Chapter 1: What is On-Demand Manufacturing & Take Rate?
.............the fallacy of on demand…….hire a broker!
On-Demand Manufacturing vs Take-Rate
Take-Rate, a commission on placed orders & On-demand are part and parcel of the same thing. On-demand manufacturing is an approach to production where goods, products, and parts are produced as needed, in specified quantities, and within a required time frame. It is a method of manufacturing that minimizes the need for inventory control and warehousing costs and helps customers in marketing their products. The premise of on-demand manufacturing is built on the concept that orders are immediately placed into production upon receipt, resulting in on-time deliveries and quick turnarounds.
Xometry, an on-demand manufacturing marketplace, has demonstrated an effective "take rate" (gross margin) of around 20%, meaning they retain 20% of the value of the manufactured goods they facilitate through their platform.
Here's a more detailed explanation: Take Rate: In the context of marketplaces like Xometry, the "take rate" refers to the percentage of the total transaction value that the platform retains as its revenue, essentially the gross margin.
Xometry's Business Model:Xometry acts as an intermediary, connecting buyers with manufacturers and setting the price for the manufactured goods. Their revenue is derived from the difference between what the buyer pays and what the manufacturer receives.
How they achieve a 20% take rate:Xometry uses AI and algorithms to match manufacturers with hard-to-source parts, and they are responsible for finding a manufacturer willing to take on the job.