Cost gap-USA vs. Offshore

[Zodiac Bladeworks]

I would be exceptionally surprised if the cost of manufacturing wasn't the single largest cost associated with making these knives and setting the price. More specifically, labor costs are inevitably your single largest expense. I'm genuinely curious why you think that's not the case.

Given most of these knives are CNC made, including the grinding which can be done in batches with single setups, you would be surprized. I priced out making knives at the level of the opening post and if made correctly (I belive Reate do) then the COGS would come out to around $80 in most Asian countries. This includes labor and materials.

Someone is making good $$$

 

[Insipid Moniker]

Given most of these knives are CNC made, including the grinding which can be done in batches with single setups, you would be surprized. I priced out making knives at the level of the opening post and if made correctly (I belive Reate do) then the COGS would come out to around $80 in most Asian countries. This includes labor and materials.

Someone is making good $$$

I stand corrected! I would love to see the data and process you used to get your final result.

 

[Zodiac Bladeworks]

I stand corrected! I would love to see the data and process you used to get your final result.

Happy to share, but probably best as a private message. Can we do that here?

 

[Insipid Moniker]

Happy to share, but probably best as a private message. Can we do that here?

Not without paid membership.

 

[Zodiac Bladeworks]

Not without paid membership.

I will sort that out and msg you

 

[sharp_edge]

What happens when you need warranty work on all these Chinese made knives?

I don't know about other manufacturers but I used Reate warranty once a couple of years ago. I deformed the pivot head of the knife and couldn't get it out myself. Shipped it to their California office. It was fixed within one week and they also included a spare set of the pivot screws.

 

[OrangeBlueOrangeBlue]

What happens when you need warranty work on all these Chinese made knives?

In the case of sharp by design, Brian takes care of things. I don't know about others who use Chinese oems, though. I hear civivi/we take care of people. Artisan not so much. The others...? Which is why I stick with civivi if I buy a cheaper Chinese knife. Not a problem yet.

Service and support for most of the collaboration knives are handled by the designer. If you have an issue with, for example, a Reate made Liong Mah knife, it goes to Liong's shop. That's the case for most of the designers; Pena, Nadeau, Begg, etc.

In the case of manufacturer branded knives, it's a little hit or miss. Kizer, Reate WE/CIVIVI all maintain Stateside points of service. I don't know about some of the other brands. I've gotten replacement hardware/clips for some of my China-made knives as easy as if I was dealing with Benchmade.

I'm certain that some of the lesser known names may be a problem for service, but the same could be said for some US based manufacturers. For the most part, the more common brands support the industry and are engaged in knife shows and industry events all over the world.

I don't know about other manufacturers but I used Reate warranty once a couple of years ago. I deformed the pivot head of the knife and couldn't get it out myself. Shipped it to their California office. It was fixed within one week and they also included a spare set of the pivot screws.

As others have noted, the US-based designers who use Chinese OEMs typically handle their own warranty issues. WE/Civivi and Reate have dedicated US warranty. I rounded a pivot screw in a Civivi and all I had to do was send them an email with a picture of the screw and they mailed me a new one.

 

[rhino]

All of those high paid Chinese workers are driving up the price.

I don't know if you're joking or not, but I suspect that is part of the big picture for the higher end knives. Producing very high quality products on a consistent basis requires workers where well trained, highly skilled, and properly motivated. That's going to cost a lot more than, well, the slave labor that produces the lesser quality goods.

 

[ferider]

I don't know if you're joking or not, but I suspect that is part of the big picture for the higher end knives. Producing very high quality products on a consistent basis requires workers where well trained, highly skilled, and properly motivated. That's going to cost a lot more than, well, the slave labor that produces the lesser quality goods.

There is still a >2x salary gap, when talking about mainland China compared to the US. Wrt. quality manufacturing making a knife is trivial compared to - say - making a cell phone for a US company. Google, for instance, "Foxconn suicides" to learn about motivation of normal employees (in contrast to existing true slave labor). That being said, there are also highly stressed and exploited employees in some US companies. All I'm saying is it's not black and white, except for the avg. salary gap.

Roland.

 

[ferider]

Given most of these knives are CNC made, including the grinding which can be done in batches with single setups, you would be surprized. I priced out making knives at the level of the opening post and if made correctly (I belive Reate do) then the COGS would come out to around $80 in most Asian countries. This includes labor and materials.

Someone is making good $$$

I'm guessing you are in the ballpark, if you exclude marketing & travel (usually part of COGS), and your own/management salary

 

[Zodiac Bladeworks]

I'm guessing you are in the ballpark, if you exclude marketing & travel (usually part of COGS), and your own/management salary

That would fall under overhead COGS normally only covers direct labor and materials with the labor rate inclusive of a machine surcharge

Obviously hand finishing and inserts would push up the price, but this was based on M390 with a 15 thou blade around 3.5" and Ti framelock made to the levels in the opening post using Thai labor rates (slightly below China's). Note this is cost price and would be wholesaled around $120 to cover overheads

 

[ferider]

That would fall under overhead COGS normally only covers direct labor and materials with the labor rate inclusive of a machine surcharge

Not when I ran a company. Wait until you hire an accountant Then again, it does depend on your accounting standards, etc.

 

[Zodiac Bladeworks]

Not when I ran a company. Wait until you hire an accountant Then again, it does depend on your accounting standards, etc.

True, there are different standards used around the world, for instance in automotive they include development costs in GAAP

 

[Chefget]

In the restaurant industry, COGS is the purchase cost of the goods sold.

Labor is labor; rent, g&e, etc are overhead

COGS and labor are sometimes combined, referred to as the 'Prime' cost

 

[SpaceGhost88]

Judging by the “highest quality” production knife made probably more often than you’d think.

And not just warranty from defective workmanship but just things owners mess up as well, or a pocket clip getting caught on something and needing replaced. These things all happen very often.

I’d imagine warranty work is non existent with a Reate or a WE or whatever other chinesium knife you own. At least with USA made products you know you’ll be able to get your issue fixed. For people that actually use their knives and not just sit around fidgeting with ocd all day long warranty really matters.

Incorrect. As seen in the quotes below, most of the higher end Chinese OEMs have US Warranty Centers. Parts like clips or pivots are easily replaced... even by the most inexperience of owners.

Many US Knife companies have not provided (or failed to provide) as good customer service or as high quality a product as most higher end Chinese OEM. Reate and WE being #1 & #2.

I don't know about other manufacturers but I used Reate warranty once a couple of years ago. I deformed the pivot head of the knife and couldn't get it out myself. Shipped it to their California office. It was fixed within one week and they also included a spare set of the pivot screws.

As others have noted, the US-based designers who use Chinese OEMs typically handle their own warranty issues. WE/Civivi and Reate have dedicated US warranty. I rounded a pivot screw in a Civivi and all I had to do was send them an email with a picture of the screw and they mailed me a new one.

Yep. And IMHE they ususally need less maintenance and care than most US made knives of equal or lesser value. I appreciate the sentiment of some in this thread that people like US made items, and to buy US made items, etc.

But facts are facts. Like with autos, most foreign makers produce a better quality knife, at or often times, for less money than a comparable US made knife of the same type and materials.

It is what it is.

 

[Bob Denman]

Perceived Quality, Political Climate, Warranty protocols,, How the workforce is compensated...
I just buy what I like, and let the "experts" argue...

 

[severedthumbs]

Incorrect. As seen in the quotes below, most of the higher end Chinese OEMs have US Warranty Centers. Parts like clips or pivots are easily replaced... even by the most inexperience of owners.

Many US Knife companies have not provided (or failed to provide) as good customer service or as high quality a product as most higher end Chinese OEM. Reate and WE being #1 & #2.





Yep. And IMHE they ususally need less maintenance and care than most US made knives of equal or lesser value. I appreciate the sentiment of some in this thread that people like US made items, and to buy US made items, etc.

But facts are facts. Like with autos, most foreign makers produce a better quality knife, at or often times, for less money than a comparable US made knife of the same type and materials.

It is what it is.

Incorrect. As seen in the quotes below, most of the higher end Chinese OEMs have US Warranty Centers. Parts like clips or pivots are easily replaced... even by the most inexperience of owners.

Many US Knife companies have not provided (or failed to provide) as good customer service or as high quality a product as most higher end Chinese OEM. Reate and WE being #1 & #2.





Yep. And IMHE they ususally need less maintenance and care than most US made knives of equal or lesser value. I appreciate the sentiment of some in this thread that people like US made items, and to buy US made items, etc.

But facts are facts. Like with autos, most foreign makers produce a better quality knife, at or often times, for less money than a comparable US made knife of the same type and materials.

It is what it is.

Incorrect. As seen in the quotes below, most of the higher end Chinese OEMs have US Warranty Centers. Parts like clips or pivots are easily replaced... even by the most inexperience of owners.

Many US Knife companies have not provided (or failed to provide) as good customer service or as high quality a product as most higher end Chinese OEM. Reate and WE being #1 & #2.





Yep. And IMHE they ususally need less maintenance and care than most US made knives of equal or lesser value. I appreciate the sentiment of some in this thread that people like US made items, and to buy US made items, etc.

But facts are facts.

These aren’t facts. These are nothing more than your very unqualified opinions. A few people commenting here that they got a screw or a maker warranties their Chinese made product isn’t a big enough sample to make these broad statements.
I have sent knives to Strider and CRK for warranty work. Strider put a brand new blade and all new hardware when I broke the blade prying with it. It cost me $25 for shipping and that was it. Took about 2 weeks. Sent a Sebenza to CRK for a bushing issue and it was resolved quickly at no cost. I can’t imagine and Chinese company offering a better warranty and service than either of these two American companies.

Chinese knives needing less maintenance , that’s just simply nonsense. Please show some actual proof of this.

I’d also like to see what happens when someone needs warranty work on one of these designer Chinese knives that have been out of procuring for a while and there are no more parts like a specific clip for example. I doubt the designer is going to crank up the cnc to make a one off part for you.

 

[Hackenslash]

These aren’t facts. These are nothing more than your very unqualified opinions. A few people commenting here that they got a screw or a maker warranties their Chinese made product isn’t a big enough sample to make these broad statements.
I have sent knives to Strider and CRK for warranty work. Strider put a brand new blade and all new hardware when I broke the blade prying with it. It cost me $25 for shipping and that was it. Took about 2 weeks. Sent a Sebenza to CRK for a bushing issue and it was resolved quickly at no cost. I can’t imagine and Chinese company offering a better warranty and service than either of these two American companies.

Chinese knives needing less maintenance , that’s just simply nonsense. Please show some actual proof of this.

I’d also like to see what happens when someone needs warranty work on one of these designer Chinese knives that have been out of procuring for a while and there are no more parts like a specific clip for example. I doubt the designer is going to crank up the cnc to make a one off part for you.

And your comments are likewise not facts, they’re opinions and experiences. We’re sharing experiences, just like you.

At the end of the day, it’s all a matter of experience. I’ve had Reate replace a blade for me, struggled with support on a Tabargan, paid for a replacement blade from Benchmade and had KAI tell me they couldn’t supply a piece of hardware because a knife was discontinued. These are all possible service/support outcomes regardless of POO.

The single fact here is that support for a knife has nothing to do with geography. It’s about effort and sometimes luck of the draw.

 

[NG VI]

I just don't understand what kind of warranty work a titanium framelock is supposed to need during the normal knife user's lifetime. Do you only have one knife and can't wait a few weeks for a warranty trip in the event you manage to snap another blade using your blade as a bar?

As noted by others, it's easy for even an inexperienced user to replace a clip or pivot or maybe a bearing race without more than an encouraging email and a packet of parts. I don't know why you think that US service centers backed up by good personal experiences from your fellow knife enthusiasts is some kind of lie or questionable statement.

 

[severedthumbs]

Incorrect. As seen in the quotes below, most of the higher end Chinese OEMs have US Warranty Centers. Parts like clips or pivots are easily replaced... even by the most inexperience of owners.

Many US Knife companies have not provided (or failed to provide) as good customer service or as high quality a product as most higher end Chinese OEM. Reate and WE being #1 & #2.





Yep. And IMHE they ususally need less maintenance and care than most US made knives of equal or lesser value. I appreciate the sentiment of some in this thread that people like US made items, and to buy US made items, etc.

But facts are facts. Like with autos, most foreign makers produce a better quality knife, at or often times, for less money than a comparable US made knife of the same type and materials.

It is what it is.

Incorrect. As seen in the quotes below, most of the higher end Chinese OEMs have US Warranty Centers. Parts like clips or pivots are easily replaced... even by the most inexperience of owners.

Many US Knife companies have not provided (or failed to provide) as good customer service or as high quality a product as most higher end Chinese OEM. Reate and WE being #1 & #2.





Yep. And IMHE they ususally need less maintenance and care than most US made knives of equal or lesser value. I appreciate the sentiment of some in this thread that people like US made items, and to buy US made items, etc.

But facts are facts. Like with autos, most foreign makers produce a better quality knife, at or often times, for less money than a comparable US made knife of the same type and materials.

It is what it is.

Incorrect. As seen in the quotes below, most of the higher end Chinese OEMs have US Warranty Centers. Parts like clips or pivots are easily replaced... even by the most inexperience of owners.

Many US Knife companies have not provided (or failed to provide) as good customer service or as high quality a product as most higher end Chinese OEM. Reate and WE being #1 & #2.





Yep. And IMHE they ususally need less maintenance and care than most US made knives of equal or lesser value. I appreciate the sentiment of some in this thread that people like US made items, and to buy US made items, etc.

But facts are facts.

These aren’t facts. These are your very unqualified opinions. A few people commenting here that they got a screw or a maker warranties their Chinese made product isn’t a big enough sample to make these broad statements.
I have sent knives to Strider and CRK for warranty work. Strider put a brand new blade and all new hardware when I broke the blade prying with it. It cost me $25 for shipping and that was it. Took about 2 weeks. Sent a Sebenza to CRK for a bushing issue and it was resolved quickly at no cost. I can’t imagine and Chinese company offering a better warranty and service than either of these two American companies.

And Chinese knives needing less maintenance , that’s just simply nonsense. Please show some actual proof of this.
And I’d also like to see what happens when someone needs warranty work on one of these designer Chinese knives that have been out of procuring for a while and there are no more parts like a specific clip for example. I doubt the designer is going to crank up the cnc to make a one off part for you.

And your comments are likewise not facts, they’re opinions and experiences. We’re sharing experiences, just like you.

At the end of the day, it’s all a matter of experience. I’ve had Reate replace a blade for me, struggled with support on a Tabargan, paid for a replacement blade from Benchmade and had KAI tell me they couldn’t supply a piece of hardware because a knife was discontinued. These are all possible service/support outcomes regardless of POO.

The single fact here is that support for a knife has nothing to do with geography. It’s about effort and sometimes luck of the draw.

Correct it’s my opinion but I’m also not claiming any to be superior to the other. Only offering my opinion and my observations of the last 20+ years that I’ve been active in the community. I don’t buy Benchmade or Kai products so I offered no input on them. But I’ve seen both good and questionable service from both over the years.
I’d still not buy a user that not American made just because if I do need that service it’s just easier to not ship a knife out of the country.