Cost to make knife: Paramilitary II

[Morrow]

What's the business version of the internet armchair commando?

These are exactly the kind of posts that start trouble. I would prefer you voluntarily stop but we can do it a different way as well.

 

[edctac]

^^that's funny

Post #19

 

[AF]

Your post is gigantic waste of thought. There's a market for knives. There are competing companies. The Para 2 sells really well so it's not priced too high. I doubt it's priced too low because Spyderco is a for-profit company.
If you seriously think all knives are overpriced then you should start a knife company.

 

[Fred S2]

I would be shocked to death if there was less than an hour of labor in each knife, fully loaded labor might go for about $35-37. Add in all of the unavoidable material waste, etc, etc, i bet cost is about $75-80 to get it to the distributor. Charge the dist. 95-110 (maybe a tier price) and the rest is history

 

[jimnolimit]

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.

the answer is simple: if you believe that the numbers you posted are accurate and fully represent the cost and time, design and build an awesome knife for $21, market and sell them in stores and online for $100+ and become a rich man.

 

[Chris "Anagarika"]

@Joben,

I share the low cost knives view. Have had many Sanrenmu, Enlan, Navy (only k631) knives, still keep & use the models I like best.

I'd say, the Resilience I have (two) is not merely slapping Spyderco logo to triple the price (EL01 is abou 13-15$ shipped to me, Resilience is about 50$ shipped to me), but lots of thoughts & attention to design compared to EL01. The two are closest to be compared: same steel, liner lock, skeletonized liner, no studs, G10 hanfle.

Not many agrees to this appreciating the subtlety and thought process that goes into the design, but that's what differentiates Apple vs Windows PC as total package.

 

[skyhorse]

I wonder what a $100 bill cost to make?Is a piece of paper with ink really worth $100? Wouldn't fifty $1 bills cost more to make than one $100 bill?

 

[Dan57]

If it was possible to make a knife comparable to a PM2 at a much lower price, that knife would be on the market by now. (It's called "competition.") Seeing as it isn't, one would assume that it would be quite difficult to make a profit off of a knife fitting that description.

I wonder what a $100 bill cost to make?Is a piece of paper with ink really worth $100? Wouldn't fifty $1 bills cost more to make than one $100 bill?

What point are you trying to make here? Do you understand how our monetary system works?

 

[skyhorse]

If it was possible to make a knife comparable to a PM2 at a much lower price, that knife would be on the market by now. (It's called "competition.") Seeing as it isn't, one would assume that it would be quite difficult to make a profit off of a knife fitting that description.



What point are you trying to make here? Do you understand how our monetary system works?

Yes I do Sir,and that knife would not be on the market long.Try printing you're own $100 bills and you'll get my point.

 

[mfi]

I own a 3800.00 Tag watch..didn't pay that, no where near it....but when it needed a new movement, it cost me 150.00, its very hard to quantify the cost of things unless you take into account..everything related to it...

 

[Dan57]

Yes I do Sir,and that knife would not be on the market long.Try printing you're own $100 bills and you'll get my point.

Why wouldn't it be on the market long? A knife with identical quality and materials at a much lower price would sell like hotcakes. It would probably stay on the market indefinitely.
And, sorry, but I still don't understand the printing your own money analogy.

 

[skyhorse]

Why wouldn't it be on the market long? A knife with identical quality and materials at a much lower price would sell like hotcakes. It would probably stay on the market indefinitely.
And, sorry, but I still don't understand the printing your own money analogy.

I give up!

 

[Scurvy092]

Even if it does cost $21 to make. They turn around and sell it to wholesaler for $50. The wholesaler then turns around and sells it to the dealer for $85 who then sells it to use for $120.

If you want to discuss ridiculous profit margins, look at Apple.

 

[Doogoon]

They have many more things to pay for than the materials. While they are having to pay for everything is costs to make these knives, they also have to find a way to get themselves a nice fat paycheck for running the company.

 

[Striderco]

I like my Spydies and will not complain about their prices. I think for the most part they are an excellent value!!

 

[kestrel57]

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?

Not interested in a fair price; a fair price is what one is willing to pay. It's an innocent question and I'm interested in knives in general, not in this one model or company. Spyderco is a company by the way, not a person. And public companies divulge profitability on a quarterly basis --- but I really don't want to know in any case. And for most companies cash flow is key, not quarterly net income. (I was in Institutional credit.)

If I ever own a successful knife company, I will gladly tell all about cost accounting and net income and cash flow and market share --- a small price to pay for owning a successful company.

 

[kestrel57]

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



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



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.


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



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.



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



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.



It's called exchange rate. Look it up



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.

Thanks for answering my question unlike some. I am not a cost accountant and I do know overhead and such is key. (Don't make me laugh about exchange rates, I understood that at age 14.) I was in Institutional Credit, rating the bonds of Institutional Companies (say, GECC) and did work on WS and made decisions on Institutional Lending --- some in the billions per account to high risk companies. For these bigger boys, net income had some importance but in my universe cash flow was key. (Especially with all the accounting tricks.) Public companies and private companies.

I was merely curious about what I don't know --- what those on the board here would guess it costs in raw material dollars to buy parts for a knife. Any knife by any company. And what the biggest raw material costs are.

But thanks for answering --- you did do that. I honestly appreciate that. :thumbup:

 

[kestrel57]

If it was possible to make a knife comparable to a PM2 at a much lower price, that knife would be on the market by now. (It's called "competition.") Seeing as it isn't, one would assume that it would be quite difficult to make a profit off of a knife fitting that description.



What point are you trying to make here? Do you understand how our monetary system works?

Sorry to ruffle feathers. Not my intention. I was really curious and as explained below I understand Finance & Banking (I stopped several billion dollar lending deals & rated multinational debt for multinational companies at one of the big two Rating Agencies), but not cost accounting for premium knives. I really have no ax to grind and understand. I never said Paras are over-priced and they are presumably not given the robust secondary market for them and realize price is more a function of what a buyer would pay. The price a new para trades for in the secondary market is as good a gauge for market value as any I can think of. Think of the stock market. Kudos to Spyderco for a great knife and their business success.

P.S. When buying stock (Note: There is much info on every aspect of these companies) or bonds don't forget the importance of cash flow. :thumbup:

 

[kestrel57]

I own a 3800.00 Tag watch..didn't pay that, no where near it....but when it needed a new movement, it cost me 150.00, its very hard to quantify the cost of things unless you take into account..everything related to it...

I agree, but my question was merely raw materials in a knife --- say stainless steel. By the way, your Tag probably has an ETA movement (perhaps the 2892 --- very good but cheap to make). I love the square Tag racing model replicas from the past. Congrat. on net getting a $3,800 quartz Tag.

 

[kestrel57]

Even if it does cost $21 to make. They turn around and sell it to wholesaler for $50. The wholesaler then turns around and sells it to the dealer for $85 who then sells it to use for $120.

If you want to discuss ridiculous profit margins, look at Apple.

Definitely agree. Plus they have software earnings post-sale of hardware. They also use Chinese labor (fine --- except if they use little kids as some claim). The Kindle Fire is being sold at a loss right now by Amazon. Makes sense for them as they can then sell a boat load of proprietary content for a mint.