Are we ruining the secondary market?

Tai Goo said:
The economy effects everything. However, I thought we were talking about influences other than the economy. Also, which economy are we referring to? The U.S.A?

One nice thing about doing business on the internet is that we are dealing with a "Global Economy"... somewhere someone always seems to have some money… :)
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That's the problem, you think too much, lol.
 
The economy effects everything. However, I thought we were talking about influences other than the economy. Also, which economy are we referring to? The U.S.A?

One nice thing about doing business on the internet is that we are dealing with a "Global Economy"... somewhere someone always seems to have some money…
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Given the weak dollar in relation to the euro made me decide to focus on makers that get paid in dollars for the last year or so and for the coming period as well. I get a lot of knife for my euro and when the dollar regains his strenght somewhere down the line my collection appreciates "instantly":cool::thumbup::D

Marcel
 
Don Hanson III said:
Actually with the large number of knives for sale on the net, the dealers do play a huge roll in the secondary market.

So, how is the secondary market being ruined and who is ruining it?

I don't feel the secondary market is broken and I'm not pointing a finger at the dealers. Just thinking too much :D
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I don't think anything is broken either Don,... it's just cycling! :)

Either that,... or we're just trying to imagine what it would be like if it were broken and who's fault it would be...
 
I have no problem with the secondary market. It has treated me well with all the makers I have acquired. But I do also see those who go into a knife and turn it around quickly, for whatever reason, and lose money. But it is their choice. They do it to themselves.

I think one's perspective on whether the market is broken or not is where that person sits in what part of that market. It has treated me very well and I see no problem at all from where I am at in the secondary market.

EDIT: But I would again emphasize that it is like the art market, which wolfeknives so well described. It has it's economic ups and downs. And the vast majority of artists do not "make it" bigtime, in the final analysis.
 
peterinct said:
T
While I don't consider the investment value as top priority, my philosophy has been to buy things I like when the price (in my opinion naturally) is such, that should I decide to sell the item, I could get at least what I paid for it or perhaps profit.
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As usual Peter your comments are shrewd and succinct.

I have drawn out the above quote because it is germane to my perspective on this matter. That perspective is as follows:

If you make purchases using the rationale you state above, then you can be sure that so do more people. If fact you can guarantee it. We see it discussed on these forums everyday, so much so that the art of buying a knife to make a return holds nearly as much credence as the knives themselves ..... isn't that what the whole education of collectors is all about on this forum? This forum has become the shining light into how to "buy right".

Now heres the irony ..... if everyone is buying right, no one is buying wrong ... if everyone wants there pound of flesh or " to buy things I like when the price (in my opinion naturally) is such, that should I decide to sell the item, I could get at least what I paid for it or perhaps profit." as Peter puts it, then none "wants" to pay a fair market price ..... wheres the profit in it?

So as to the question are we ruining the secondary market?

Yes we are...... by making it such an important part of the buying and collecting experience.

The truth is that any SHORT TERM gain on a knife purchase is from the process of arbitrage in the market, either time, or an imperfection in the information or knowledge of either the buyer or the seller. By focusing and educating we are reducing the imperfections, creating patience, and evening up the knowledge of both parties.... as a result the only real "profit" to be made eventually will be from the long term appreciation in the likes of the Morans, Walkers, Loveless etc etc. plus the speculative gamble on some "new" names and rising stars.

Stephen
 
Your analysis speaks volumes of the investment community in general, where it's the short term that counts, rather than the long term. The short term profits are more of a speculative nature, while long term profits are a result of long term focus on basics.
 
One thing that has struck me as I have been selling some pieces is that it is hard for an individual collector to connect with the "right" buyer. It's easy to sell knives within a certain price point, but it is hard to get the most bucks for the bang. Dealers play their role here as intermediary, but they are fairly inefficient (slow & expensive), from a business stand point. I don't know if this is an issue which exists to such an extent in other collectibles.
 
Wow... Kevin lit this place on fire this morning :D... already 4 pages!

It's nice to see established and successful makers like Don and Tai posting their thoughts on subjects like this.

I knew if Tai sat down at the computer without any peyote on the forge he'd make valuable contributions here ;) :p

I'm in an odd spot as my name started growing while I was still very "green" with my skills in the shop. A knife I made 5 years ago was well made, but there are MANY things that would be more refined now. So is that knife worth as much as if I made the same one today--- but better?

The fact I'm not taking orders right now plays a part in that... doesn't it?

A big improvement (IMHO) is that I have learned more how to make the knives look the way I have always wanted them to... rather than how my skills/knowledge allowed me to.

I feel like I'm just now really learning how to make a knife have really smooth flowing lines AS WELL as have super, OCD driven, clean execution.

There are 3 guys around here Peter, Roger, Danbo (right off the top of my head) that could tell you about buying and later selling my work. I don't think any of them ruined anything for me. In fact, if anything they drew more interest as they got the knives in front of people that I never did. I'd say they helped my secondary market.

However.... just like at work, I am not paid to think :p
 
David Schott said:
I always wonder who are the big players in the secondary market. Are the same collectors comissioning pieces those that are scowering the secondary market? Surely some collectors value their input into the design process more than the simple fact of owning a knife by a particular maker. Is the primary custom knife market one of getting knives created that fit exact wants while the secondary knife market is more of a "looking for an investment knife at a low price?"

I do more selling in the secondary market than buying.

I would define "primary market" as the market by which one buys new straight from the maker. Actually buying from the maker can be one of the best investments as there are makers such as Jerry Fisk and Tim Hancock (just to name a couple) whose knives can be sold for an instant profit.

I guess the question is: other than a short list of top makers in the world, I would assume most knives lose some value in the secondary market unless that have been stored under glass. Given this fact, are the dropped prices more a sign of the loss of value of having input and a relationship with the maker? If not, why do the prices drop when knives are basically in as-delivered condition?
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I'm not sure most knives lose value in the secondary market. I make money on some and lose on some, but I do maintain a nice return on investment overall. I don't think that anyone that sells a decent quantity of knives will make money on every one, unless they are very lucky.

Because collectors will generally rather buy new and will pay more for new knives than older like knives. Don't know why. I buy most of my pieces new from maker, however if a special/significant older piece comes available I will buy it.
 
What we are looking at are multiple cycles in multiple locations with multiple influences that are all interconnected. I think it is really quite complicated and beyond the mathematical scope of most people. :)
 
Kevin Jones said:
I'm not sure most knives lose value in the secondary market. I make money on some and lose on some, but I do maintain a nice return on investment overall. I don't think that anyone that sells a decent quantity of knives will make money on every one, unless they are very lucky.

Because collectors will generally rather buy new and will pay more for new knives than older like knives. Don't know why. I buy most of my pieces new from maker, however if a special/significant older piece comes available I will buy it.
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Not sure I agree here. I buy probably 2/3 of my knives on the secondary market and 1/3 directly from makers. I seldom lose money. Make that almost never. It's my sense that the majority of collectors buy from the secondary market, though it might not appear that way to someone who is heavy into Bladeforums. It perhaps might be true with forged knives, but I am speaking here for higher end stock removals.

And perhaps I find advantage in the makers I collect. I can almost always, if disposed to do so, turn a knife around (one I buy direct from a maker) for an immediate profit, but generally tend not to.
 
I think that what this, to a large degree, boils down to is all the permutations and combinations of the various makers, their own secondary markets, all the combinations of various collectors and how they buy, how online dealers acquire from both the secondary market and from makers, etc, etc, etc. I think Tai Goo got it right about all these things really being why there are so many answers to just a few questions. But it is still all market driven, with the market tripod being maker, collector and dealer.

EDIT: I hate to admit I agree with Tai Goo, though. I am afraid he will start thinking again.
 
betzner said:
Not sure I agree here. I buy probably 2/3 of my knives on the secondary market and 1/3 directly from makers. I seldom lose money. Make that almost never. It's my sense that the majority of collectors buy from the secondary market, though it might not appear that way to someone who is heavy into Bladeforums. It perhaps might be true with forged knives, but I am speaking here for higher end stock removals.

And perhaps I find advantage in the makers I collect. I can almost always, if disposed to do so, turn a knife around (one I buy direct from a maker) for an immediate profit, but generally tend not to.
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Bob, not sure what you don't agree with.
I'm just replying to David Schott's assumption that MOST knives lose value on the secondary market. As I don't think most do, but obviously don't know for sure.

You are right though as Joss's recent poll showed an overwhelming number of members here purchased direct from maker as opposed to the secondary market. Again, not sure what the results would be for the whole customs industry.
 
Kevin - Yep, I sure was not clear on what I disagreed with. It was the comment, which you just spoke to, of most collectors buying new - and I mistakenly read that to mean "from maker", when it could easily have meant "new from dealer" as well. My point was only that I am of the opinion that a majority of knife sales in the custom market tend to be not between buyer and maker, but in the secondary market, whether it involves a new or pre-owned knife. I think it was a matter of reading something into your comments that actually was not even there.

EDIT: I love that term, pre-owned. Perhaps some inventive maker will open a "Certified Pre-Owned" online site, LOL
 
NickWheeler said:
There are 3 guys around here Peter, Roger, Danbo (right off the top of my head) that could tell you about buying and later selling my work. I don't think any of them ruined anything for me. In fact, if anything they drew more interest as they got the knives in front of people that I never did. I'd say they helped my secondary market.
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Nick Wheeler is a bizarre aberation in the space and time continum. :eek:

He started making beautiflu knives with MS quality fit and finish about twenty minutes after he left his mother's womb. The insane amount time that he devotes to each knife means that his annual production is in the single digets. If you have one, you are a lucky SOB, imho. BUT imho, the words WHEELER and MARKET should never be used in the same sentence.

P
 
ptgdvc said:
Nick Wheeler is a bizarre aberation in the space and time continum. :eek:

He started making beautiflu knives with MS quality fit and finish about twenty minutes after he left his mother's womb. The insane amount time that he devotes to each knife means that his annual production is in the single didgets. If you have one, you are a lucky SOB, imho. BUT imho, the words WHEELER and MARKET should never be used in the same sentence.

P
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LOL
The solution to get from single digit to multiple digit numbers is very simple: use binary notation :D Just imagine: wow, you made 101 knives this year???
 
betzner said:
I think that what this, to a large degree, boils down to is all the permutations and combinations of the various makers, their own secondary markets, all the combinations of various collectors and how they buy, how online dealers acquire from both the secondary market and from makers, etc, etc, etc. I think Tai Goo got it right about all these things really being why there are so many answers to just a few questions. But it is still all market driven, with the market tripod being maker, collector and dealer.

EDIT: I hate to admit I agree with Tai Goo, though. I am afraid he will start thinking again.
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Are you saying,... "stop making sense"? :D

If so, I totally agree! :)
 
I collected a great many things over the years, and for me it was always the enjoyment of collecting that was important. I never cared if I made a profit on the stuff I collected, and I still don't. The fact is, I'm one of those folks that doesn't turn over a portion of my collection to finance future purchases. Early in my custom knife collecting days I sold a few of the knives I purchased, but have not sold one in the last three or four years.

I still purchase knives that I know will have a good chance of dropping in value, just because I like them. I purchase knives from new makers that don't have a proven track record, just because I like what I have seen from them. Though I ususally do think a little about the future resale value of the knives I add to my collection, if I were to start thinking of my collection as an investment, that would choke the enjoyment right out of knife collecting for me.

In the end it really doesn't matter though, because you aren't likely to see the knives from my collection, on the secondary market. I suppose that after I die they may well end up being sold. Hopefully the person selling them will be able to get a decent amount for them, but if not, at least I had fun. If treating your collection as an investment adds to your enjoyment, that's great. It most certainly wouldn't add anything to my enjoyment, and that's why I collect.

I will pay more for a current knife from a maker than for an older one, because it is my belief that the current one should be better made. If a maker has improved his/her knifemaking skills over the years, then I don't want one one his/her knives. Why would I want to pay the same money for a knife that was made five years ago, and almost certainly not made as well as one that the maker would make for me now, as I would for a current knife? It just doesn't make any sense to me, unless the knife has historical value. I don't collect knves for their historical importance, so that doesn't factor into my purchasing decision.

It is true that an object is only worth what someone is willing to pay for it. That is not BS. You can as whatever you want for a knife. In the end, if someone isn't willing to pay that price, then the knife is going back into storage. You can ask whatever you want, but someone has to be willing to to pay that price, or there isn't going to be a sale. If you purchase a knife for $1000.00, and that makers knives have not held up well in the secondary market, you can ask a thousand dollars for it if you want to, but it isn't going to sell, unless you find someone that doesn't have a clue that you can take advantage of.
 
I'm multifaceted,... and a "borderline" mathematical genius! :D

HEY! .... Enough about me, let's heAR WHAT YOU GUYS THINK...
 
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