While others have failed, The ACT Group has found success.
Who said independent dealers can’t sell 3D printers?
It certainly wasn’t Greg Gondek, president of The Act Group in Cromwell, Connecticut, who has been selling them for more than a decade.
There is a reason why The ACT Group is still selling 3D while other dealers have tried and stumbled.
“You can’t dabble in it,” emphasized Gondek.
The ACT Group doesn’t dabble.
Before The ACT Group got its 3D sea legs, it had to learn some hard lessons that might have turned a lesser dealer off 3D printers for good.
First, the dealership doesn’t allow its copier sales reps to sell 3D or its copier technicians to service it. Instead, it has dedicated sales reps and service technicians. This wasn’t how Gondek began his 3D journey.
The hard reality hit home of just how unprepared his dealership was to sell 3D hit home during a meeting with its first 3D printer prospect. The ACT Group even brought along an expert representative from the manufacturer.
“There were 16 engineers in this meeting, and they chewed us up and spit us out,” recalled Gondek. “I realized we can’t do this. I put the stops on everything. We didn’t try to sell another machine for the next five months because we needed to prepare.”
That preparation included creating a separate 3D sales and service infrastructure with a dedicated service manager, technicians, and salespeople. Its technicians were also trained on all aspects of the equipment.
“After we did that, we did very well,” said Gondek. “We ended up selling a couple of metal machines. As a matter of fact, we sold some of the first models released by our manufacturer.”
Today, The ACT Group has eight full-time people in its 3D division, including 3D engineers who understand the technology inside and out. The former vice president of global engineering for 3D Systems now heads up the dealership’s engineering team.
Cashing In
“When you have eight full-time people, all at a high level, you have to generate revenue,” said Gondek. “To do that, you have to put money on the table.”
A few years ago, Gondek wrote an article advising dealers to be prepared to invest a million dollars if they wanted to include 3D printers in their product offerings. Today, he said the price tag is higher than that.
And don’t expect instant gratification either.
“Make sure that you go into it with your eyes open, knowing that you’re not going to sell anything your first 90 days,” revealed Gondek. “You may not sell anything in your first four, five, or six months. Or it could be nine months down the road. It’s a year of hard work developing your stock and your infrastructure so that you are self-sufficient.”
The ACT Group stocks parts and supplies, something most resellers don’t do.
Even though these machines sell for big bucks, the margins aren’t as good as with copiers. According to Gondek, The ACT Group makes single-digit margins on hardware but sees much higher margins on service and supplies.
Still a Good Fit
Single-digit hardware margins be damned. 3D is still an excellent diversification opportunity if you follow Gondek’s advice.
“It matches up in a lot of ways with what we do as copier dealers,” he said. “It’s hardware, service, and supplies.”
But that’s where the similarities end. Let’s examine service. In 2019, The ACT Group made 270 customer service and support calls on 3D equipment. That doesn’t sound like much, but the average service call could be a day or two.
“You’re not doing 4.4 service calls a day,” said Gondek. “If you can finish one and start on another, that’s good.”
The ACT Group’s response time is less than six hours. That’s notable in the 3D space, where some customers wait weeks to get their 3D printer fixed. That’s because most dealers and even manufacturers who sell direct don’t have an efficient service infrastructure in place. The ACT Group’s self-sufficient service infrastructure enables them to act fast and provides them with ready access to most parts.
Gondek learned early on that he couldn’t depend on the 3D equipment manufacturers to service the equipment and recommended taking the time to research potential partners.
“From my perspective, a lot of them are old school manufacturers. Some of them make most of their money selling the equipment to resellers,” he said. We have walked away from companies that insist on loading up your warehouse with machines as one of the requirements of being a reseller. And if we do not feel comfortable with their ability to offer comprehensive technical training and support, then that is a deal-breaker for us. If we are not the experts, then we can’t take care of our customers. ”
For every 3D printer The ACT Group sells, it services it with what Gondek described as a “high level of expertise.”
ACT 3D partners call on them to help service challenging clients and some of their 3D accounts.
The dealership sells and services 3D printers in Connecticut, Massachusetts, Maine, Vermont, New Hampshire, Rhode Island, and New York.
“We’ve even had our manufacturers ask us to get involved in deals in Ohio because there isn’t enough expertise out there,” said Gondek.
Listening to Gondek’s stories, you wonder why he’s in the 3D business. Yet his commitment to 3D knows no bounds. There was the time the dealership sold a customer an $800,000 machine, only to find out the vendor couldn’t send anyone to install it for another five or six months. Gondek’s solution was to send two of his techs to the manufacturer’s facility in France to be certified on the machine so they could properly support it.
“If you want to be successful in 3D, that’s the type of commitment you have to make,” said Gondek. “If you do anything less, hopefully, you won’t try to do it in New England; because if we are in the game, you better be on the top of yours.”
Knowledge Base
According to Gondek, The ACT Group’s sales and service personnel’s 3D expertise is second to none. Not only can they show customers how to configure the device to get the best results, but it’s also not unusual for the dealership’s 3D sales reps and engineers to tell customers that they don’t need a 3D machine, even though the customer is hell-bent on buying.
“The whole thing is customer support, customer service, and engineering support, to help them make parts properly,” said Gondek. “That’s what we do. Our guys can look at a part and say, you’re not making it properly. It’s got to be angled up or down another eight and a half degrees in the build platform for it to run properly.”
His team is also adept at dealing with the 3D decision-maker, not the usual personnel a copier sales rep interacts with.
“You’re not dealing with purchasing guys,” Gondek said. “You’re dealing with heads of engineering or heads of material development and quality control. It’s a whole different category of buyer. They check out everything. There’s a lot of, ‘Okay, make this part for us. Let’s analyze the part. Let’s test the part.’”
A Multi-Vendor Operation
The ACT Group has a loyal clientele. Some customers have four or five different brands of machines. Often, the machines it purchased from The ACT Group get 90% of the use because the customer knows if they call The ACT Group for service, they are there that afternoon.
The ACT Group sources its 3D printers from multiple partners, giving it greater flexibility in the offerings and types of materials printed on those printers. Over the years, Gondek has experimented with different manufacturers and dropped a few brands because he was unhappy with the manufacturer for one reason or other.
“I’ve taken my lumps,” acknowledged Gondek, “because some manufacturers are just like Hollywood, everything is held up by two by fours. There’s no backs to the building. And they’re all spouting, ‘Oh, we’re the latest, greatest,’ and it’s not true. The customers want to make what they want to make with the right materials. And they want the product to come out of the machine so it’s acceptable. In order to be successful, that machine has to be able to run and keep running.”
That said, he continues to build on existing relationships.
“We partnered with Henkel a few years ago and are now one of their first distributors of specialized materials for 3D,” said Gondek. “They also have utilized our expertise to beta test and evaluate new equipment and are excited to be able to discuss material development possibilities for clients with special projects or needs.”
During the pandemic, The ACT Group printed approximately 40,000 face mask holders for area hospitals and worked closely with several universities on research and development projects.
No Regrets
Despite the challenges of selling 3D printers, Gondek has no regrets about getting into the business. After stumbling out of the gate, he quickly figured it out, and you’ll be hard-pressed to find an independent dealer that does 3D better than The ACT Group.
“Timing is everything,” reflected Gondek. “I got into it five years too early, but the plus of me doing that is there’s nobody who can come close to the experience that my staff and my organization have on 3D. There’s only one way that you learn in 3D, and that’s by being close to the customers and working alongside them, seeing things through their eyes. We’ve taken our lumps, and we’re still standing, and we’re looking forward to the future of 3D.”
Made in Japan?
Greg Gondek, president of The Act Group, is disappointed more traditional copier companies haven’t entered the 3D space yet, although he did reference one major OEM that attempted but failed because, as he said, “they dabbled.”
According to Gondek, more than 400 companies are making 3D printers at last count, but there is no dominant player.
“We’re waiting for the right manufacturer to get into the game that has the distribution channel to control the market,” observed Gondek. “There’s some good manufacturers right now, but they’re not big enough, or they’re unable to build the infrastructure to dominate on a national basis.”
Ultimately, he predicts there will be four main players, and one or two could be Japanese copier manufacturers.
“A lot of the Japanese companies make parts for 3D machines, so they’re all into it to a certain degree,” said Gondek. “If you look at where 3D has been most successful in production, it’s Japan.”
Access Related Content
Visit the www.thecannatareport.com. To become a subscriber, visit www.thecannatareport.com/register or contact cjcannata@cannatareport.com directly. Bulk subscription rates are also available.
You're viewing The 3D Dilemma, in a text-only format to view this issue in all its entirety please download it from our Past Issues page
