Cost Factors for making a knife from AEB-L

Col Defender

Col Defender

Joined
Nov 11, 2011
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Just finishing up my first stainless steel knife after it, and four others, came back from Peters Heat Treating. (Great to work with them BTW). I've been sitting here trying to figure out costs per knife and what to charge for them. With a 1084 knife I figure my out of pocket costs at about $40-$45 per blade for steel, wood, brass, belts and other stuff consumed, and a small allowance for depreciation. So depending on what I think my time is worth I would price the knife at $85 minimum though some have gone out for as much as $150. And I do understand that I am fairly new at all this and have improvements I need to make myself.

I got into the stainless steel venture under some pressure from a customer who is also a close relative and after much discussion with her we decided to go ahead with an order of three knives; eventually I sent 5 blades off to Peters. This time around, all the extra costs are being borne by the customer and I am OK with all that and so is the customer. But in the future, the add ons for what Peters will charge can amount (with shipping both ways) to $46 for one knife. Of course, costs per knife drop if I can send out several at one time which I will try to do. And stainless costs more than 1084.

Anyway, now the minimum price for a small knife, without add ons like G10 liners, jimping or any other extras goes from $85 to perhaps $125. And I am thinking I will not have many customers who will go for that. So I am not sure if I will pursue the stainless steel path unless the customer wants one really badly and will pay for all the extra cost.

Sorry for all the rambling...Any thoughts guys? Surely many of you have gone through this thought process.

Thanks
 
Col, I hear ya man. Same boat here. Lovin my carbon steels cause I can heat treat them at home. Stainless I have to send out. So I try to steer customers away from it. But when they want it, I simply explain to them the added cost for me to have them heat treated. Plus I usually don't keep SS on hand...but have to order it per knife order. If the customer is OK with paying for the $25 per blade plus shipping, I'll order the SS and add maybe $65 to the cost over a carbon steel. Haven't had anyone say "No" to that. If they want the SS, they will pay for it. But I don't want to add $$$ to the cost, simply because I can't currently do SS heat treat. So a kiln that will reach 2200F and LN/dewar is on the short list, so that my SS knives will be priced similar to my carbon knives.

Sorry....my rambling too. Nothing to add really except I totally get where you are coming from.
 
samuraistuart said:
Col, I hear ya man. Same boat here. Lovin my carbon steels cause I can heat treat them at home. Stainless I have to send out. So I try to steer customers away from it. But when they want it, I simply explain to them the added cost for me to have them heat treated. Plus I usually don't keep SS on hand...but have to order it per knife order. If the customer is OK with paying for the $25 per blade plus shipping, I'll order the SS and add maybe $65 to the cost over a carbon steel. Haven't had anyone say "No" to that. If they want the SS, they will pay for it. But I don't want to add $$$ to the cost, simply because I can't currently do SS heat treat. So a kiln that will reach 2200F and LN/dewar is on the short list, so that my SS knives will be priced similar to my carbon knives.

Sorry....my rambling too. Nothing to add really except I totally get where you are coming from.
Click to expand...

Thanks - glad to hear they don't say no. Do you ever require a deposit to cover HT costs?
 
Just profile out a few more and drop your heat treat costs down lower than what you can do them at home. I sent 15 AEB-L blades to Peter's about 6 months ago and with shipping both ways it came out to about $125(If memory serves without looking, they will do up to 20 blades in the same steel for $110). This including, HT, cryo, temper, straightening if needed and Rockwell tests. Time, fuel and frustration of even treating 1080/1084 at home is at least getting close to that price, likely more.

Good luck!
Chris
 
That is the option too, as Chris noted. Making 10 blades and getting that price break. I think the price point for 10 blades + at Peter's is just awesome for all they do. Unfortunately sometimes the time it takes (me anyway...using a file)...coming up with 10 blades is too long, especially when customer is waiting on an order. As I have going right now. An AEB-L chefs and an Elmax hunter. Gotta send em in tomorrow.

Colonel, I do indeed take a deposit. Usually half. Never a complaint....yet! I think it is very reasonable.
 
Many, many years ago, I had a customer come to me and almost beg for me to get some good stainless for knives. Fortunately, the only supplier I had just got into selling 440-C and had an established heat treater available with a vacuum furnace who was said never to refuse even the smallest of jobs. That was the end of the carbon steal for me except for Damascus which came for me much later. I'm sure my business increased because of that change possibly due to the climate in the area lived in.
Frank
 
AEB-L is cheap so I figure Ill just profile a bunch to make it more cost effective. Im sure Ill use them down the road. Im actually in that process right now. Ive got about 8 profiled and will do about 8 more before sending them out. Doing about 4 different profiles.

Jay
 
Antlerhog said:
AEB-L is cheap so I figure Ill just profile a bunch to make it more cost effective. Im sure Ill use them down the road. Im actually in that process right now. Ive got about 8 profiled and will do about 8 more before sending them out. Doing about 4 different profiles.

Jay
Click to expand...

Great idea but don't you need to profile and also grind at least the basic bevel before HT?
 
AEB-L is a great steel to grind after heat treat. You may even have to get a file out to stroke it thinking the heat treat may have been missed.
Frank
 
I just profile grind then HT . plates have more contact area for the quench. Its what works for me.
 
People often talk about the "high cost" being an issue in going to stainless steel.
From Aldo, a bar of 1/8" X 1.5" X 48" steel costs $18 in 1084, $28 in AEB-L, and $60 in CPM-154CM, ands $80 in CPM-S35VN. ( plus very reasonable shipping)
One would normally get five or six kitchen knives from that.
That makes the steel cost in a 1084 knife around $3-4, AEB-L $5-6, CPM-154CM $10-12, and $13-15 in S35VN.
The difference per knife between the "high cost" and "low cost" steel is $10.
So, if you make a carbon steel knife for $45, it should cost $2-10 bucks more to do the same knife in stainless.
The stainless knife will surely bring significantly more than the extra $2-10 cost.



I can get 150% to 200% the price for a CPM-S35VN kitchen knife than one in 1084........just for an extra $10 investment.

The single biggest way to cut the per knife cost down is sending them out for HT in batches.....it really lowers the cost per knife. Including shipping, it could cost $50 to HT one knife, it costs $10 per blade in batches of 10, and $5 per blade in batches of 20 (done in groups of same HT range steels). In batches of 100, small AEB-L knives are about $2 each to HT....including shipping. I use Peter's.

The other BIG savings in sending out for HT is that instead of spending many hours doing HT, you are making knives to sell. I haven't done any cost analysis on it, but I would bet it ups the profit per knife 10%.
 
Col Defender said:
Great idea but don't you need to profile and also grind at least the basic bevel before HT?
Click to expand...

I had a couple makers tell me to just go ahead and profile, drill, and send out for heat treat and grind bevels afterwards. This works better for me because I have a bad habit of taking my bevels too far and thin to much pre heat treat. Just gotta be careful not to over heat during grinding after HT. Fresh belts, bare hands, and lots of dunks in the bucket but grinding prior to HT I make mistakes too fast.

Jay
 
Stacy E. Apelt - Bladesmith said:
People often talk about the "high cost" being an issue in going to stainless steel.
From Aldo, a bar of 1/8" X 1.5" X 48" steel costs $18 in 1084, $28 in AEB-L, and $60 in CPM-154CM, ands $80 in CPM-S35VN. ( plus very reasonable shipping)
One would normally get five or six kitchen knives from that.
That makes the steel cost in a 1084 knife around $3-4, AEB-L $5-6, CPM-154CM $10-12, and $13-15 in S35VN.
The difference per knife between the "high cost" and "low cost" steel is $10.
So, if you make a carbon steel knife for $45, it should cost $2-10 bucks more to do the same knife in stainless.
The stainless knife will surely bring significantly more than the extra $2-10 cost.



I can get 150% to 200% the price for a CPM-S35VN kitchen knife than one in 1084........just for an extra $10 investment.

The single biggest way to cut the per knife cost down is sending them out for HT in batches.....it really lowers the cost per knife. Including shipping, it could cost $50 to HT one knife, it costs $10 per blade in batches of 10, and $5 per blade in batches of 20 (done in groups of same HT range steels). In batches of 100, small AEB-L knives are about $2 each to HT....including shipping. I use Peter's.

The other BIG savings in sending out for HT is that instead of spending many hours doing HT, you are making knives to sell. I haven't done any cost analysis on it, but I would bet it ups the profit per knife 10%.
Click to expand...


Great post and breakdown Stacy!

Jay
 
Yes, Stacy, that really showed the difference in costs one from the other! Fact not fiction or guessing.
Frank
 
In speaking with Dave Ferry aka Horsewright, he said a few years ago he did take the time to break it down for a cost analysis on a home HT vs. Peter's. He said it was costing him about $15 a blade to heat treat his own. He told it made it a really simple decision for him being as most of the batches he sends are 40+.

Chris
 
I'll go ahead and throw my $.02 in, though it mostly mirrors what others have already said.

Before I do though, I have to ask about your cost analysis for high carbon blades.... are you sure you're figuring that correctly? If I had to guess, I say my cost per basic 1095 fixed blade with a kydex sheath was closer to half of that. Granted, I normally get a few knives per belt, and maybe I'm buying larger sheets of handle and sheath material. I also tend to "batch" things, so that I'm not heat treating just one or two knives at a time.

At any rate, I've done a handful of knives in AEB-L, and for me the cost difference is next to negligible for what a carbon blade costs me. Like I said though, I'm normally batching blades, and if I'm sending an order to Peter's, it's going to have a minimum of 20 blades. A medium sized priority shipping box cost the same with 1 blade as it does with 20 or 30 (as long as they fit).
Final price on the batch of AEB-L I did was only a little more than what I normally get for 1095.

Like others have said: Send as many as you can at one time. The more blades you send, the cheaper t12he price per blade. To a small extent, this goes the same for buying the steel. If you buy 8 feet of steel, it will normally cost less per inch than if you only bought 8 inches. (shipping cost definitely plays a role here too).
Same goes for handle materials, belts, hardware, etc.... It's all about economy of scale. Generally the more you can either purchase or produce of the something, the cheaper each unit will end up being.

Stacy also brought up an excellent point: Stainless blades will typically command a higher price than a similarly priced carbon steel blade, especially if it's a stainless of known quality and a good reputation. I'd say that AEB-L definitely falls into that category.
 
On my cost analysis of $15 per blade, that was not done by me but by a guy that can make numbers stand up and do tricks. He watched me heat treat a batch of knives and caculated in time, consumables etc and then worked on averages coming up with $15 a blade based on the size of batches I normally work on. Now it should be noted that this was a perfect world scenario too. While it included tempering in that figure, it did NOT include any warp chasing. Another reason I now send even my HC blades to Peter's. They come back absolutely straight, every blade, every time. In fact I even sent them two curved on purpose blades (hoof knives) and one of them came back straight, now thats good (and pretty darn funny too). I only needed one hoof knife anyway.
 
I send batches of my stainless steel blades in 20 plus batches to Paul Bos HTing at Buck knives. It cost me, around $7.00 a blade.
I grind after Heat Treat.

I spend my time, Grinding, handling and designing my knives.:)
 
IIRC, the flat rate from Peters gets you up to 20 blades and then it is like $2 or so per every blade after that. Those guys have done us a great service by seriously, (and a mean SERIOUSLY as far as working out the best HT mehthods for blade steels and applications that they gear can reasonably give them) getting into what most companies of their type might consider to be a niche business and possibly a marginally profitable one not worth their time and effort.
 
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