Are we ruining the secondary market?

[Kevin Jones]

as far as custom knives being an investment, i'm sure people have made lots of money re-selling knives, however, i'm more inclined to approach collecting knives like this. i read some advice to a newcomer on another forum that went like this. "buy what you like, you won't lose too much money." that made sense to me.

I think it could be put this way: do your homework, refine your taste and you won't risk losing much by buying what you like
I didn't pull the trigger on some knives I like a lot, because they won't sell good in the secondary market and the difference is more than I can afford if I must sell. Would buy them in a heartbeat if I didn't have to worry about money. I'm quite sure this happens to other knifenuts.

The two viewpoints above prompted my starting this thread, as IMO the condition of the secondary market is worthy of discussion.

Are their collectibles other than custom knives were collectors expect or at least accept so graciously losing money when they sell? Other than say bennie babies and such?

Another thing, why is it that many collectors will pay more sometimes much more for a new knife from the maker (primary market) than a like older example (secondary market) that's in as new condition?

I collect other items and have spent considerable time around others who collect, so since becoming interested in custom knives I have wondered about the above as custom knives seem to be fairly unique as compared to other similar collectibles.

Do we collectors have the ability to at least impact secondary market pricing if not control it by what we ask for or accept for our knives?

I understand and appreciate that some only collect for the enjoyment and would rather not even deal with the financial side of it, but I can't believe any collector would as soon lose money as break even or profit.

Can a collector buy what he/she likes yet still avoid losing upon sale of such?

Makers, please share your thoughts/views/opinions as what you are able to get for your new pieces is greatly affected by your secondary market pricing.

Feel free to answer any of the questions above and/or offer your opinions and views on the subject. Thank you in advance for your participation.

 

[Don Hanson III]

I've been told by some, that my knives are priced too low. I've also been told by a few, that my knives are priced too high.

My knives are priced right where they should be

Most dealers price my knives higher than my price, others right on the money and on occasion, below. Some sell quick, others are slow to move. Depends on the piece first, photo second (this is key) and price third.

I don't think we are ruining the secondary market, it is larger and stronger than ever before.

Some collect knives for enjoyment, some for investment and some do both. It's all good

Just rambling here, not sure if it makes any sense

Kevin, the second quote was from flava, I do believe.

 

[Marcel54]

When I started collecting knives I bought what I liked (without regard for the maker) and only that. I learned soon enough that that only cost me money. I got educated real quick when I tried to sell my first knife. Combined with the information from forums like this, men like Les Robertson and the fact that I don't have unlimited funds made me realize that if I wanted to sustain this hobby I had to approach buying and selling knives as an investment as well. That resulted in more carefully selecting the makers and pieces that I bought.

The result: in the last two years I sold or traded 19 knives (to collectors and dealers alike), just to further and better my collection, with an ROI of 14,32% which I totally reinvested in my knives. :thumbup:

I think that if we as collectors don't sell our knives below our cost that we don't spoil the secondary market. If we don't follow that rule we do spoil the market and the position of the maker and ourselves IMHO.

Marcel

 

[Kevin Jones]

When I started collecting knives I bought what I liked (without regard for the maker) and only that. I learned soon enough that that only cost me money. I got educated real quick when I tried to sell my first knife. Combined with the information from forums like this, men like Les Robertson and the fact that I don't have unlimited funds made me realize that if I wanted to sustain this hobby I had to approach buying and selling knives as an investment as well. That resulted in more carefully selecting the makers and pieces that I bought.

The result: in the last two years I sold or traded 19 knives (to collectors and dealers alike), just to further and better my collection, with an ROI of 14,32% which I totally reinvested in my knives. :thumbup:

I think that if we as collectors don't sell our knives below our cost that we don't spoil the secondary market. If we don't follow that rule we do spoil the market and the position of the maker and ourselves IMHO.

Marcel

Marcell, you mean that you actually buy knives you love and still make a 14.3% return on investment?

Yes, some collectors profit consistently which helps finance their fine collections.

Sounds like a case of having your cake and eating it too. :thumbup:

By the way, how do you know you enjoy a 14.3% return on investment? Sounds like you are "managing" your collection very well.

 

[DaveinNY]

Knife collecting does seem to be unique compared to most sporting collectibles. Since most of my collections are in the vintage category it may not be very relevant, but I have yet to loose money on anything sold out of my collections. Although I don't primarily collect for profit, it's nice to know that most of what I do collect will increase in time over what some interest bearing account will return. Since it is the collectors themselves that create the market, and if it's acceptable behavior to lose money in a market they created in the first place, then the problem stems from those collectors that accept such behavior. The romance of collecting can be a great feeling, but losing money won't help much on that retirement condo.

 

[wolfeknives]

The knife market is very similar to the art market. In fact in the last few years the similarities have increased. The vast majority of artwork produced will never increase in value, in fact much of it becomes monetarily worthless with time. However many of these"worthless" art pieces are very good, and certainly give the owner much pleasure. For that reason alone the hard earned money spent on these can never be considered wasted. If art (or knives) are collected as an investment, the selection of pieces becomes very limited if you still want to be true to yourself and own only pieces you truly enjoy. The danger is that a collection will end up with works that the collector regard with indifference.
If a maker is very prolific, there is very limited reason for eary work to increase in value beyond the current prices charged by the maker for his latest work. A "fresh" knife can always be had from the maker. It comes down to supply and demand.
Collectors and dealers do in fact dictate the after market value. Some makers are "hot" for a while, the prices go up. then suddenly the market will get "cold" as a maker falls out of fashion, and prices will drop. However, as with very good art, those makers creating unique and outstanding work which tends to be timeless, will almost always rebound.
Given the rule of supply and demand, makers creating very refined pieces will tend to hold their value, or even increase, sometimes dramatically. This is of course due to the fact that these makers often have a limited output, and after market prices are now dictated by collectors/dealers. Unfortunately this places a certain body of work out of reach for most, just as it does in collecting fine art. On the bright side, many of the great art collections were put together by collectors with a good sense of what is "great", and purchased before the artist became popular. It pays to work hard at developing this sense.
Wolfgang

 

[Jose Reyes]

The knife market is very similar to the art market. In fact in the last few years the similarities have increased. The vast majority of artwork produced will never increase in value, in fact much of it becomes monetarily worthless with time. However many of these"worthless" art pieces are very good, and certainly give the owner much pleasure. For that reason alone the hard earned money spent on these can never be considered wasted. If art (or knives) are collected as an investment, the selection of pieces becomes very limited if you still want to be true to yourself and own only pieces you truly enjoy. The danger is that a collection will end up with works that the collector regard with indifference.
If a maker is very prolific, there is very limited reason for eary work to increase in value beyond the current prices charged by the maker for his latest work. A "fresh" knife can always be had from the maker. It comes down to supply and demand.
Collectors and dealers do in fact dictate the after market value. Some makers are "hot" for a while, the prices go up. then suddenly the market will get "cold" as a maker falls out of fashion, and prices will drop. However, as with very good art, those makers creating unique and outstanding work which tends to be timeless, will almost always rebound.
Given the rule of supply and demand, makers creating very refined pieces will tend to hold their value, or even increase, sometimes dramatically. This is of course due to the fact that these makers often have a limited output, and after market prices are now dictated by collectors/dealers. Unfortunately this places a certain body of work out of reach for most, just as it does in collecting fine art. On the bright side, many of the great art collections were put together by collectors with a good sense of what is "great", and purchased before the artist became popular. It pays to work hard at developing this sense.
Wolfgang

Well put, Wolfgang. :thumbup:

 

[Kevin Jones]

I've been told by some, that my knives are priced too low. I've also been told by a few, that my knives are priced too high.

My knives are priced right where they should be

Most dealers price my knives higher than my price, others right on the money and on occasion, below. Some sell quick, others are slow to move. Depends on the piece first, photo second (this is key) and price third.

Don, I'm going to put you on the spot as I don't think you will mind.

Do you believe knives that you made say two years ago are worth at least as much on the secondary market if not more than you correctly make and sell similar knives for?

And do you agree that collectors tend to buy and pay more for new knives than older like knives? If so why is this?

Just for the record, I believe that a knife made by a maker fives years ago should be just as sought after and/or valuable as a similar knife he makes today.

I don't think we are ruining the secondary market, it is larger and stronger than ever before.

I definitely believe the secondary market is much larger (actually part of the problem) however believe collectors that have tried to sell knives will disagree it's stronger. I believe it's getting harder for collectors to break even or heaven forbid profit on the secondary market. But it can be done if the collector knows his knives and is selective in what he/she buys.

Some collect knives for enjoyment, some for investment and some do both. It's all good

Very true. To each their own.

Just rambling here, not sure if it makes any sense

Kevin, the second quote was from flava, I do believe.

Correct, however I expect that Doug agrees with it though not to put words in his mouth.
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[Tai Goo]

I think there needs to be some basic distinctions between, collectors, investors, dealers, entrepreneurs and users.

I've always thought of a collector as one who buys a knife to keep it, or save it,… not to sell it.

I think the secondary market can be "artificially" blown up in certain cases, and it can pop just like a bubble!

In essence, consumers inflate certain knives, trends, makers, in the secondary market,... and then complain about it afterwards.

 

[Kevin Jones]

Knife collecting does seem to be unique compared to most sporting collectibles. Since most of my collections are in the vintage category it may not be very relevant, but I have yet to loose money on anything sold out of my collections. Although I don't primarily collect for profit, it's nice to know that most of what I do collect will increase in time over what some interest bearing account will return. Since it is the collectors themselves that create the market, and if it's acceptable behavior to lose money in a market they created in the first place, then the problem stems from those collectors that accept such behavior. The romance of collecting can be a great feeling, but losing money won't help much on that retirement condo.

Bingo Dave. Just my point.
It will take collectors to fix this, and only then if the majority of collectors deem it needs to be fixed.

 

[Kevin Jones]

I think there needs to be some basic distinctions between, collectors, investors, dealers, entrepreneurs and users.

I've always thought of a collector as one who buys a knife to keep it, or save it,… not to sell it.
I think the secondary market can be "artificially" blown up in certain cases, and it can pop just like a bubble!

In essence, consumers inflate certain knives, trends, makers, in the secondary market,... and then complain about it afterwards.

I strongly disagree Tai as I love custom knives as a collector, however realize I can profit thus help improve my collection as an investor.

Some collectors get their enjoyment "in the hunt" and don't keep knives very long. To each their own.

 

[Marcel54]

Marcel, you mean that you actually buy knives you love and still make a 14.3% return on investment?

By the way, how do you know you enjoy a 14.3% return on investment? Sounds like you are "managing" your collection very well.

Well Kevin you should as you provided the tool to keep record

But seriously ........ I think it is neccessary to manage your collection. I've invested a great deal of money (at least to my standards) and time in it, and of course it should stay fun and not all about the money, but if you take collecting seriously it's not about accumelating but about putting together a coherent collection.

I've always thought of a collector as one who buys a knife to keep it, or save it,… not to sell it.

Tai, of course there will be people that will keep everything they buy but for myself....my taste changes in time and I don't have unlimited funds so to let my collection flourish I need to "rotate" it. To give you an example....the last couple of years I had my focus on daggers and although they will be the mainstay of my collection in the last couple (and the upcoming) months I'm busy to spread out into the realm of the forged Bowie. Out of interest and to make my collection more allround and sellable if I want or need to.

Marcel

 

[Don Hanson III]

Kevin,

Yes, I do feel knives I made two years ago are worth at least what my current prices are, some more than. But it does depends on the piece, some are more desirable than others. Alot of the autos I made from 98 to 04 have resold for 2 to 3 times the original price

I feel new knives from a maker are more desirable, because they are new, unseen and untouched. Each new knife should be better than past knives, right? Hell I don't really know

Sometimes, I feel you guys think to much

I said Doug first but it was flava

 

[APerna]

I've been collecting knives for more than 20 years now. I first started out with Randalls (more than 20in my collection) then shifted to tactical folders(more than 50 custom) and now i'm interested in slipjoints. When I first started my first Randall was model 15 at a cost 0f $125. Altough I can sell my Randall collection for a niece profit I'm not sure that pertains to other knives especially folders. Most people prefere the newest and latest steels designs etc which will leave the majority of my collection not very interesting in the near future. This is why I don't collect for the resale value. I collect because it pleases me.

 

[RogerP]

Sometimes, I feel you guys think to much

Sometimes I feel much the same.

Roger

 

[Kevin Jones]

Kevin,

Yes, I do feel knives I made two years ago are worth at least what my current prices are, some more than. But it does depends on the piece, some are more desirable than others. Alot of the autos I made from 98 to 04 have resold for 2 to 3 times the original price

I agree Don that your knives are appreciating in value, thus you were a good example and a good businessman. I notice you will post collector's (that support you) knives for sale on your website, which is a great service you provide. It also helps you, as knives lingering on the secondary market (supply & demand) will bring down value of of a maker's new knives.

Now another question? Do you consider yourself the exception or the rule? In other words, do you think most maker's knives are doing as well on the secondary market?

I feel new knives from a maker are more desirable, because they are new, unseen and untouched. Each new knife should be better than past knives, right? Hell I don't really know

Don't completely agree, in that as makers get older or for other reasons at times their knives start to decline in quality.

Sometimes, I feel you guys think to much

Yep Don, I think a lot when I put thousands of dollars down for customs knives or whatever each year. Perhaps if more collectors thought a lot they wouldn't be losing money on their knives.

I said Doug first but it was flava

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[betzner]

I agree 100% with Wolfeknives and his comparison to the art market. The similarities are amazing, probably because so many collectors are attracted for the art of the knife, the look of the knife - just as art collectors are attracted by the art piece.

I collect knives because I love them. But I learned early on that what I initially started collecting probably would have no value upon sale. I suppose at that point I had 25 knives. It was then I decided to start taking a hard look at "name" makers' knives, the more expensive ones which I considered crazy to collect - because of expense - and after all, "It's only a knife" (but stunning, nonetheless). Well, I went in whole hog AFTER DOING MY RESEARCH. And to my delight, when I started selling off those first 25 knives, I made a profit on all but one. They were lower end, but had some art in them, and I was into them "good".

Three criteria are essential for me. First, I must love the knife. Secondly, I want to be able to sell it tomorrow for what I paid for it today. Lastly, the knife should have very good potential for appreciation. Sometimes #1 controls a bit too much, but that sure can't be a bad thing. Those are the knives I call "keepers".

But the bottom line for the secondary market boils down to exactly what Don Hanson said: "Some collect knives for enjoyment, some for investment and some do both. It's all good".

 

[betzner]

As to older knives perhaps not getting the same dollars as new ones straight from the bench, I find, at least IMHO, that this has to do more with the fact that current styles and current trends produce current pricing. When it comes to vintage collectibles, it is again like art. Only the remembered masters will hold value.

 

[Kevin Jones]

Well Kevin you should as you provided the tool to keep record

Marcel

I didn't mention it to bring attention to my tool, but only to make the point that some collectors can't even tell you what they paid for their knives, much less how much they have gained or lost in value. Not that there's anything wrong with that.

Perhaps that's the secret, if you don't know how much you have lost, then it's OK.

 

[Tai Goo]

I don’t think that it’s really that much different than anything else,… especially other “collectables”. It’s governed to a large extent by “cycles” and trends.

However, if you want to make money in the secondary market you have to be knowledgeable enough to “buy low and sell high”. What this means is recognizing “up and comers” before their prices become over inflated, to recognize established makers who consider the secondary market and leave room for resale, and to recognize new trends before they become full blown.