Custom Knife Pricing-Educational Discussion

[Les Robertson]

Hi Cnas,

I got your original post. Yet another post complaining about dealers pricing the knives 3 or 4 times the original value 5 minutes after it leave the makers hands.

Who are the dealers doing this?

they price them out of reach for many people because they know there are a few select people who will pay their prices.

How about an couple of examples.

However, with knives, in a perfect world the average joe would be able to afford many very nice custom knives.

What is the disposable income level of your "average joe" collector?

You tell them to contact me and I will give them numerous makers they can contact for their price range.

Now you don't get Champagne on a beer budget.

I think you (like many others) have accurately portrayed some dealers (and lets not forget that the makers are culpable in this as well....as all they have to do is choose not to sell to the dealer who "screws" your average joe collector.)

And like all the others you will choose not to name names. Which now makes you culpable in allowing these dealers (as you said some of them your friends) to continue to screw the average joe out of getting some of these incredible knives.

 

[Tiiiiiiiim]

When I was tattooing, and I quoted an hour for the work, and it took 3 hours....the owner of the shop said "when you are still learning, you can't charge the customer for the time it took you to do it right, only for what is "fair"."

Best Regards,

STeven Garsson

I think It's like that with any trade. In my first year as an apprentice fine furniture maker my boss would only charge the client half of the hours i actually worked on the job.

I'm a new knife nut and have started to dabble in making. I've thought about it and if i get to a standard of quality i think i can sell, I'll sell at least he first few at cost, for a couple of reasons. I'm not relying on it to pay the bills and because im doing it purely out of enjoyment and only in my spare time, i really don't mind the sales just covering costs for a bit. It would just be a privileged to get my name out there.

Tim.

 

[Kohai999]

Correct Paul, as I'm very happy with it and IMO it was the second best value at the show. :thumbup:

Will you still feel that way if Nick decides to follow his muse and become a non-knifemaking hermit living in the Hoh rainforest....and you want to sell it, and cannot get 1/2 the price back?

Nick,

ALL of the knives recently displayed went to Forumites....tell me, outside of BladeForums and the ABS(I refer to the General knife world, would they have heard of you at say, the USN Gathering?)what position do you hold in the market?

That is the part that defies understanding, Nick....what if you disappear for another 3 years, and make a habit of it?

I DON'T want you to, but you have to admit that it is a possibility......and that affects the way a disciplined and educated buyer has to look at all collectible knife purchases.

Thanks for the geography lesson, Paulie.....I'll be sure to bring it up the next time you offer the opportunity.

Best Regards,

STeven Garsson

 

[BowieBooster]

Every time I hear the word, "wildwood," I have creepy flashbacks to those 90's, 5-pound United Cutlery, et al, "Bowie" knives and fighters. Truth be told, I always thought that micarta would be a fad, and I was, sadly, very wrong.

But mokume is a Japanese blade classic going back hundreds of years. I loves me some mokume!

 

[irbailey]

I find pricing to be exceptionally difficult.

As a spare time maker, it's done for enjoyment rather than a living, and time taken to make one is not really an issue for me. The only guide I have as to how long each one takes is how many I made the previous year. This doesn't really mean much though, as it fails to take other factors into account such as the times when I have other things to do and can't get into the shop.

My first knife was sold for £35/$54 , and as the orders came in and the work slowly improved I decided on £10/$15 per inch of overall length for stock removal and £15/$23 for my basic damascus. This figure was based on nothing but guesswork to be honest.

After a couple of years at this price I actually had people ordering from me say that I was too cheap.

At the start of this year I raised my prices to £15/$23 per inch for normal blades and £20/$31 for damascus or laminated blades. The first order I quoted for at the new price was on new years day. The customer told me that I was too cheap.

You can't win can you?

I've no idea how collectors/buyers value knives, I can only hope to cover my costs and be grateful that I'm selling anything at all. I'm upping my price again in the new year, after recently seeing one I sold for £60/$93 last year sell for £200/$312 a couple of months ago. This isn't the first time I've seen my work sell for more than I charged originally, which to be honest I find quite bizarre to say the least.

As I've said before, if I never sold another I'd still make them. The fact that I get to make a little money from doing something I enjoy is just a bonus.:thumbup:


Ian

 

[Magnus Axelson]

Will you still feel that way if Nick decides to follow his muse and become a non-knifemaking hermit living in the Hoh rainforest....and you want to sell it, and cannot get 1/2 the price back?

Nick,

ALL of the knives recently displayed went to Forumites....tell me, outside of BladeForums and the ABS(I refer to the General knife world, would they have heard of you at say, the USN Gathering?)what position do you hold in the market?

That is the part that defies understanding, Nick....what if you disappear for another 3 years, and make a habit of it?

I DON'T want you to, but you have to admit that it is a possibility......and that affects the way a disciplined and educated buyer has to look at all collectible knife purchases.

Thanks for the geography lesson, Paulie.....I'll be sure to bring it up the next time you offer the opportunity.

Best Regards,

STeven Garsson

Very good thread, thank you for starting it!
It is very interesting to read it all and I look forward to following it. I think I can learn a lot from all this.
Please excuse my potentially bad spelling and/or phrasing.

I am too curious not to ask a humble question (or two) regarding this.

At how many knives per year made does a knifemaker step out of the "hermit-category"? And for how long can a knifemaker be "gone" from the knife community, due to things in his life that he or she can not control, without being put back into the same "hermit-category" again?
How much does this indeed affect prices of knives? If one can at all summerize it somehow? I am starting to realize that the value and appreciation for any certain knife can actually be influenced by the current "status" of the knifemaker in question.
I am wondering about this since I would like to learn if and how I can relate this to my own pricing.
And also to know if a part-time maker can ever be considered a Knifemaker in every sense of the word?
Future decisions may depend slightly on this.

Kind Regards
/Magnus

 

[Kevin Jones]

Correct Paul, as I'm very happy with it and IMO it was the second best value at the show. :thumbup:

Will you still feel that way if Nick decides to follow his muse and become a non-knifemaking hermit living in the Hoh rainforest....and you want to sell it, and cannot get 1/2 the price back?

Nick,

ALL of the knives recently displayed went to Forumites....tell me, outside of BladeForums and the ABS(I refer to the General knife world, would they have heard of you at say, the USN Gathering?)what position do you hold in the market?

That is the part that defies understanding, Nick....what if you disappear for another 3 years, and make a habit of it?

I DON'T want you to, but you have to admit that it is a possibility......and that affects the way a disciplined and educated buyer has to look at all collectible knife purchases.

Best Regards,

STeven Garsson

Yes, I will feel that way Steven. Actually I feel the odds are much greater that this knife will be worth twice what I paid for it in the future than 1/2.

It cost me $1175 for this 14" damascus bowie (rare from Nick) with premium ironwood handle which included a $150 Paul Long inlay sheath and a $30 Bill's custom case. All this from an ABS JS maker of 14 years who has won the prestigious Peck Award. In addition, I would put this bowie in regard to fit, finish and ergonomics among the top 10% of all maker's knives I had handled in my lifetime.

And at the risk of seeming arrogant, I do consider myself a very disciplined and somewhat an educated buyer and believe that even if Nick didn't make another knife, in five years I would still be able to get what I paid or more. The knife is that nice.

Besides, considering your above post, shouldn't you be worrying more about your own investment as I believe you own several of Nick's knives and I'm not so sure any are nicer than this one.

 

[RogerP]

I certainly found the piece I got from Nick to be a solid value. And I sure wouldn't look at Kevin's piece as defying comprehension in terms of pricing. I don't think either Kevin or I would have difficulty finding buyers for those pieces should we choose to sell them.

I had hoped that this thread would focus upon issues relating to pricing - not singling out a particular maker for a forensic examination.

Nick's circumstances are well known on the forum - he has been nothing less that candid and honest about them. But those circumstances make Nick a less than ideal subject for a discussion of principles of pricing because his situation is somewhat unique.

Roger

 

[Chuck Gedraitis Knives]

Coop- Thanks for your post, what you did by charging lower prices and being paid to learn is called "paying your dues". These days there are makers who have become "internet sensations" and have not had to "pay their dues"

A friend has told me on a few occasions that he prices his knives using the following guidelines. Price the best knife you have on the table the most and the one you think is not the best the least. The rest fall somewhere in between. If they are all comparable then they have comparable prices.
I see this as skewed because a client might not agree with you as to which knife is your best.

I price my knives with 2 guidelines,
1. What have I sold similar knives for in the past, in regards to size, materials and details.
2. What are makers who make similar knives selling their knives for. I reference a lot of dealer and maker websites.

In the end it's still though.

 

[Kohai999]

Besides, considering your above post, shouldn't you be worrying more about your own investment as I believe you own several of Nick's knives and I'm not so sure any are nicer than this one.

I paid considerably less....that is a factor. They are extremely nice...and both come with a Nick Wheeler sheath. Nick's sheaths are superb, every bit as nice as his knives.

It cost me $1175 for this 14" damascus bowie (rare from Nick)

ANY knife from Nick is rare Kevin.

I had hoped that this thread would focus upon issues relating to pricing - not singling out a particular maker for a forensic examination.

Nick's circumstances are well known on the forum - he has been nothing less that candid and honest about them. But those circumstances make Nick a less than ideal subject for a discussion of principles of pricing because his situation is somewhat unique.

Roger

Nick spoke up, as a maker in this thread...with specifics, at length. I addressed those specifics in my unique style...that is hardly a forensic examination...that is a discussion, especially since you and Kevin have expressed your opinions.

Best Regards,

STeven Garsson

 

[RogerP]

Nick spoke up, as a maker in this thread...with specifics, at length. I addressed those specifics in my unique style...that is hardly a forensic examination...that is a discussion

Well I guess any more makers who might otherwise have been considering speaking up are now forewarned.

I've said my peace on that point. Hopefully others will contribute their ideas as to what factors should be taken into account in pricing.

Roger

 

[RogerP]

This has been a real nightmare for me. I have people tell me, and by people I mean collectors, that I'm not charging enough for the knife I produce. But my thinking is if I overprice myself then the list of customers go down. A drop point hunter with sheath is $400. If I add damascus, depending on the pattern it goes up. If it's a frame or a takedown it's considerably more. Some guys are real pro's at frames and takedowns, I am not, it takes me a lot longer to pump one of those out. I'm getting to the point where all the mistakes I've made in the past don't happen anymore. Mistakes are wonderful things and teach you a lot. I try not to make them as much as I used to.

One of the talking points that we didn't quite reach at Ashokan: "Beware of the inflationary effect of a small group of enthusiastic buyers."

An obvious corollary should be: "Beware of your competition telling you to raise your prices."

When a customer buys a knife and feels they are getting more than what they paid for, he is more likely to buy another. When the knife is "fully valued" at the initial point of sale, that has a stifling effect on the secondary market.

Roger

 

[Danbo]

Yes, I will feel that way Steven. Actually I feel the odds are much greater that this knife will be worth twice what I paid for it in the future than 1/2.

It cost me $1175 for this 14" damascus bowie (rare from Nick) with premium ironwood handle which included a $150 Paul Long inlay sheath and a $30 Bill's custom case. All this from an ABS JS maker of 14 years who has won the prestigious Peck Award. In addition, I would put this bowie in regard to fit, finish and ergonomics among the top 10% of all maker's knives I had handled in my lifetime.

And at the risk of seeming arrogant, I do consider myself a very disciplined and somewhat an educated buyer and believe that even if Nick didn't make another knife, in five years I would still be able to get what I paid or more. The knife is that nice.

Besides, considering your above post, shouldn't you be worrying more about your own investment as I believe you own several of Nick's knives and I'm not so sure any are nicer than this one.

I think I just found myself a new screen background. :thumbup:

 

[Don Hanson III]

I've been approached by many new makers wanting help. First thing I tell them is make 100 simple knives and sell cheap or give away. Not one has taken my advice

Most want to skip the work and move right into high-end folders or bowies. Doesn't work that way.

Price has been tough for me. I always try to leave room for the new owner to make a profit on my knives and usually hit the mark pretty close. But on occasion I've missed it in both directions.

 

[Kohai999]

Well I guess any more makers who might otherwise have been considering speaking up are now forewarned.

I've said my peace on that point. Hopefully others will contribute their ideas as to what factors should be taken into account in pricing.

Roger

As you said before, they will probably not be subject to the same possible contention because Nick's is a unique case......however, I think that in order to have the maximum understanding, we should examine and discuss any case, and do so with open channels....no golden calf makers excluded.

For the record, I personally like the knife of Kevin's we are discussing, but I would not be interested at that price....I would be interested at $975.00 for the knife, including a Nick Wheeler sheath. This allows me some upward mobility on the aftermarket. There are many makers who do work I find exceptional, and who were once fantastic values that have priced themselves out of my interest level. Obviously, in this case, there are numerous others that do not have an issue with Nick's price.

Who would give Kevin $1,500 or better if he wanted to sell this one today? Danbo, if you had the $$$ just laying around, would you?

Best Regards,

STeven Garsson

 

[DWinkler]

“Custom Knife Pricing”
This is a good potential thread for both makers and buyers. Even though it seems to get off track a little I guess examples are being used as an attempt at making a point. Some I follow, some I see as bickering. The bickering makes me want to move along to something else and I would imagine others may do the same.

Back to the point of the discussion.

Knife pricing is variable to different makers because economic needs are not the same. The maker that loves to make knives as a hobby and has a steady source of income other than knife sales can price knives any way they want to. They can charge $1.00 an hour or $500 an hour and it doesn’t really matter. The market will sort out if they sell or not. If the maker is having fun everyone is happy. I like to fish. If I put a price per pound on the fish I catch compared to lost shop time I would be better off to buy fish at the store. But I like to fish so the price doesn’t matter. Even if I don’t catch anything I still have fun.

When a maker spends a lot of time in the shop and needs to show a return on his investment the picture changes. Again there are variables in play depending on the percentage of income needs to come from knife sales. A maker that has a retirement from another job, is working another job with a decent income or has a spouse that helps pay the bills does not need the same knife income as a maker that relies fully on knife sales to pay the bills.

Hourly wage and materials is only part of the equation that makers should use when pricing their knives. This is the easy part. Overhead expense is the hard part. Rent, interest, equipment, electricity, travel expense, auto expense, phone, computer, show fees, advertising, and taxes are a few. Then there are sander belts, glue, drill bits and other supplies that go into the product. Let’s not to forget my personal least favorite, Insurance. Health, auto, building, life and liability. When a maker is providing their full income through the sale of knives all this needs to be taken into account. Even if I were a part time or hobby maker I would try and get an understanding of what it really costs for me to make a knife.

Knowing this information makes it possible to know if I am making money or losing money and I price my knives accordingly. The price the market will bear is for the collectors, users and dealers to decide.

The hourly shop time wage a maker must charge to really show a reasonable profit may seem high when compared to public jobs. But once you deduct all the extra expenses that are not present in public employment the wage is normally pretty low. Makers that price their knives based on what other makers are charging are shooting in the dark and really doing more harm than good to the industry. Set your price based on reality not fantasy. If they don’t sell lower the price. If you get more business than you can handle raise your price.

Accounting programs like Quick Books really help when trying to figure these expenses and being diligent when keeping track of receipts and purchases is important. Don’t forget you also have to make a knife that someone wants to buy. I guess most knife makers are probably broke and don’t even know it.

Daniel

 

[Kohai999]

When a maker spends a lot of time in the shop and needs to show a return on his investment the picture changes. Again there are variables in play depending on the percentage of income needs to come from knife sales. A maker that has a retirement from another job, is working another job with a decent income or has a spouse that helps pay the bills does not need the same knife income as a maker that relies fully on knife sales to pay the bills.

Hourly wage and materials is only part of the equation that makers should use when pricing their knives. This is the easy part. Overhead expense is the hard part. Rent, interest, equipment, electricity, travel expense, auto expense, phone, computer, show fees, advertising, and taxes are a few. Then there are sander belts, glue, drill bits and other supplies that go into the product. Let’s not to forget my personal least favorite, Insurance. Health, auto, building, life and liability. When a maker is providing their full income through the sale of knives all this needs to be taken into account. Even if I were a part time or hobby maker I would try and get an understanding of what it really costs for me to make a knife.

Well put, and great information, Daniel.

Best Regards,

STeven Garsson

 

[dbl-edge]

Basing pricing on cost of materials and hours worked seems to me the fairest and best way to do it, rather than the "what's the most I can get for this" rationale.

Okay, you come up with a knife design and it takes 30 hours to make (forget the materials; they're cheap on this knife) and you charge a shop rate of $50/hour. That's a $1500 knife. Because you got it down and know what you're doing you can make the next one in 27 hours. Do you charge less money? Of course not. That's a lesson Fred Carter taught me back in 1984. Making knives, at least at the level I try to make them, is not about time involved multiplied by dollars per hour.

About shop rates. You pay $70 or more to have your car fixed, but that mechanic doesn't get that much. He has a business to run, and as I'm sure Les who constantly harps on running our businesses like businesses knows, there are more expenses involved than just your wage. Show expenses, advertising, electricity, machinery, building, etc. are just some of them. So a maker who charges just a regular hourly wage times his time to make the knife doesn't understand how to run a business. As an example Les routinely sells the MLR sub hilt for a price that's higher now than 20 years ago when we started working together for reasons that are not tied into the time involved to make them, and I think I have the sub hilt thing down pretty well at this point so I can make them about as efficiently as possibly without going into mass production.

I'll read the rest of this thread later, but for now I have a business to run and this is not billable time!

David

 

[Joss]

The price is always and only the meeting place of an offer and a demand. Yes, the maker can charge a price higher than the market would bear, and not sell anything. Or they can sell the work for less, and simply let the buyer pocket the delta with the real price.

It's that simple.

Marketing considerations make things a bit harder. For example, who do you sell your knife to? It might be smarter to sell a knife at price X to Coop or Kevin (who are very active promoters of the knives they collect, and therefore provide a valuable service to makers), than to sell it for 25% to Joe Schmo.

I'm amused by successful makers saying it would be "unfair" to sell their ware for more than cost + some percentage. They didn't find it unfair to sell for cost minus some percentage when they (re)started... Similarly, if their ability to produce decreases, no one will agree to pay more for a similar work simply because it took more time. So cost-plus pricing is stupid for knifemakers (and government, for that matter).

I suspect that there must exist a vast amount of knowledge relating to the marketing of art, and maybe that would be useful for dealers and some makers.

 

[Joss]

Couldn't agree more with David.