MakerBot’s shift of production to China could signal the beginning of the end

MakerBot-LogoBefore the dozens if not more players existed in the 3D printing space, there was MakerBot. If nothing else, MakerBot can certainly lay claim to have captured the consumer mindset and created a big market for 3D printers. As MakerBot announces its plans to shutter its Brooklyn manufacturing facility, we fear that there might be larger ramifications here. 

With their open source approach, MakerBot made a mark for itself amongst regular consumers and the education markets both. It was the cusp of a new world where everyone could design, prototype and launch their own hardware and spearheading it was MakerBot with its 3D printers.

Fast forward a few quarters and the company got acquired by Stratasys. Post acquisition, sales have consistently dropped. The company that sold over 40,000 units a year just a while back now struggles to sell less than half of that. There are many factors to be blamed for that, disillusionment amongst the community being one. The open source nature of the hardware had created a very large following for MakerBot so it was clear that they’d be miffed when the company declared that starting the MakerBot Replicator 2, all their products would be closed source.

MakerBot Made in China

Following it came the debacle around the Smart Extruder with the device lasting just a couple of hundred hours before it stopped working . In the light of the class action suit building up against them and falling costs of competing machines, MakerBot is now planning to shutdown its manufacturing facilities in Brooklyn, New York and move all production to China.

We need to be able to manufacture printers on a much higher volume in the coming years, said Jonathan Kaglom, MakerBot’s CEO.

This move comes at a time when MakerBot is increasingly shifting its focus to education and the industry. Consumer 3D Printing might have peaked in terms of interest but the uptake has been slow amongst regular consumers who often fail to see much utility in them. This despite the fact that MakerBot had extensive partnerships with offline retailers and even opened their own retail outlets. The stores have long since shut and as sales drop, the move to China for production seems like a last ditch effort to try and gain back their erstwhile market position.

Keep in mind that its not just the sales that have dropped for MakerBot’s line of products. Stratasys, the parent company, also wrote off over about a billion dollars as goodwill impairment charges for MakerBot. This is more than double the $403 million that they paid for it in the first place. All in all, with high priced, low quality printers, the lack of community support that got it here and valuations in free fall, it really is just a matter of time before we see the demise of MakerBot.