Kevin Kern
Anyone who attended last November’s Konica Minolta dealer meeting or read about it heard rumblings that the company was on the verge of partnering with 3D Systems to market 3D printers through the Konica Minolta Dealer channel.
Those rumblings became a reality on June 5 when the formal announcement that the two companies were entering into a strategic alliance whereby Konica Minolta Business Solutions U.S.A. will distribute its complete 3D printing product portfolio through Konica Minolta’s nationwide network of dealers and authorized resellers, as well as its direct sales channel.
According to the press release, “This relationship marks Konica Minolta as the first original equipment manufacturer to sell, support and service 3D printing products through the traditional printer and office equipment channel in the United States.” Among the first 3D Systems products that Konica Minolta will resell are the ProJet 3500 Series Professional 3D printer for engineering, manufacturing, and mechanical environments and the ProJet 660 Professional 3D Printer, a device targeted at consumer products, healthcare, education, and other vertical market customers looking to print full-color, photo-realistic models for product design, prototypes, assemblies, and color concept models.
Late last month I spoke with Kevin Kern, senior vice president marketing for Konica Minolta about this announcement. Here’s what he had to say.
Why 3D Systems?
Kern: They’ve got a good wide product range. They’ve got first class, manufacturer commercial type products. Quite frankly, we don’t want to sell the low-end consumer [products]. We’re starting off with [devices] in the $40,000-$80,000 range, not the low-end [products]. They’ve got leading edge technology, multiple types of technology, and they lead the industry. Their distribution model and our distribution model align very well. It’s a good fit.
Two products are mentioned in the press release, will your dealers have access to more products than these?
Kern: We can access their entire range.
Are you concerned that everybody out there might be eventually be selling a 3D systems product?
Kern: This is the first relationship of our type in the business so I think they’ll see what we can do for them and be satisfied with that.
How are you preparing your channels to sell 3D Systems products?
Kern: We have service classes going on right now. One of the reasons we chose 3D is because they have an excellent training program. We have our trainers trained, we’re running service technicians through the training on the dealer side and we’re running our specialty product managers through. On the direct side ,our production print analysts are going through [the training]. A lot of our people will be trained on this.
This partnership was heavily alluded to at last November’s dealer meeting. What’s been the reaction to selling 3D printers from your channel?
Kern: Our dealers are all over this. It’s a good fit for our channel because they already sell large format, which is architectural, engineering, and construction type printing. The workflow is not dissimilar. It’s Cad-Cam and a logical fit from a price point, capabilities, and sales requirements in the channel. And we can provide strong national coverage and a dual-channel operation that can provide the 4-hour service response and the 365x7x24 response that production customers need.
Any pushback and if so, what are the biggest concerns right now?
Kern: They can opt into it. Everybody sees the logic. It’s an adjacent line of business. The core technology is similar to inkjet, and we know all about inkjet heads and material science. From that side and from a service side, if a dealer is servicing a wide format device or a wide format inkjet device, a lot of the basics are there right now.
I don’t think we’ve begun to tap all the things we can do with 3D printing. The opportunities are going to get bigger and bigger over time. 3D printers can become the iTunes of physical objects so to speak.
This has the potential to be a disruptive technology inside the dealership as well, doesn’t it?
Kern: 3D printing has been around a long time, but can be very disruptive when it comes to creating copier parts. Here’s the part, here’s the license fee, make the part yourself. It cuts down on inventory. This has real growth opportunities in this business because of all the things you can do with 3D printing.
What kind of margins can dealers expect to make on these products?
Kern: I can’t quote specifically, but I think they’ll find the margins in line with some of the other products they sell. The [hardware] margins are good, the aftermarket margins are good, and the service margins are good.
Like with IT Services this changes the conversation you have with your customers. Now you can talk with your customer about everything from IT Services to 3D printing—a broader array of things. Basically, you’re running it against the same overhead. It’s all incremental contribution margins. The same service techs and it’s the same as supporting production print and wide format. We think it’s a great up sell opportunity and in terms of 3D gives them a lot of presence in terms of people who have really large service organizations.
Speaking of service, how difficult are these devices to service?
Kern: My guess is the technology is probably between the wide format inkjet and the production print copier. Probably closer to the inkjet wide format than the production print copier.
Will these be 3D Systems branded or Konica Minolta?
Kern: They’ll be 3D Systems branded. As an OEM ourselves, we’re very careful about that.
What are your ultimate expectations getting into this space? Big numbers, modest numbers, slow acceptance?
Kern: We’re new to the market and our first stage is learning. I look it as incremental opportunities, but I think we’ll find it will accelerate relatively quickly. This is a great opportunity for the dealer channel. This is something we’re going to incubate and build up a robust channel capability in application knowledge, especially. On the dealer side I think it’s a good long-term business model.
