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A challenge from Syderco?

M

Mike Turber

Joined
Oct 2, 1998
Messages
5,461
Well Sal said it himself. He would like to here our ideas on how to handle the situation at hand. My idea involves educating the dealer on how to make money at better margins. I know this sounds like a price increase in disguise but think about your very words spoken right here on BladeForums. Most of you agree that you buy from dealers who sell at higher prices. Your reasons are many and do not need to be readdressed but the overall theme was the service your received.

I think this echo's my statement in the Spyderco thread that all that is needed is to educate the dealers on how to handle their customers more efficiently. Then the normal attrition rate takes over and the free market system works again.

So what are your ideas? How would you handle your customers, dealers and distributors not ELU's, concerns if you where in Sal's shoes?

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Best Regards,
Mike Turber
BladeForums Site Owner and Administrator
Do it! Do it right! Do it right NOW!
www.wowinc.com






[This message has been edited by Mike Turber (edited 31 December 1998).]
 
I got a novel idea!!!

lose the addvertised price policy and just go on living like it never happened!

Sincerely,
Adam

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"There are 2 kinds of people in life. The ones who don't post on this forum and the ones who are going to heaven" ;)
 
Make items with functionality not available from any other maker.

Jim March
 
Mike...I posted the following on the original Spydie pricing thread (post #73
smile.gif
)! and then found this so I'm repeating it here:

bald1
posted 31 December 1998 11:35 PM ET (US)

Sal,

Thanks for taking the time to answer my questions. I happen to agree about the Moran being a "steal" right now and that it's original MSRP put most of us off. I personally have now bought 5 of them and have had Scott Evans of Edge-Works create 2 different concealex (kydex type material) sheaths: one a slip for my pocket and the other an ingenious multicarry tactical piece for my naval corpsman son. They have proved to be quite popular. Given the problems with the original kydex sheath that Bob Dozier created for you (Bob makes great stuff but this particular sheath was too difficult to extract the blade from), you might consider checking out these designs for possible bundling when you generate your next production run of Morans. A new sheath would justify a new pricing. I also didn't realize just how labor intensive production was for this model. The information you've shared certainly makes me appreciate them more.

I also appreciate your filling in the blanks on the model killing issue. It makes much more sense now. I actually bought one of the titanium police models from the Cutlery Shoppe but found the individual piece flawed and returned it. It was the only Spyderco knife I ever had a problem with. Stuff like that happens regardless of the best QA systems in place.

You're right about the Net being somewhat overwhelming. But as Mike pointed out in his most recent post, watching the evolution may not be the best way to go. Your involvement here is a big step in the right direction. Small manufacturers like Will Fennell of EDI have found out that having a presence pays off with big dividends.

Mike may be on to something when he suggests offering "perks" or incentives to dealers, be they net or storefront, who demonstrate knowledge and customer service to the end user/buyer. What came to mind when I read his comments was the certifications firearms manufacturers bestow on gunsmiths and gunshops. Even the use of an "authorized Spyderco dealer" certification would make a difference to many of us if it meant that you fully supported them, they got new or limited editions on a first refusal basis, they were committed enough to your product line to make the effort to qualify, that they carried sufficient inventory on hand, that you gave them perks (such as a slight additional non-volume discount or perhaps like auto dealers a 90 day grace period before having to pay for inventory as an incentive to stock and market the wares effectively to avoid the burden of a substantial inventory investment... this in lieu of any shared advertising expense schemes).

To help level the playing field for storefront operations and their admittedly greater overhead, set up a centralized Spyderco web site listing ALL your certified dealers. Folks would be steered to them be they Net or storefront.

One idea that has occurred to me is having a "coop" site where those storefronts without a net presence can "buy in" or earn with certification the capability for online secure orders to be referred to them on a geographic basis. The only hang ups here that I see right off is having real time inventory information available and how pricing would be handled. At any rate my thoughts go to the storefront who for whatever reasons won't independently invest in a web site with hardware, software and maintenance support. A coop approach of some type would seem to be a workable solution that mitigates against the majority of their complaints about the InterNET competition.

Obviously what I've posted is extemporary and not fully developed but I certainly think there are kernals here worth contemplating. Just as Mike's comments about your being in a position to challenge Benchmade should give just cause for pause. He's right in my view.

Again I appreciate your participation here and trust that it will be for the long haul and not just about the recent pricing policy issue. Maybe in the months to come you can clear up things with the real story about the discontinuance of the black coating you had at one time made available on the Endura and Delica models.

Best regards,



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-=[Bob]=-

Bald is beautiful! Rub a dome for luck today!

 
Hmmm...I am having some technical difficulties here, my post (#74) doesn't want to show up on the other topic for me. Hopefully it is just a problem with my server.

As a manufacturer, I would probably try and cater to the differences between the types of dealer that I have. I would push the more specialty items on the catalog and internet dealers, and the fast selling, dime a dozen items on the storefronts.

Catalog and net dealers have a broader market, and and have the ability to reach more people, especially people that know what they are specifically looking for, while most stores are catering to people who are "just want to buy a knife".

I guess that's how I see it anyways...

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Off in search of Knirvana....yek



 
Thanks. Some excellent input. Any additional "solutions" to the pricing / discount / dilema would be appreciated. Perhaps other "factories" might add / learn from the rap. I believe this is a deeper problem than many realize. Bob, you seem to have a good look at the "big picture". I'd like to refine some of your input. Mike, you are right. We are all of the same interest and it's time for some evolution. I believe we share interest in the "dealer training". See you at SHOT. When are you there?

Interesting scenario: "A" company produces "X" gizmo. "B" company buys lots of "X" gizmo and puts them out at a very cheap price. Other companies stop buying "X" gizmo from "A" company because they cannot sell them at reasonable margins. "B" company then dictates to and controls "A" company. "A" company tries to cut off "B" company to regain control of its own market. No No! cannot do...price fixing, and "B" company is bigger. "B" company knocks off "A" company by producing a copy of "X" gizmo. "X" gizmo was originally invented by "A" company. "A" company is gone...you now buy "X" gizmo from "B" company.

Just one of the "real world" scenarios to complicate the issue and share history.

thanx for the input.

sal
 
Mike,
I responded to Spyderco's challenge in the last post on the "Spyderco Pricing Policy" before the thread was locked.
Does that mean I win with the last post ?
wink.gif

The "challenge", in reality, belongs to the manufacturers. They have to convince me to part with my money for their product and not someone elses. If not, am I missing something here ?
Bill

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Talk is cheap. Free speech is not.

 
Bill. Saw your "winning" final post. appreciate the point of view. Perhaps it is not a contest. Perhaps the manufacurer is pleased to be offering what it thinks is the best solution to the "problem" (what ever that may be). If you think it is a good solution, you might purchase one, thereby enjoying the solution and assisting the manufacurer in continuing to produce solutions for you and others to enjoy. Just a slightly different point of view. The makers and the ELU are the yin and yang of the knife industry.

The competition to produce the "best" solutions is the "game" among the knife makers. Last year Mclaren was the winner, maybe next year it's Ferrari. The makers are knife aficienados, just like you and me. A race with only one car is boring. Dane said Spyderco lost him. Maybe next year Spyderco will win him back. Just some thoughts to share while we solve the pricing quandry.

By the way, thanx for the acceptance (factories being what they are and all). This forum is like going to a knife show.

sal
his this
 
Sal,
You are right-on about acceptance here. It was instantly yours just for posting.
Glad you are here.
By the way, you come across totally different than the first pontification made in behalf of your company.
One deficiency about the web is how easily a comment can be misconstrued. That happens because the other senses (sight, motion, facial expressions, etc) are absent.
The only means to overcome this fact is enhanced web presense. Over time, your "web-personality" becomes apparent and you have less miscommunication.
You are also right about this forum being a 24 hour knife show. Ask and you will receive. Voice an opinion and receive a contrasting one. Misbehave and become ostracized. Respect and behavior are very important in this new medium of communication.
Welcome.
Bill

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Talk is cheap. Free speech is not.

 
Well, one way to stop company "B" from killing off Company "A" and selling the rip off of product "X" is to patent "X". then when company "B" tries to produce product "X" they can't. Plus, lets say company "A" produces lots of models, like spyderco does. Then when company "B" makes there own product "X", you cut them off and they are left with "X" while you have products "A"-"Z", including "X". Company "B" dies out because they only have 1 knife to sell, "X". And everyone("A") lives happily ever after.

But... If company "A" starts say that company "B" can't advertise a price lower than MAAP. Lioke spyderco. Then company "A" looks like a bully and that give company "B" a idea, rip off product "X" and use this as the reason they need to get buyers behind them and not company "A". People buy "X" from company "B", company "A" dies out because nobody buys from them because they tried to control company "B". When company "A" goes under "B" rips off all of "A"'s products, like folding knives and one Fixed blade. "A" is gone. "B" is left.

But them again I might just be projecting.

Adam

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"There are 2 kinds of people in life. The ones who don't post on this forum and the ones who are going to heaven" ;)
 
Sal,

I will be at the show all the days it is open. We can meet anytime which is convenient to you. You can email directly to set up a good time.

miketurber@wowinc.com

Or just call me as I may be easier to get ahold of.
1-800-969-7771

Their is a vast cauldron of knowledge outhere to tap into and the neat thing about the internet is that you can tap this information at anytime. In fact we could even set up your very own forum right here and you could use it as a customer service board. This would alleviate many of ther phone calls which come into your offices asking the same question over and over again. Simply a link form your site would be all that is needed. We will be setting up several manuafcturers forums in the near future and of course Spyderco is welcome. Then you can pick one of your customer service reps to moderate it. It really is a great idea and many of our members would actually answer most of the questions as they love to help out.

------------------
Best Regards,
Mike Turber
BladeForums Site Owner and Administrator
Do it! Do it right! Do it right NOW!
www.wowinc.com






[This message has been edited by Mike Turber (edited 01 January 1999).]
 
Yes, Welcome Sal. You will find people here extremely receptive to knife makers and manufacturers. The internet is about information, and we all crave it from the source. When someone like yourself comes in and gives us the word from the source, we come to understand rather than pontificate. This type of personal communication from industry leaders to the masses is what started off the Benchmade Forum years ago, and basically is what made this whole internet knife society so large in such a short time. What you see before you is a product of the Benchmade Forum with Les DeAsis and Vice President Mark McWillis hosting it personally, answering all our questions from the top.

I appreciate your scenario over the problems of of allowing people to sell at discount, but I still can't grasp why the whole thing can't just be a market trend? I don't see anyone putting Spyderco out of businees with imitations, so the scenario does not hit home. There are already carbon copies of Spydercos available from Taiwan, and I don't see anyone selling their knives to buy them.
If people are buying your knives at discount, and the people that are overpricing them in mall stores are going out of business, then that is just capitalism and the market is moving into a new realm. The guy that finds the best way to distribute his product at the best price wins. It seems to me that you are still getting the same price you always have for the product, so you are not losing out, in fact, you should theoretically be selling a lot more because people are buying more of them at the lower markup. The distributor/salesman is the one making the choice to lose profit margin and increase volume by selling at a lower price (with better service I might add!).
Forgive my ignorance, I am a scientist and not a businessman, but that is just the way I see it from my viewpoint. I predict that if you filled us in on the flaws of my argument, then we all might come to understand this dilemma a little more.

Thanks for your time,
J. Thaddeus Hornbaker

Ps- Many items are pseudo-price fixed in America, like grain and milk, especially in California. Here in San Diego, Milk is $4.00 a gallon and our gas prices are the highest in the country, for no reason that any gas company can come up with! I doubt that anyone else on the forums has to hunt for a gas station selling at $1.39 on the cheapest regular unleaded gas available. That adds up to a lot of money out of my pocket over a year, and millions into the pocket of the gas companies. The difference is, I HAVE to eat, and grains and milk are part of that. I HAVE to consume gas on some form, usually by driving myself. I don't HAVE to carry a Spyderco. Unlike many of today's Americans, myself and others here are the type that value character and honor above all else. When I pull out a knife, if I don't respect the maker, I get a yucky feeling.
 
hey i want to see a spyderco forum here! That would be cool

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Adam, interesting puzzle. As it turned out Company "B" found a legal loophole in Company "A's" patent of gizmo "X" (common legal strategy thess days). Company "A" was too small to properly defend its idea (expensive) and wasn't able to produce lots of models like Spyderco (difficult to do, even for Spyderco). That's why it lost. Not just? Not fair? Hard to say. Reality is a firm but honest teacher, but keeping things fair is what separates the humans from the lower life forms, right? "Patent reality" might make an interesting thread?

Mike, thanx for the offer. I'll bring it up with the crew. Could be a fun. Some very hip visitors at this site. I don't think that we could effectively maintin a forum of our own at this time. Not enough manpower. It would be unrealistic and unfair to think that we could do a good job. Being part of a forum at this site may prove to be an effective synthesis. call you Monday on SHOT mtg.
sal
 
Sounds like a good topic, I'll bring that up.

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Kevin Jon Schlossberg
SysOp and Administrator for BladeForums.com

Insert witty quip here
 
Hello, all, I'm a bit confused in regards to this whole topic...On one hand, the basic storefront dealer can't sell products at the deeply discounted prices of "online" dealers for a variety of reasons. But, is it the manufacturer's responsibility to attempt to control this? In most retail operations, internet commerce is starting to take a large piece of the pie, so it's not just knife manufacturers that are facing this. Unfortunately, this can't be answered simply, and one side of the debate may have to be controlled, eventhough it may alienate some...i.e. Benchmade's new distribution policies...So, Sal has the right idea to solicit for advice, especially here, and I think it's a great compliment that he has done this...

--dan
 
Sal,

I thought your firm's move to list folks who had properly licensed the hole in the blade opening scheme was particularly effective from a consumers point of view. We could easily figure out who the "gamers" were.

I hope your gang approves the notion of a forum here. The benefits are not to be underestimated. You commented about wanting to refine some of my input. Please do. As I said it was rather extemporary but I feel that the "co-op" idea may have merit. Look at how the car dealers have geographic lookups on their websites for dealers in the locale of the individual making an inquiry. Combine that with an automated stockcheck or secure online order for those "certified" storefront dealers and they have an InterNET presence too. It'd be interesting to hear what your gang thinks of some of the ideas posed here on the forums. Might be an interesting idea to print out copies to distribute to them several days in advance of your next "head shed" meeting and ask them to be prepared to discuss impressions and aspects of what they've read.

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-=[Bob]=-

Bald is beautiful! Rub a dome for luck today!

 
Thanx for the kind words.
Thaddeus - The problem is not entirely a business problem. There might be a moral issue here. Although there is some argument to the fact that even moral issues eventually default back to a business issues.

Yes it is true that Spyderco at this time would probably not "go belly up" over a pricing issue and we would probably still sell all we can produce (we have a limited production capacity), so why do we care? I dunno. maybe because caring and cooperation are the alternative to "survival of the fittest". The head has to cooperate with the eyes and the feet to effect forward motion.

I will try to peel back the onion farther...sometimes pretty wordy...sorry. Some of Spyderco's core business philosophy didn't come from the "business book". This would be an example:

When We first tried to enter the European market in 1988 (a tiny mouse stowing away on an ocean liner), we followed all of the business rules of the area..."when in Rome, etc". We quickly learned that the distribution system was little more than a jungle, void of cooperation. "Exclusives" in a country had little value as the larger distributors would cross borders. Product lines were "cherry picked" so the ELU really din't have exposure to what the factory had to offer, distributors would expect and get un equal pricing from manufacturers, etc. A system riddled with corruption is no longer a system. We believed that the distribution system would be more effective as a link between Spyderco and the ELU with cooperation (ie; teamwork). Because of the departure from normal of our new "rules" we met with a great deal of resistance. It took a longer time to find the "right" distributors, but we now work with a team of distributors in different countries that work together and the cooperation has made us all stronger. We really didn't try to create an "even" playing field so much as a "fair" one. Michelle (Our Sales Manager) helped develop and maintains this international network and she is very sensitive to the long term destruction caused by bickering distribution.

Back to the USA: In the "Ocean of business", the storefront dealer is the smallest of the fish. He is trying to earn a living servicing a fairly small number of people within a geographical area. This has its own demographic problems (including finding and hiring employees as knowledgable as yourselves). The local mass merchant, Walmart, etc. comes in and greatly affects his "turf". Walmart advertises "Victory model XJ" at $10 and he stops selling that model. Now he must get creative just to survive. If he doesn't survive, the ELU of the area have to be content with the mass merchant or go outside of the area for the variety. The Net dealers are the biggest fish! Their territory is vast and they affect everyone's turf. There are millions of potential customers that are not near storefront dealers, but there are also millions of potential customers that need and want their local "knife shop". It is Michelle's responsibility to keep the "highway" between Spyderco and the ELU honest, fair and proper. In this manner the ELU will perceive and believe that Spyderco is a good investment throughout the business chain. We're not saying how you should price our products as much as we are saying don't destroy your fellow dealer just because you are strong enough to do so. We all need them. MAAP pricing may ultimately prove not be the best answer, but it is a beginning and has exposed the problem to a group capable of creating better solutions. We've already received some excellent suggestions, which we appreciate.

Re: a forum. The major problem here is time. It is much easier for me to be here during New Year's weekend than during the SHOT show. I'm sure that Les and Mark must have run into the same problem with a Benchmade forum. The Spyderco crew is very aware of the Internet. Please keep in mind that Spyderco is a total of 60+ crew and 3 consultants. We're "grocking" the concept now.

sal


 
Sal,
Your executive officers all should at least have a laptop and permission to take it home.
Also, its a good idea to provide all your employees with unlimited web time at their homes if they will spring for the telephone hookup.
What happens is everyone "networks". All of a sudden you have 24 hour teamwork.
You will be amazed at all the communication that goes on.
There's a marketing shift underway at this very minute. Its advised that all survivors board the train now.
Bill

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Talk is cheap. Free speech is not.

 
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