Custom knife prices

Hi Lorien,

You have a lot to learn about the custom knife business....or any business for that matter.

First, there is no way to regulate either profit or profit margin in custom knives.

Second, there is no way to enforce it if you could regulate it.

Each maker determines the cost for their knife...usually by asking another maker how much they think it should sell for. Of course almost without exception the maker asked will tell the maker asking the question...."You are too cheap".

Seldom if ever does this take the makers position in the market in consideration.

The good news for these makers is that most collectors use the "I like it...I buy it". This collector mentality has kept more makers involved in custom knives more than any other 1 thing.

This is also the one thing more than anything that has kept custom knives in a perpetual state of being nothing but a "collectible"...with little or no investment value/potential.

The majority of custom knives that do not sell at a show, for the most part are not purchased because of the price.

Are custom knives too expensive? No. Do to many knife makers ask too much for their knives? Yes.

For those makes like some that have posted here. Who have actually figured out all expenses (Fixed and Variable), then add their time + Profit to figure out what their knives should sell for, congratulations. You are easily in the top 10% of "businessmen" within the custom knife community. Most makers are just guessing.

The axiom of "What is something worth?"...."What someone will pay for it" is alive and well in custom knives.

This goes to the heart of after market prices. As well the years creating a "Brand".

Lorien, how do you suggest we regulate the obscene profits that some collectors are making on the sale of their custom knives?
 
As much as I am sometimes amazed at what some knives go for, I am more often surprised at how little one can get some awfully nice knives for. In the end it's the market that decides the price, so I don't know what there really is to say about it, except that, from my very limited experience, for every maker that manages to get into the $thousands, there are hundreds selling in the $hundreds.

I'm guessing that most of the ones bringing large prices now paid their dues selling a lot of knives for less for a lot of years to get there.
 
the other thing that bears mentioning is that makers can and should make a profit on the materials that they use. A set markup on materials should always be expected and needs no justification, especially if the maker is buying materials below retail, (which they should, especially if they have a tax number).
There is generally retail or catalog pricing available and charging more than catalog price on materials, because one assumes their customers won't notice and don't care, could prove problematic in the long run.

Now getting super deals on materials is another thing. If a maker or dealer gets materials or product at a 'clearout' rate, then I think it's fair for them to charge the catalog price and make a little extra for themselves. These opportunities are a rare boost for any business.

Generally speaking, life is a struggle, no matter who you are. The trick is to survive and thrive, while not screwing over your fellow man. If you are a knifemaker or dealer, and have lots of happy customers who patronize you over time, then you are doing it right.
 
Well, once again we can see that everyone certainly has an opinion!!!!:p



I have a lot of money in tools.....a LOT of money, and am far from getting all the ones I want. Most of them I bought when I was part time.

ONE at a time, maybe one per year. Yes, you are very naive at best......and telling all these people how they should run their lives gets rid of the "best"!:(
 
you get what you pay for , golden rule in my experience with life, how can you put a price in love and passion that is what this knives are worth, craftsmanship has no price but yes we do need money so that is the monatery price, buyers love knives , makers love making them everybody wins , when things get commercialize that is when people in both sides loose , one the buyer likes the knife but feels rip off cause it was made with no love , the maker feels crappy cause his work wich he loves has been now label with a price, this is not about money first is about quality and if you value the quality you see in anothers work well the price should not be the first thing, is a big turn off when a maker is under pressure to make knives and he is so late you don't want the knife any more, the buyer forgot why he oder that knife , all this is what money does , we forget the impression the knife made on us or the hard hours somebody put into them, well if you like it is for a reason , before you pay for it don't forget that reason, and makers don't forget the love for your work no matter what others say.
 
Les,
I'm not one for regulating anything.:)
The point in my posts was to point out how makers 'could' use a model that 'could' give consistency to pricing in general, and that there are sometimes large discrepancies in pricing even between dealers selling the same product.

As for me having a lot to learn, you are totally right. I've been running and growing my own business on my own for almost 5 years, and I learn something new every day. That's what makes it interesting and the day that I'll have learned everything will never come-in this life at any rate

It seems to me that the custom knife market, and the cutlery industry in general, really pulls at the emotions of us consumers, which may explain why the pricing of such items is somewhat esoteric, less fixed and unenforceable.
 
I have always respected and admired the great talent invested in making
some of the "high-end" custom knives. Thinking that I understood where their
prices came from and always amazed how these change very little over the
years even though the secondary market for their knives sometimes more
than doubles their value.

Staying for 10 days, 14 hours a day, with two world-class knifemakers
while they (Edmund Davidson and Tim Hancock) proceeded to nearly
finish one of their knives gave me a whole new perspective, an education
and an even greater respect for the quality, design and finish of their knives.

I also saw the great investment they had made in equipment that allows them total
creative freedom to proceed and create at the highest level possible.

Artisans with such exactstandards and creative abilities UNDERPRICE their knives,
no matter what the actual figures say!!!

All the best,
David Darom (ddd)
 
Hi Lorien,

Do you have a "model" the makers and dealers could utilize?

I know you don't, I just had to say it.

You are like most small business people. You want something to "level the playing field". This mind set limits those who are the best and are willing to put in the extra time, money and effort to be the best.

It like giving every kid a trophy who plays a sport...while it makes everyone who played (particularly the parents) feel good that their kid got a trophy. It does nothing to reveal to the child that you will, upon adulthood be expected to produce. It does however, piss off the kids who were the top players that their effort is viewed the same as those who missed practice, never played in a game, etc.

To say all makers/dealers are equal and as such should abide by a set of "feel good" parameters (usually created by underachievers) is ludicrous.

Hi Rio,

You have a nice "pie in the sky" outlook with regards to custom knives. Sadly, materials cost money, time and experience are compensated for the level of that experience. Yes, craftsmanship does have a price. You can see it on the price tags at every show and at the bottom of the description of a knife on a web site.

Those makers who don't post prices are reluctant to do so as they do not know where they stand in the current market. They understand that todays collectors are shopping by using their index finger to click the mouse. Makers who are confident their prices are commensurate with their position in the market have no problem pricing their work.

It is up to the maker to update their site and keep the prices accurate. They can show a picture of a base model with price, then show prices for "add ons" .

I find it interesting that makers would want to have to answer emails and phone calls (taking them away from the thing they love to do) to respond to those. Most of the time not getting the order. Pricing "pre-qualifies" buyers and will allow the maker to make the most of the email/phone time with clients and potential clients.
 
I agree with you David, and think that a lot of knives direct from the makers go for less than they probably should, which is why making a living making knives is probably such a tough business.
 
Keith Montgomery said:
I would like to get an idea of what the people on this forum think of the pricing of custom knives.

Over the years I have seen quite a few posts from people that think that custom knives are overpriced. After all they post, materials for making knives are only so many dollars, and if you add a few dollars for shop supplies, utilities, shop space, etc, there is no way that custom knives should cost what they do. I'm trying to get an idea how many think this way.

I'm sure that there are many overpriced custom knives, just like there are many underpriced ones, but as a whole, do you believe that custom knives are priced at a level that mirrors what they are really worth.
Click to expand...


Too many people confuse price and value. Also, too many assume that the value of a custom knife is or should be the sum of the materials plus labor. The value of a knife is based entirely on how badly one or more people want a particular custom knife and in part, it's availability (e.g., there won't be any more Morans made, or a hot part-time maker has low annual output). That value (taking into consideration materials and labor) is translated approximately into some amount of money.
 
Lorian you are dealing with artists when you buy a custom knife. Artists tend to be somewhat tempermental at times, moody if not prone to outright bursts of both tremendous motivation followed by bursts of lost steam and maybe burst of anger, joy and all in between during those ups and downs. Anytime you are dealing in art you are going to see price variance. Art is like that. Artists are like that. Something is worth only what someone will pay for it in the end. Value has nothing to do with asking price or recovering costs it only has to do with what someone paid for it at that time. Its all about desire really. Ebay is a fine example of how little value and selling price or sold price have to do with each other. One knife may be something with a set price that has a known value but with art and desire, whether it be the desire to get that object because someone else is trying to and you lost something to him/her before or because you just don't like to lose its no longer about what its worth.


There are fixed costs that can be calculated by us makers as with all artists that do what they do and sell it afterwards. Not all costs can be easily figured of course. There is no science to what it runs when you get a price quote from an artist really. I think most base it on a routine average of what they expect to get for their hard work keeping in mind the various expenses that come to them as obvious based on each request, as well as the expected time it may take even if vaquely and they probably have a base line they keep and move up from there accordingly.. One thing about disagreeing or complaining about the price of a piece of art is that its fruitless, especially dealing like this with the artist in question by voicing your distaste for his or her price when looking at it because when dealing with tempermental moody artists you will find that sometimes doing this brings up more than most bargain for. :D

STR
 
Les,
the closest thing to a model that I can come up with off the top of my head is that one has to determine what their costs are, and determine how much money that they need to make. Simple simple. That's a business plan. There are lots of ways to make money, and often the quickest way to do it is the riskiest in the long term.

I'm not saying that Tom Mayo should charge the same for his time as a guy who's just starting up, I'm saying that a businessperson needs to know what their costs are in order make a profit to put food on the table.

I'm trying to say that it's acceptable to make a profit, and that time, experience and investment play a role in what that profit will be. It behooves anyone in business for themselves to know where they stand financially. A large number of people who start up in the business I'm in go under within the first three years because they don't identify their costs right of the bat. I didn't either, and for someone who's winging it, I'm starting to do ok.

And for the record, I'm not presuming to tell anyone else what to do or how to run their business. I'm replying to the question that Keith asked with ideas, that's all. Take them for what they are worth, and if they are worth nothing, don't take them:)
 
Hi Lorien,

You are correct, that is about as basic of a business plan that you any one could possibly come up. However, that is useless in the running of a business. Each business will have its own nuances that have to be addressed by each individual owner.

While you have said you don't have a problem with makers/dealers making money. You also said they should be regulated as to how much they can make...and that percentage should be some how regulated as well.

Each individual maker and/or dealer is free to charge whatever price they want for anything they are selling. Supply and demand drives this business just as it does every other business. Many of the most in demand maker are that way because they make so few knives. Couple that with a hard corp group of collectors who are willing to pay "whatever" to get the knife. Gives you some of the prices paid in the after market.

There in lies the quandary. If the maker makes enough supply to fill the demand the prices will come down in the after market (removing them from the "Hot Maker" list). However, they may be able to go full time and make a living. Or stay on the "Rock Star" list and keep your day job.
 
Keith Montgomery said:
...as a whole, do you believe that custom knives are priced at a level that mirrors what they are really worth?
Click to expand...

Yes.

I don't believe that at any point in history before now has it been easier to get a "better" custom or production knife in terms of quality, fit&finish, and/or artistic merit for so good a price.
 
I'm not into outside regulation, and believe that knifemakers, dealers and other people in business should be relied upon to self regulate, and that there are certain parameters that they can utilize in order to set their own benchmark.

If we don't regulate our own businesses in a sustainable fashion, though, then we will go out of business. I was mainly trying to outline some of the fixed costs/parameters I could see them using, based on my own experiences in a different industry, and how a maker or dealer could forecast their earnings. I think this is important when you're writing your own paycheque.

Marking up materials used by a set percentage is a total case by case thing, determined by the person running the business. Some may choose to mark up their titanium 20%, others may mark it up 50%. Same thing with the shop rate. If so and so needs to get $100 an hour to make a living, while someone else needs to make $200 an hour, then that is something that they should always factor in to help them figure out how much to charge for a knife. How they come up with their rate can be helped by developing a business plan of some sort- how much is rent, how much for tools, etc. The market will let them know if they are off the mark, if they can't get that info beforehand from their peers.

The business plan is for the sole use of the one developing it, in order to know where they're at and how to get to where they want to be, not a way to provide a level playing field, or to enforce pricing or whatever.

I think that a strong community really helps, in that the dissemination of pricing information and what not gets around and gives us all a measuring stick to determine the 'value' of a knife.

I feel that the $600+ I just paid for a knife was fair, and I'm happy, and that's what matters to both me and the maker.
 
When I make a knife I try to charge what I think is fair for that knife, thats not to say some aren't priced differently. When I see a maker drop $40 dollars on a knife I wonder how they can afford to do that. When I see a new maker coming in thinking about the money they are going to make---wow JUST MAKE SURE ITS YOUR LAST OPTION IN LIFE.
 
Interesting discussion.

Very few custom makers are rich. The vast majority are honest, hard working folks who have a passion for what they do. The living they derive from their efforts and expertise are rarely, if ever, extravagant. Fortunately, there's a group of people who are wealthy enough to spend hundreds or thousands of dollars on a single knife that may or may not ever be used other than for admiration. We are blessed to have the luxury to be able to spend such money so that we can enjoy the knives and support the guys who make them. Then there is the inevitable business aspect where a few extra dollars are made or lost in the commerce and secondary market.

I do feel that some makers charge too much and some too little but most, in my opinion charge a fair amount for their work. The market makes adjustments as need be. Yeah, maybe that bowie should only have set me back $950 rather than $1250 or that fancy tactical flipper $1800 rather than $2700. Oh well, life's a bitch sometimes. I consider myself blessed to be playing with my engraved, mother of pearl and damascus Sawby as I type this note rather than standing in a 3 hour water line holding 2 -10 gallon jerry cans in a Kenyan refugee camp, looking forward to my one meal of the day.

It's all relative...
 
A fine knife is comparable almost to a fine watch

I see a custom knife and the beauty and detail put into it, is a piece of art, except this piece of art can also serve a purpose other than telling you that your late for work ...
 
Lorien,

The custom knife industry is self regulated. This is done 100% by the buyers.

You don't want outside regulation...just inside regulation....which can only occur with outside regulation...forcing the inside regulation.

What you are asking for will never happen.

I sense that as a new business owner you are having slow going against the bigger business's in your field. You feel if they were forced to play on a level playing field you could do better. Perhaps it does work like that in Canada. So this may be why your thinking is the way it is.

My experience is primarily with US makers (although I have worked, attended shows and have Canadian customers). US makers, once the past the "artist" mentality and transfer to the "business" mentality (whether they want to admit to it or not)...are capitalist.

An artist who doesn't want to be paid for their work or deal with dirty money...should just give away their work. However, those who want to be compensated with money...have to compete. Those who are successful receive payment for their work. Those who are not...do not.

BTW, what business do you run? Is it your full time job providing full support for you and your family?
 
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