Customs Pricing – Opinions and Views?

[lwrhea]

The 10% increase is for this year. I will have to see how things go for next year, but I wont go over that and each succesive year will probably 8%, 5%, etc. Is that what your talking about Bob? Sig...what? Lin

 

[jdm61]

Hi JDM,

Without seeing the knives. Assuming you are going to use stainless fittings and include a sheath. You're not a JS. So basically $175 for a Hunter and $300 for a Bowie with a sheath. This would be with a good fit and finish.

Obviously Ironwood or Stag would add some more to the price.

That will be $25.

WWG

This is a 1075 hunter with warts that was my first sale. Pardon the bad pic.

 

[Starkman1]

The 10% increase is for this year. I will have to see how things go for next year, but I wont go over that and each succesive year will probably 8%, 5%, etc. Is that what your talking about Bob? Sig...what? Lin

Lin,
Yes and no, but sounds like you got the idea. That 8%, 5% may be 15-20 years down the road, for others it may be as quick as 5 years. It really depends on several other factors, but there seems a time when things will eventually reach a plateau. You may end up short changing yourself and losing money. From what I have observed, if you don't take advantage at the right time, you can really take a hit in the long run.

Take an average ABS JS hunter about $375.00 give or take $25.00 a yearly increase of 10%, in five years that knife would cost about $550.00. Sounds about right. However, that is not taking into account increases in labor, experience, materials and other additional overhead. If that 10% is based on market position than add about 3-5% for yearly inflation and know lets add on 10% for market position increase, know that standard hunter is now around $655.00 five years later (15%/year) for a standard hunter. Something has to give and eventually and taper off.

There will be times when I think a maker can take advantage of the notoriety when he's hot and adjust prices accordingly, because in the future some new hot shot is going to come along, so other times when he may have to back of a little as to not price himself out of the market. There is a fairly well known maker that had his knives have kinda stalled right now. I don't think he'll be increasing his prices anytime soon.

I think I like the word "demand" better than market position.

Lin, I would have to say your one of the hot makers right now.

I don't have the experience, but It would be interesting if someone can track the history of a well known maker over the years and see his pricing trends, and note what has occurred during the highs and lows.

I hope I'm not meddling in Les' area of expertise....he could shed more light on this than I can.

Bob

 

[severtecher]

Oops! try again

 

[severtecher]

Wow, lots of info on this one. Sounds like Don has a good perspective on being a knifesmith and maintaining a business.
Here is my set-up. I have the knife monkey on my back. He is small , like a squirrel monkey , not the big primates. I don't collect anything else so I spend what little I have on knives that I find attractive. I buy an average of 2 customs a year, usually in the $500 to $1000 range, sometimes double, sometimes half that. Resale value is way down the list of considerations. My knives will be sold when I'm dead.
A maker has to be the judge of his own prices since he is in constant contact with the customer. If he is not in contact, because he has no customers, he has to assess the problem. Prices too high, or so low that someone thinks the quality is no good. Is there a market for the type of cutlery they make. After the initial few years in a makers career he should increase in quality, exposure, number of clients (especially repeats) and hence the price ought to go up. The material cost increase is a given and has of late been affected by fuel costs. That has to be passed on or you will die.
I think we can all agree we are dealing in a niche market when it comes to custom knives. Tastes vary greatly, as with all art forms, and a maker will find his or her place. Tai Goo, a fellow resident, forges as well as anyone I have observed and has a great following. He does lots of neo-tribal stuff that does not appeal to some, but he sure has his share of that niche. He can sell a knife on reputation alone, like many makers. This reputation has not come through the ethers but through years of hard work and exposure at venues that cost money to attend. When should he raise his price? Ask him as he should be the best judge.
This reminds me of another quirk I have noticed primarily on the forums.A guy will post a knife for sale for $500 and the next day or two he will drop the price to $475 and then again to $450 and so on. I have gotten some great deals this way just because I don't look at the For Sale sections every day. Had I seen it I'd have paid the $500. Either the guy is in a financial bind or has that monkey tapping him on the shoulder to get something new. Be patient fellows if you want to find the right buyer. I bought one expensive custom for half it's market value this way.It's not for sale either. I'm not complaining mind you. Just gives me money for another knife.
DEALERS, I like! Where else can you go and see so many pretty knives in one place. I have purchased from reputable online dealers, dealers at shows , and my local dealer, Bladerunner Knives. I prefer to buy local as this will keep the customs available to me to fondle in the future. Any maker who can't justify in his mind to attend a show is severely underestimating the fondle factor.
I bought Koji Haras Best of Show knife from Las Vegas a few years back. I liked the look but when I opened and closed the knife that clinched the deal. I had to get that knife. I did not know it had won Best of Show until after the purchase. Hands on will easily guarantee a sale.
Another example of the same type was the Mike Mooney Bowie I purchased at the AKCA show in Mesa. It is a short drive so I go to look every year. I had already placed an order with Mike for a fighter and I stopped by to say hello. He had an Ironwood/ S30V Bowie that fit my hand better than any knife I'd ever held. Perfect balance, light and fast, and sexy as Salma Hayek. I don't joke about Salma. I walked off to see the other tables and wandered back twice to say hi to Mike, again. I was afraid someone else would find the treasure that was rightfully mine so I called home, got the OK, and made the buy. I was not planning on spending any money at the show but that was the best $650 feel I ever got. I told Mike to put my fighter further down his list and will take delivery of that knife soon.
I am not a big player in the market but this may give you makers some insight into how us little guys collect knives. Lots of little dollars add up.
Keep those beauties coming and i sure am glad to be here. Kevin

 

[scottickes]

This thread is interesting to me, but hasn't been as helpful as I had wished. I'm not new to knifemaking, but I am new to proactively selling. At the current time, I sell 4 or 5 knives per year. Mostly by word of mouth. I will be at my first show in Eugene in April of 2008. I will also soon be offering some of my knives on the BladeForums "for sale" threads.

I've been looking at a lot of knives for sale lately by other makers. I'm trying to see where I fit in the market place. I'm trying to be "realistic" about my current quality of fit and finish. I do not make a particular pattern over and over very often. I basically make "one of a kinds". I do have some quirks in styling, but am always looking to broaden my designs and try new things.

My point is, that for myself anyhow, pricing is the most difficult part of being a knife maker. I don't want to price myself so high that people don't perceive value, but at the same time, I want to get a fair price for my work.

I'm just struggling with this pricing aspect of being a new, emerging maker.

Ickie

 

[Les Robertson]

Hi Bob,

Makers like Lin "Get it". That if you want to be in business long term, you need to provide "value" pricing. This is especially important if you want to go full time.

My recommendation is that you offer a base knife for $X. Then you let the buyer determine the final price. You want a premium handle material you pay extra for it. You want a 800 grit hand rubbed finish on your blade, you pay extra for it.

This allows the maker to be paid for their work at each step.

With regards to the ABS, they are fortunate to have the JS/MS set up. This allows people to kinda know what a knife should cost. Bob your example of $375 for a JS is inaccurate. $375 would be for a "senior" JS maker who is about to test for MS. The average cost of a average JS maker should be in the $275 - $300 range. This value price allows the make to steadily increase their price for their hunter for the next 7-8 years with no problem (assuming they will get the MS Stamp in 3-5 years).

Additionally through sheer repetition will get faster, reducing their time to make a knife. This will give them a "raise" for each knife as they can produce the knife faster. Additionally they may put some of their profit back into the shop buying better equipment which increases their productivity. As well they may use some of their profit to buy in "bulk" which will also lower their costs and improve the bottom line. Then there is the tax advantages which a LLC or corporation will provide over a Sole Proprietorship. Remember, it is not what you make it is what you keep.

WWG

 

[Kevin Jones]

This thread is interesting to me, but hasn't been as helpful as I had wished. I'm not new to knifemaking, but I am new to proactively selling. At the current time, I sell 4 or 5 knives per year. Mostly by word of mouth. I will be at my first show in Eugene in April of 2008. I will also soon be offering some of my knives on the BladeForums "for sale" threads.

I've been looking at a lot of knives for sale lately by other makers. I'm trying to see where I fit in the market place. I'm trying to be "realistic" about my current quality of fit and finish. I do not make a particular pattern over and over very often. I basically make "one of a kinds". I do have some quirks in styling, but am always looking to broaden my designs and try new things.

My point is, that for myself anyhow, pricing is the most difficult part of being a knife maker. I don't want to price myself so high that people don't perceive value, but at the same time, I want to get a fair price for my work.

I'm just struggling with this pricing aspect of being a new, emerging maker.

Ickie

Ickie, you are not alone in the maker pricing thing, I assure you.

IMO first, you need to calculate your cost being material, supplies, power/fuel, depreciation on shop and equipment, marketing/advertisement (ads, show expense, dues etc.), insurance and office expense then add a % mark-up to cover salary and living expenses or figure hourly if more comfortable with that.

Then take this number and run it against the maker’s prices who you see as being your competition.

This should give you a gut check as to what you need to do in your initial pricing.

You can not price anything accurately without knowing your true cost.

 

[Les Robertson]

Hi Scott,

One of the problems of only making 4-5 knives a year is that you are a hobbyist. I don't mean that as a derogatory term, just the category that you fit into.

As for pricing, figure out how much your materials cost (to include belts and anything you use in the shop that you would use to make another of the same knife) and add 10% (to cover inflation and material cost increases).

Remember at this point people are paying you to learn your craft.

WWG

 

[Les Robertson]

Hi Kevin,

For new makers, actual cost doesn't enter into it. You will not be paid the same as an established maker (which would figure their costs the same way you are recommending). If they did their prices would be similar.

The new guys are going through an "apprentice" program if you will. Any one who has any experience with this understands that the apprentice makes substantially less then the trained professional.

WWG

 

[scottickes]

Hi Scott,

One of the problems of only making 4-5 knives a year is that you are a hobbyist. I don't mean that as a derogatory term, just the category that you fit into.

As for pricing, figure out how much your materials cost (to include belts and anything you use in the shop that you would use to make another of the same knife) and add 10% (to cover inflation and material cost increases).

Remember at this point people are paying you to learn your craft.

WWG

I think you have an inaccurate idea of my production. I make 25 to 30 knives per year currently. I've probably made 150 to 200 knives since my beginnings in 1989. Some of those years I made only 4 or 5 knives. Some years I made 20. I have given most of them away, as my learning curve has gone up. I'm now confident enough in my fit and finish to begin offering them for sale proactively. I have a full time job and make knives when I can. Which is weekends and weekday evenings. I expect my production to begin leveling off at about 30 to 40 per year for a while. Some years it might be more, some years less, depending on my travel schedule for my regular job. My goal in the future is to pass the ABS journeyman smith test.

I would say that I was a hobbyist for many years, but am slowly breaking away from being a hobbyist. I'm kind of a pseudo-hobbyist currently. My hope is that you see more and hear more about my work in the future.

Ickie

 

[jdm61]

Hi Bob,

Makers like Lin "Get it". That if you want to be in business long term, you need to provide "value" pricing. This is especially important if you want to go full time.

My recommendation is that you offer a base knife for $X. Then you let the buyer determine the final price. You want a premium handle material you pay extra for it. You want a 800 grit hand rubbed finish on your blade, you pay extra for it.

This allows the maker to be paid for their work at each step.

With regards to the ABS, they are fortunate to have the JS/MS set up. This allows people to kinda know what a knife should cost. Bob your example of $375 for a JS is inaccurate. $375 would be for a "senior" JS maker who is about to test for MS. The average cost of a average JS maker should be in the $275 - $300 range. This value price allows the make to steadily increase their price for their hunter for the next 7-8 years with no problem (assuming they will get the MS Stamp in 3-5 years).

Additionally through sheer repetition will get faster, reducing their time to make a knife. This will give them a "raise" for each knife as they can produce the knife faster. Additionally they may put some of their profit back into the shop buying better equipment which increases their productivity. As well they may use some of their profit to buy in "bulk" which will also lower their costs and improve the bottom line. Then there is the tax advantages which a LLC or corporation will provide over a Sole Proprietorship. Remember, it is not what you make it is what you keep.

WWG

Now this raises another question. Once you get to the point where you can make a sufficient number of knives per year to make something resembling a "poverty line" wage, how do you find enough buyers? With the prices you have given me, I calculated that I would have to make somewhere north of 150 knives of varying types and sizes a year and maybe closer to 200 if I was going to do this full time assuming I had a little bit of cash coming from somewhere else. Scott says he makes 25-30 a year. it wouldn't be difficult at all to sell 25 nice knives in year, but 150-200 seems like a rather daunting task for a new maker. Any thoughts, Les?

 

[Kevin Jones]

Hi Kevin,

For new makers, actual cost doesn't enter into it. You will not be paid the same as an established maker (which would figure their costs the same way you are recommending). If they did their prices would be similar.

The new guys are going through an "apprentice" program if you will. Any one who has any experience with this understands that the apprentice makes substantially less then the trained professional.

WWG

WWG, true.

Thus I said "take this number and run it against the maker's prices who you see as being your competition". Meaning other new makers with like production.

I sure didn't mean he would be competiting against the established JS and MS of the world. But a new maker is just spinning his wheels if he does not know his true cost from the beginning. This will also help him understand how far he has to go before expecting to become profitable.

 

[scottickes]

I'll check on this thread later. I'm going to head down to my shop and work on my hobby!

Ickie

 

[Don Hanson III]

Now this raises another question. Once you get to the point where you can make a sufficient number of knives per year to make something resembling a "poverty line" wage, how do you find enough buyers? With the prices you have given me, I calculated that I would have to make somewhere north of 150 knives of varying types and sizes a year and maybe closer to 200 if I was going to do this full time assuming I had a little bit of cash coming from somewhere else. Scott says he makes 25-30 a year. it wouldn't be difficult at all to sell 25 nice knives in year, but 150-200 seems like a rather daunting task for a new maker. Any thoughts, Les?

Joe, from 1991 through 1996, I made between 300 and 400 knives per year. And them were lean times. Glad I'm not doing that now

 

[jdm61]

Hi Bob,

Makers like Lin "Get it". That if you want to be in business long term, you need to provide "value" pricing. This is especially important if you want to go full time.

My recommendation is that you offer a base knife for $X. Then you let the buyer determine the final price. You want a premium handle material you pay extra for it. You want a 800 grit hand rubbed finish on your blade, you pay extra for it.

This allows the maker to be paid for their work at each step.

With regards to the ABS, they are fortunate to have the JS/MS set up. This allows people to kinda know what a knife should cost. Bob your example of $375 for a JS is inaccurate. $375 would be for a "senior" JS maker who is about to test for MS. The average cost of a average JS maker should be in the $275 - $300 range. This value price allows the make to steadily increase their price for their hunter for the next 7-8 years with no problem (assuming they will get the MS Stamp in 3-5 years).

Additionally through sheer repetition will get faster, reducing their time to make a knife. This will give them a "raise" for each knife as they can produce the knife faster. Additionally they may put some of their profit back into the shop buying better equipment which increases their productivity. As well they may use some of their profit to buy in "bulk" which will also lower their costs and improve the bottom line. Then there is the tax advantages which a LLC or corporation will provide over a Sole Proprietorship. Remember, it is not what you make it is what you keep.

WWG

I am learning something new every time that I read one of these posts I just assumed that I had to do a fine finish for the type of knife that I am trying to make. The 3 that I have sent out for public consumtion all has at least a 1000 grit hand finish. I couldn't tell you how to do a "machine" finish because I have never attempted one. What should a good hand finish add to the cost of a knife on the low end of forged market?

 

[jdm61]

Joe, from 1991 through 1996, I made between 300 and 400 knives per year. And them were lean times. Glad I'm not doing that now

Yes....you now make pimpin' works of steel art and have a long waiting list, ya rat bastid!!!!!! But from talking with you about your former life, it sounded like you and I are in a slightly similar position starting off in that we didn't have to rely totally on our knives to pay the mortgage.

 

[Don Hanson III]

Yes....you now make pimpin' works of steel art and have a long waiting list, ya rat bastid!!!!!! But from talking with you about your former life, it sounded like you and I are in a slightly similar position starting off in that we didn't have to rely totally on our knives to pay the mortgage.

Yes Joe, I had a a job when starting out, only made a few knives at this time though. In 1990 moved to Missouri, debt free but no income or savings. Started full time knife making to put food on the table. At that time a case of beans (24 cans) only cost $6

Remember, this can work, if you are debt free. This is the key here.

 

[jdm61]

Yes Joe, I had a a job when starting out, only made a few knives at this time though. In 1990 moved to Missouri, debt free but no income or savings. Started full time knife making to put food on the table. At that time a case of beans (24 cans) only cost $6

Remember, this can work, if you are debt free. This is the key here.

Eating all of those beans must have made it easy to concentrate on knifemaking because nobody would want to come into the shop to distract you It is interesting that you had to learn all of the tricks needed to make a LOT of knives per year so that you could build up a reputation and make a lot FEWER knives every year I'm wondering if you still would sell me one of those "$100 fixed blades" that you took to Kansas City? lol

 

[John T Wylie Jr]

As for pricing, figure out how much your materials cost (to include belts and anything you use in the shop that you would use to make another of the same knife) and add 10% (to cover inflation and material cost increases).

Remember at this point people are paying you to learn your craft.

WWG

I would like clarification Les if you would on that.
Say a maker has $60 in materials in a knife for example , add 10 % and that knife should sell for $66 ?? or am I mis reading what you posted ?
Even though someone is still learning his craft , his labor should be rewarded shouldnt it ?
This is a serious question , not a jab or anything , but being a hobbyist myself , pricing is what I dislike most of knifemaking.

The way I have come to price the few I sell is go to shows , seek makers who's knives are the same quality and have been at it roughly the same time as myself and go from there.

This is a great thread and some great points and discussion. :thumbup: