Benchmade Inflation

[SaintlyBrees]

The general consensus here seems to be the reason BM changed their pricing rules was in order to protect the uncompetitive dealers who were charging full MSRP and I'm just wondering if anyone has any information from any of the dealers they've talked to about this as BM's "Statement" was completely absent of any information.

Reason I ask is what was passed on one of the authorized dealers FB page (Cutlery Shoppe) is that the new pricing policy or enforcement of MAP pricing is due to brand management, BM trying to bring up the value of the brand by raising prices to the end user.

Maybe it's both? I don't know and why I'm asking what people have heard and from where.

Although I don't think the reason really matters that much at this point because the end result is the same, we the end user pay substantially more for the same product with no improvement in quality or materials.

Just curious what people have heard.

I can't speak to BM's motivations here, but in general MAP accomplishes two things:

1. It raises perceived brand value. People often think that if something is more expensive that it is also better.
2. It pushes more business to smaller dealers. This helps the mfg because in most cases smaller dealers pay more for their product than larger dealers (quantity discounting). End result - more money in the mfgs pocket.

Again, I don't know what BM's motivation is, but it is likely that these 2 results of MAP are part of their decision IMHO. Some companies have been successful with this business model & some have not. It remains to be seen what happens with BM. But the common second step in MAP is a gradual increase in price to the dealer so we may not have seen the last of this. Look at the pricing of the new 586-141. It is the first new product since the decision by BM to force dealers to adhere to MAP and the price is (IMHO) extreme. I think we'll see more and more of this and possibly even an increase (eventually) in existing product lines.

All speculation on my part, of course.

 

[fetzer85]

.A BM940 is a BM940. I paid $117 way back when (2008 or 2009) and that same technology is now expected to bring $178? A 34% increase in about 5 years. It remains to be seen if Benchmade remain 'popular' at these new prices.

Not trying to be a know-it-all but that's actually a 52% increase by my math. Just furthers the point though! :thumbup:

 

[PaulTR]

I love Benchmade (I currently own more Benchmades than any other brand, in fact), but this new pricing has rubbed me the wrong way. I like to see that I'm getting my hard-earned money's worth, and to be honest, I don't think Benchmade has anything over on anybody else at these new price points. In my eyes, Benchmade is losing touch with their customer base, from their (lately) mediocre designs to this whole pricing issue.

I'm just glad I picked up most of my favorite designs (710, 940, 707) at excellent prices already.

 

[RevDevil]

So, with this MAP in full effect, what will dealers do to keep their sales at sustainable levels (this brand only of course)? Offer gift cards? Nothing? I don't think this applies to the dealers out there that never offered discount codes. I'd imagine they sold normally, albeit slowly to folks that never knew about the coupon discounts. I'd even imagine some are possibly going to have a lot of "new old stock" in the coming months.

One other thought, I doubt many if any at all offered those codes on Benchmade knives specifically to get people with money on their sites.

 

[RetiredGuns]

So, with this MAP in full effect, what will dealers do to keep their sales at sustainable levels (this brand only of course)? Offer gift cards? Nothing? I don't think this applies to the dealers out there that never offered discount codes. I'd imagine they sold normally, albeit slowly to folks that never knew about the coupon discounts. I'd even imagine some are possibly going to have a lot of "new old stock" in the coming months.

One other thought, I doubt many if any at all offered those codes on Benchmade knives specifically to get people with money on their sites.

There are 2 local Brick & Mortars that carry Benchmade and both (try) to sell them at MSRP or a smidgeon under. They are literally dusty. This did work to my advantage on a 42 though as I got it at yester-year's MSRP and made a nice chunk re-selling. They still have a blue 940 KOTM I'm eyeballing. I have always stuck to the grips or a 940 so they have never gotten me to spend big bucks and I reckon I won't start.

 

[Clanton]

I heard about their prices going up so I went to my local outdoor store today and got 2 Grip's for $69.00ea.one black tanto and a orange drop point.

 

[RevDevil]

There are 2 local Brick & Mortars that carry Benchmade and both (try) to sell them at MSRP or a smidgeon under. They are literally dusty. This did work to my advantage on a 52 though as I got it at yester-year's MSRP and made a nice chunk re-selling. They still have a blue 940 KOTM I'm eyeballing. I have always stuck to the grips or a 940 so they have never gotten me to spend big bucks and I reckon I won't start.

It's funny, around here, the gun shops sell Benchmades over MSRP, usually $10-$20 over.

I heard about their prices going up so I went to my local outdoor store today and got 2 Grip's for $69.00ea.one black tanto and a orange drop point.

You are just sick....i like that in a person. :d

 

[JNewell]

I'm not trying to argue, I just am having a failure of belief on your point #1. I realize that my point of view is not the same as most other people's, but to me, I tend to think that if something is more expensive, it is just more expensive. If you're right, and you might be, it puts a new dimension on "sheeple."

I can't speak to BM's motivations here, but in general MAP accomplishes two things:

1. It raises perceived brand value. People often think that if something is more expensive that it is also better.
2. It pushes more business to smaller dealers. This helps the mfg because in most cases smaller dealers pay more for their product than larger dealers (quantity discounting). End result - more money in the mfgs pocket.

Again, I don't know what BM's motivation is, but it is likely that these 2 results of MAP are part of their decision IMHO. Some companies have been successful with this business model & some have not. It remains to be seen what happens with BM. But the common second step in MAP is a gradual increase in price to the dealer so we may not have seen the last of this. Look at the pricing of the new 586-141. It is the first new product since the decision by BM to force dealers to adhere to MAP and the price is (IMHO) extreme. I think we'll see more and more of this and possibly even an increase (eventually) in existing product lines.

All speculation on my part, of course.

 

[RetiredGuns]

It's funny, around here, the gun shops sell Benchmades over MSRP, usually $10-$20 over.

To finish my BM42 story, I got the first one for $200. I went back to the store a few weeks later and he got another in and priced it at $700! He may have decoded to look online and then double the highest price he could find. It still sits in a shiny case and will for decades.. This dealer still has original Spyderco Wengers in the box.

 

[SaintlyBrees]

I'm not trying to argue, I just am having a failure of belief on your point #1. I realize that my point of view is not the same as most other people's, but to me, I tend to think that if something is more expensive, it is just more expensive. If you're right, and you might be, it puts a new dimension on "sheeple."

No problem. It is JMO after all.

But I'll give you a simple, close-to-home example of that concept. Wife makes beautiful leather purses by hand (no assembly - from scratch) patterned with hand sewn semi-precious stones in some cases. She is good and her work is beautiful. Originally, it was a hobby but she had so many hanging around the house that she decided to start selling just to fund her hobby and have something to do with the purses when complete. She just couldn't keep 'em all.

Anyway, she started off by pricing them low enough to cover her costs and make a very small profit. She only sold a couple of them. We raised the price by more than double and she can't meet the demand. Anecdotal, of course, but first hand experience. People are funny.

 

[Catrepair]

For me , it's simple. As people have stated everything is going up in cost. I got interested in higher end knives when ammo jumped up in price. Ammo didn't improve to justify the price jump, just supply and demand. Plenty of great knives to choose from, sorry Benchmade dealers. Hello Kai.

 

[FLymon]

Not trying to be a know-it-all but that's actually a 52% increase by my math. Just furthers the point though! :thumbup:

You are absolutely correct. I calculated profit margin instead of markup. Old habit

 

[RetiredGuns]

No problem. It is JMO after all.

But I'll give you a simple, close-to-home example of that concept. Wife makes beautiful leather purses by hand (no assembly - from scratch) patterned with hand sewn semi-precious stones in some cases. She is good and her work is beautiful. Originally, it was a hobby but she had so many hanging around the house that she decided to start selling just to fund her hobby and have something to do with the purses when complete. She just couldn't keep 'em all.

Anyway, she started off by pricing them low enough to cover her costs and make a very small profit. She only sold a couple of them. We raised the price by more than double and she can't meet the demand. Anecdotal, of course, but first hand experience. People are funny.

If Sebenzas were suddenly $150, every Tom, Dick & Hairy would have one and they would soon become a fragment of what they were. Does this relate to a Benchmade price increase, maybe not but true.

 

[leghog]

The general consensus here seems to be the reason BM changed their pricing rules was in order to protect the uncompetitive dealers who were charging full MSRP and I'm just wondering if anyone has any information from any of the dealers they've talked to about this as BM's "Statement" was completely absent of any information.

Reason I ask is what was passed on one of the authorized dealers FB page (Cutlery Shoppe) is that the new pricing policy or enforcement of MAP pricing is due to brand management, BM trying to bring up the value of the brand by raising prices to the end user.

Maybe it's both? I don't know and why I'm asking what people have heard and from where.

Although I don't think the reason really matters that much at this point because the end result is the same, we the end user pay substantially more for the same product with no improvement in quality or materials.

Just curious what people have heard.

Just what I posted earlier (#44) in this thread:

It's not an uncommon practice. All part of marketing and branding and building a market image -- ensuring a brand retains "value" and cachet. Rolex has been at it for decades. Retail enforcement and distribution enforcement (no gray market) have been a very successful strategy for them. People now paying WAY more than their products should truly cost. People are paying for the brand and their perception of the brand's cachet. Non-watch aficionados (to whom most watches, even expensive ones, are sold) consider Rolex "THE" luxury watch company.

Only time will tell if the strategy will be a success for BM. I believe it will be. Perhaps not on the level it has been for Rolex but a success none the less.

 

[FLymon]

For me , it's simple. As people have stated everything is going up in cost. I got interested in higher end knives when ammo jumped up in price. Ammo didn't improve to justify the price jump, just supply and demand. Plenty of great knives to choose from, sorry Benchmade dealers. Hello Kai.

When demand outstrips supply prices go up, like the ammo.

Benchmade is, and has been for a few years now, arbitrarily raising prices by enforcing in steps a minimum selling price. That demand will drop is virtually guaranteed, assuming the supply remains constant.

Sometimes moving the price of an item 5% or even 10% up or down will not translate to more (or less) sales of the item. If for example $65 and $130 knives were to jump to $70 and $140 (7.5% increase), people would notice, but ultimately sales would likely be minimally impacted. A few purchases might be delayed, but not lost. Just like if they dropped to $60 and $120 people would also notice, but sales probably wouldn't jump much. A few purchases made sooner than had the prices remained constant, but probably not many 'created' sales.
But when $65 and $130 jump to $88 and $178 (35%), you can count on sales being affected, and not in a positive way. Unless of course selling fewer is the goal here. If so, I think they are on the right track.

 

[jac_solar]

Are you sure about the store and shelf space?

Amazon Warehouse Photos

Whoa, that's a lot of space. But I meant physical retail stores, where customers walk around in and pick out stuff.

 

[RevDevil]

To finish my BM52 story, I got the first one for $200. I went back to the store a few weeks later and he got another in and priced it at $700! He may have decoded to look online and then double the highest price he could find. It still sits in a shiny case and will for decades.. This dealer still has original Spyderco Wengers in the box.

Steve, that is insane and i got to see something similar locally. A gun shop that I used to be a customer of until i saw a clerk being completely rude to a female customer that asked some good basic questions for a first time buyer (great story BTW for another thread). They had some Benchmade 62s' in the case and I asked to see one. The guy obliges and starts telling me it's a limited edition, tactical butterfly knife, with a Titanium handle ($350 price tag). I said I did not realize the 62 came in a Ti handle. He was convinced or he was trying to BS me. I was polite and handed it back to him and told him it was too rich for my blood.

When demand outstrips supply prices go up, like the ammo.

Benchmade is, and has been for a few years now, arbitrarily raising prices by enforcing in steps a minimum selling price. That demand will drop is virtually guaranteed, assuming the supply remains constant.

Sometimes moving the price of an item 5% or even 10% up or down will not translate to more (or less) sales of the item. If for example $65 and $130 knives were to jump to $70 and $140 (7.5% increase), people would notice, but ultimately sales would likely be minimally impacted. A few purchases might be delayed, but not lost. Just like if they dropped to $60 and $120 people would also notice, but sales probably wouldn't jump much. A few purchases made sooner than had the prices remained constant, but probably not many 'created' sales.
But when $65 and $130 jump to $88 and $178 (35%), you can count on sales being affected, and not in a positive way. Unless of course selling fewer is the goal here. If so, I think they are on the right track.

This is an excellent post Stu. :thumbup:

 

[TheModernNeanderthal]

I went to a local knife shop the other day and they had a ZT 801 for $296.

I talked to them and they admitted they sold the first two they had so fast they ordered another two right away (they didn't admit to raising the price but it was obvious)

Oh and it was sitting in the cabinet with all the other ZT's priced at normal price lol

 

[JNewell]

Thanks - I actually don't have any trouble seeing that work there. Hand-work items tend to be more unique and harder to compare. Production knives are a little more commoditized, I think? You can more easily compare materials, features, etc., and when you do, I have doubts that Benchmade can move the marque up-market. But I'm wrong about things all day long.

No problem. It is JMO after all.

But I'll give you a simple, close-to-home example of that concept. Wife makes beautiful leather purses by hand (no assembly - from scratch) patterned with hand sewn semi-precious stones in some cases. She is good and her work is beautiful. Originally, it was a hobby but she had so many hanging around the house that she decided to start selling just to fund her hobby and have something to do with the purses when complete. She just couldn't keep 'em all.

Anyway, she started off by pricing them low enough to cover her costs and make a very small profit. She only sold a couple of them. We raised the price by more than double and she can't meet the demand. Anecdotal, of course, but first hand experience. People are funny.

 

[JNewell]

If Sebenzas were suddenly $150, every Tom, Dick & Hairy would have one and they would soon become a fragment of what they were. Does this relate to a Benchmade price increase, maybe not but true.

It's just N/A. If you tried to run off Sebenzas at that price point, it would no longer have one of they most important attributes of the Sebenza: the crazy-tight dimensions.