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Being a Benchmade dealer takes $10k???
- Thread starter speedfan
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Well, I'm not really sure how production knife business works,
But the way it is done sometimes, is that a distributor would buy a lot of knives from different companies at a price given to distributor, which is a lot less then what any of us would pay. The distributer has to order massive amounts of blades. The small mom & pop shops or online retailers go to distributors set up a contract which locks a certain price on the knifes. The distributor carries as many different knives as possible so small mom & pop shops don't have to fork out large $$$ for single knife types. Basically this creates a system where a small retailer can go to one place the distributer and buy all he needs at a discounted price, then go and sell it, for the suggested MSRP, or the current market value. And one distributor maybe supplying hundreds of businesses and therefore he might be able to afford to fork out a lot more then 10k.
Marvel at how spectacularly I have failed to present my thoughts. I probably missed a couple of steps or words here, but I work with this kind of system and its really business as usual for me, so I may omited some important points, sorry.
But the way it is done sometimes, is that a distributor would buy a lot of knives from different companies at a price given to distributor, which is a lot less then what any of us would pay. The distributer has to order massive amounts of blades. The small mom & pop shops or online retailers go to distributors set up a contract which locks a certain price on the knifes. The distributor carries as many different knives as possible so small mom & pop shops don't have to fork out large $$$ for single knife types. Basically this creates a system where a small retailer can go to one place the distributer and buy all he needs at a discounted price, then go and sell it, for the suggested MSRP, or the current market value. And one distributor maybe supplying hundreds of businesses and therefore he might be able to afford to fork out a lot more then 10k.
Marvel at how spectacularly I have failed to present my thoughts. I probably missed a couple of steps or words here, but I work with this kind of system and its really business as usual for me, so I may omited some important points, sorry.
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Benchmade has decided to pricefix their products at inflated values. Pretty simple to just not buy them.
It doesn't sound like this is a distributor situation, though that's a very good point, I wonder why knives don't use distributors (if they in fact don't).
I also think Benchmade is shooting themselves in the foot with this MAP thing. It makes people think Benchmades are way too pricey. Is anybody actually paying MAP?
Sony tells what price to sell their electronics to retailers, so that means you can go to best buy or any other store and the price will probably be the same for a TV or sound system. Worked out well for them so far.
At one point my sister ex-husband received 2 identical sound systems made by sony as gift. So he decided to sell one on eBay. Almost immediately he received several letterer from other sellers who were making sure he is not a dealer or distributer, and some of those letters were pretty hostile too.
Every distributer we deal with has a price list, the longer you are in business and the higher your volume is the higher the discount you get from the distributer. It may vary slightly brand by brand. But there are some brands that are non discountable. Which means that a new guy or us will be able to sell the product at the same price. This strategy is more often employed by the high end manufacturers.
At one point my sister ex-husband received 2 identical sound systems made by sony as gift. So he decided to sell one on eBay. Almost immediately he received several letterer from other sellers who were making sure he is not a dealer or distributer, and some of those letters were pretty hostile too.
Every distributer we deal with has a price list, the longer you are in business and the higher your volume is the higher the discount you get from the distributer. It may vary slightly brand by brand. But there are some brands that are non discountable. Which means that a new guy or us will be able to sell the product at the same price. This strategy is more often employed by the high end manufacturers.
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I guess it just seems like they've miscalculated, as I've yet to find a dealer who is unwilling to go below the MAP if you're willing to ask for a combo deal or something like that. I think they expect their dealers to want a larger profit margin than they really do.
Knife companies do use distributors. Many stores buy their knives wholesale through a distributor. Benchmade decided to cut out distributors and everyone that sells their knives have to be an authorized dealer that buys directly from Benchmade. This took effect at the beginning of the year and had lots of people upset, and they are still upset. The MAP pricing was part of the restructuring and getting rid of the middleman (distributors).
Yeah thats how my local dealer complained to me lol. He said he has to order all his Benchmades directly from Benchmade, and he gets everything else from his two main distributors.
Now one thing that is fishy about that, is he said the Benchmade 710 I ordered was on backorder, and I find it highly doubtful that Benchmade is out of their flagship model, especially since it isn't disco. Big part of why I cancelled my order and just ordered it from Knifeworks instead.
Ahhh, so this is what the dealer must have meant (given what 2brothers said about the 90s), that he used to be able to get from a distributor and now he can't hence the $10k.
I can understand cutting out the middleman (with modern technology it is a lot easier to handle your own order-taking and shipping), but not when in doing so you cut off a bunch of your dealers rather than utilize that technology to supply to them directly.
I think I'm going to write BM a letter....
It's listed as "reserve yours" on the BM website, which makes me think it really is on backorder. Part of the problem with requiring $10k from every dealer is that there are probably 710s on shelves throughout the country, but none available for special order by a dealer near you who doesn't have one in stock.
Still, that sucks, but at least I am getting my knife somewhere I guess.- Joined
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Can a local dealer sell a Benchmade knife for the same price as Wal-mart.com---Cabelas.com--Bass pro.com--Amazon.com. If they have to buy $10,000 to place an order, can they turn their iventory, and stock all the knives to compete with the large retailers? Can they just stock a few and buy from a wholeseller and have it in a day or 2?
I doubt that number very much. Think about it. If Benchmade was able to require a store to have 10K in inventory why not many other manufactures. So for a store would then need to have a very large amount of cash tied up in inventory to satisfy all the manufacturers.
My guess is that Benchmade might require the store to have annual sales of $10K in Benchmade products. Doing this would cut down on all sorts of transaction costs for Benchmade
Thats how we do it, there are 4 people working, we keep stock but only of the most popular models. The rest is ordered in the morning and gets to us in afternoon, basically it is shipped the next day after its ordered. matter of fact you can usually do it a lot easier. You can use the distributer to drop ship for you, he charges about 2 bucks per item shipped + the shipping cost. You seriously don't need anything but computer and internet to to sell. But in order to get the best price you have to have the high turn around and good reputation among your potential clientèle. So it comes down to the customer service vs. big retailers. If you ship and pack yourself then its a lot cheaper then $2/item, and you can hire a college kid, to ship for you part time for about $9/hour and you'd be out at most about $50/day. Usually you'd sell like 100 items daily so there you go, you can also make them answer the phones and do customer service.
Bla-bla-bla, you probably bored....either way it doesn't really effect the small business.
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