Cost to make knife: Paramilitary II

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Not a flame but really curious. Only picking on para II because it is a mega-seller, requires almost no marketing (we market here, on YouTube, word of mouth, and so on), is relatively simple, had modest development costs (this isn't a useless, but expensive, pharmaceutical taking years to "discover."), for the most part a smaller Military and better para 1. And a good knife. And I like Spyderco.

I just bought a camo, black, 2012. It grows on you :-). Simple and it works. But...

direct costs of manufacture (made in high quantity):

G-10 slabs (good quality, thick): $5
S30V (3oz?) $5
Lock $4
Washers $1
Screws/Clip $1
Other $1
Labor (they rush 'em out) $3
Advertising $1
$21

Sure there is designing a model (the Military --- just smaller and the Para 1 --- designing sound like fun to me in any case!!!). The owners, or at least Eric, evidently designed much of this and a second or third employee designed the rest. All parts from the U.S., well, who cares if they are or not? (is it as good as Taiwan or not? If not, don't tell me about labor costs and, perhaps, using Chinese kids to make like Apple Computers). Swiss watches are primarily only part made in Switzerland anymore anyway.

Average price for informed consumer --- maybe $120. Numbers made --- the factory is supposedly at full throttle --- one reason for QC not being perfect. Lefty version not available.

Much higher than $21? Well, what about the Tenacious? Cost to maufacture of $20 vs $80 --- I think not and if so, make all knives in Taiwan --- they're usually better made anyway. No, the steel in either does not cost $50. Better G-10 - $.50 cents. Better screws - $25 cents at best. Why not do S30V in Tenacious --- because of price and the Sage 1 is at about $100. A Tenacious at $50 with S30V --- sign me up :thumbup: (To their credit, they offer the Tenacious line.) 20% better for 3x the price? Maybe, and maybe worth it.

I think the above is high. A guess, sure. But I remember asking about a Rolex Sub. Educated guess was $400 for a then $3,500 watch or so. To their credit, the owners and loaded and give much to charity.

Once again, I admire the company, the product, and love Spyderco. But the prices for a high volume product? And they are usually better priced than Benchmade.

Tx. for responses regarding pricing and the price to make. (The machinery gets good use in my opinion.)

This almost makes me think of going custom. More money but to my specs (snakewood, bolster, and such) and probably better steel (the steel, heat treat, etc... even if the same steel like Dozier D2).

Tx. (And I do love the knife and realize middle men up the price.)

What do u think? With respect.

P.S. My 15 year old serrated Spyderco is well made and sharp; my 2012 purchased serrated Spyderco is dull. Who knows? Tx.
 
I think you are way off on your labor estimate. Also, no mention of overhead costs. I am sure that there are a number of other costs that I am not thinking about.
 
A huge part of why "high end" steels are more expensive is the machining costs. High wear-resistance steels do not wear very easily :eek:

Oh and how about QC, shipping for different materials, and corporate taxes?
 
Add State, Federal taxes, manufacturer insurance, health insurance, disability insurance, Social Security employer contributions, OSHA compliance, hazardous waste/environmental compliance....the list goes on.

It adds up, and, thanks to the asshat bureaucrats, it takes big money to run a business, esp. a manufacturing business in the U.S.
 
And don't forget that G10 is machined, not molded. Also FFG take much more coordination and machining time than say, a hollow ground blade

and add in the cost for patent applications (not cheap) for the compression lock and other things, the list goes on and on.

Electronics is not really a good comparison because a huge part of it is software design.

A better way to look at it is, to take that 21 bucks and try making a paramilitary 2! :p
 
What about the middle man? It costs money to deliver the knives to the sellers around the country. On top of that if you buy your knife from an authorized reseller they need a cut as well.
 
Forgotten costs
Packaging (bags/boxes/paperwork/cutout foam/dessicant packs)
Tooling ( jigs/blade clamps for each model made on a machine)
Labor ( things like packaging/moving/sorting/QC/inventory)
Machine wear (bits for cutting G10 must go pretty quickly)
factory (janitors/electricity/water/trash/)
These are just off the top of my head I`m sure I missed many things. If you have ever been in a large factory you start to think of all the little things. (Like they have 200 commercial grade office chairs)
 
I meant without overhead and such.

Plus, very high quantities, machinery presumably already built and supported by many other models.

Plus, with a tenacious selling for $30 - $35. (Made in China, of course.)

QC --- good, but not great --- probably because they sell so many.

So, electronics are easily to build than a knife?
 
How about when you have your own successful knife company with employees, lawyers, accountants, and everyone else to pay, you get back to us on what a fair price is?
 
If they somehow managed to spend $10 per PM2 in manufacturing costs, I'd say good for them. As a business owner, I am always looking for better deals on my products so I can resell at a higher markup. That's not fleecing anyone; that's just how successful businesses are built. So long as the customer is getting a quality product at a competitive price, it's all good. People who expect to pay $25 for something that cost $20 to make would fail as businessmen if they tried to adhere to that model.
 
Yep and here is Sal's house...

chambord-castle-val-de-loire-france.jpg
 
Yep, and retailers need to do what might seem to the unitiated as high markup in order to make enough to stay in business. Probably 50-100%

I think the $21 estimate might not be that far off. I think some cost items were undestimated or not included, but I'm pretty sure a few others were overestimated. $1 each for washers is absurd, I'd say more like 5 cents if you're ordering them say 10,000 at a time. and clips are probably only a few cents too.

...bringing up the Tenacious is interesting. It's generally believed they're made by the Sanrenmu factory. How much does a comparable knife from SRM or Enlan cost? About $15 Retail. Neat how the Spyderco logo magically doubles the price. Certainly food for thought.
 
I meant without overhead and such.

Plus, very high quantities, machinery presumably already built and supported by many other models.

Plus, with a tenacious selling for $30 - $35. (Made in China, of course.)

QC --- good, but not great --- probably because they sell so many.

So, electronics are easily to build than a knife?

Where did you come up with the the math for this?

No overhead? That's the big expense. Ever buy or lease a building, add fixtures & furnishings, equipment, utilities, insurance, clerical, legal, HR & accounting expenses? That's before you open the doors or even hire your workers.

This is before you sink money into design & Tooling (multiples) for every knife model you offer. Then there is the R&D, which is a whole separate set of expenses, even for the projects that get cancelled.

Packaging, warehousing, transport & fuel...

"$1" for marketing? Once again, where did you come up with these numbers? Marketing expenses for a retail product can be up to 30% the retail price...

We can go on if you'd like.
 
So, electronics are easily to build than a knife?

A custom knife would be easier than a custom ipad! :p

But the parts/manufacturing cost of an ipad is a very very small cost of overall cost

There is no analogy for software in knives

Yep, and retailers need to do what might seem to the unitiated as high markup in order to make enough to stay in business. Probably 50-100%

I think the $21 estimate might not be that far off. I think some cost items were undestimated or not included, but I'm pretty sure a few others were overestimated. $1 each for washers is absurd, I'd say more like 5 cents if you're ordering them say 10,000 at a time. and clips are probably only a few cents too.

...bringing up the Tenacious is interesting. It's generally believed they're made by the Sanrenmu factory. How much does a comparable knife from SRM or Enlan cost? About $15 Retail. Neat how the Spyderco logo magically doubles the price. Certainly food for thought.

Warrantee plays a role too.
 
direct costs of manufacture (made in high quantity):

First, define this. How many do you consider hifh quantity, and how many do you think they have made?

G-10 slabs (good quality, thick): $5

Spyderco has their G-10 custom made with extra layers of fiberglass, and it is made in sheets, so there is always some waste.

S30V (3oz?) $5

Again, this material comes in sheets. half of all the material will be wasted in the cutting and grinding processes.


Where did this number come from? Is that just the material cost for the stainless steel actually in the liners, because once again there is going to be quite a bit of waste involved during manufacture.
Washers $1
Screws/Clip $1
Other $1

I'll let you slide on these, even though I think the stainless steel precision fittings used are more expensive than you think.

Labor (they rush 'em out) $3

You've never manufactured anything in your entire life, have you? You can't even machine a liner for that, much less heat treat a blade.

Advertising $1

You haven't paid for many ads in national media or shelled out the money to operate an online forum, either, I guess.

$21

Sure there is designing a model (the Military --- just smaller and the Para 1 --- designing sound like fun to me in any case!!!).


Yeah, it sounds like fun until you're the one doing it. Average cost from an idea in your head to a knife on the shelf is around $250,000.

Well, what about the Tenacious? Cost to maufacture of $20 vs $80 --- I think not

It's called exchange rate. Look it up

and if so, make all knives in Taiwan

The Tenacious is made in Mainland China, not Taiwan. Believe it or not, there is a difference.

I suggest you start up your own production company and show everyone how it should be done.
 
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