. As a whole unit, a modest size laser cutter has a $1000 and one month import overhead. But they are one of the lower value components. If you can source enclosures locally, perhaps by making them yourself, you've eliminated most of the cost and hassle of import. As parts, the core hardware can go by EMS and get to you cheap and fast. Even if making a chassis and enclosure out of something like T-slot is much more expensive, the savings on the shipping may well make up for it. 

But these new local distributors are still selling these rebranded machines at three times their factory-direct cost. When the price difference compared to the domestic made machines is so extreme and the process of buying direct so harrowing and time-consuming, this still looks like a good deal. So I wouldn't call this bad value. But it seems to me there's a broad area for competition with a different business model. Maybe a business model where you build machines entirely al a carte from a broad selection of parts just like a custom PC clone. You get the full sliding scale of economy from the absolute no-frills to one maxed out with all the options. Maybe a business model that exploits the full cross-over spectrum of these commodity parts for a range of products from laser cutters, to CNC machines, to 3D printers. No brand except at the subcomponent level, but a better value than any brand because there's more than one competitive source of these non-proprietary service parts, no limit on potential upgrades as the part individually improve, and you can do so much yourself. 

The one big problem with such a business for me, however, is a lack of workspace. Even getting a cutter for my own use is complicated by the fact that I can't fit anything bigger than 80cm through the front door of my little adobe cottage and may have room for no more than one. My health wouldn't tolerate a daily commute to workshops in the nearby cities. 

So I'm struggling to figure out how I might pursue such a business idea by myself. Perhaps some folks here may have some suggestions.  Also, software remains a persistent issue with these machines despite its relative simplicity because, even though they make very nice modular controllers now, the Chinese just don't seem to be able to code properly or port to Mac or Linux. The lack of Mac support with even the domestic machines has always puzzled me, given the ubiquity of the Mac in the design studios so often using them.