Customs Pricing – Opinions and Views?

What do people have against plumbers? You guys know the plumber doesn't receive all of that $60/hour as pay. Plus he's got drive from jobsite to jobsite, put up with crap (pun intended) and the "public." Makes a knifemaker's job look pretty easy IMHO.

I can always put off buying a knife, but if I need to use the toilet, it needs to be fixed today. :)
 
brownshoe said:
What do people have against plumbers? You guys know the plumber doesn't receive all of that $60/hour as pay. Plus he's got drive from jobsite to jobsite, put up with crap (pun intended) and the "public." Makes a knifemaker's job look pretty easy IMHO.

I can always put off buying a knife, but if I need to use the toilet, it needs to be fixed today. :)
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You must be a Plumbing Contractor? ;) :D :D

Not that's there's anything wrong with that.
 
My opinion is that the cost of materials and the time spent on a knife is what determines the cost. This should not be more complicated than that...even though it probably is. But, if I true knife maker is making collector knives for display jewel encrusted etc. etc, than I understand the need to factor in all the angles regarding marketing etc. BUT if a maker makes knives because it is his calling and he is a true artist in that form follows function his name and rep will get around and he will do alright. Correct me if I'm wrong but do knife makers get in the business to soley make money$$ This is probably a dumb question I can answer myself, but seriously a one of a kind custom piece takes time I'd imagine and getting rich off of that seems moot. Unless one has a production line product ala HSN type knives. Just my .02
 
Diamond Dog said:
My opinion is that the cost of materials and the time spent on a knife is what determines the cost. This should not be more complicated than that...even though it probably is. But, if I true knife maker is making collector knives for display jewel encrusted etc. etc, than I understand the need to factor in all the angles regarding marketing etc. BUT if a maker makes knives because it is his calling and he is a true artist in that form follows function his name and rep will get around and he will do alright. Correct me if I'm wrong but do knife makers get in the business to soley make money$$ This is probably a dumb question I can answer myself, but seriously a one of a kind custom piece takes time I'd imagine and getting rich off of that seems moot. Unless one has a production line product ala HSN type knives. Just my .02
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I doubt if there's been many if any that got into knifemaking just for the money.
Some do quite well from a monetary standpoint, most all well from the satisfaction of accomplishment and doing something they truly enjoy.

Pricing? Cost of material, overhead and time spend.
Cost of material and overhead are easy, but what are the parameters for judging value of time spent between varying degrees of talent? Market position, longevity, know how, confidence, attention to detail, sense of style, charisma, education?
Even after another 100 or so post, we will still be wondering about pricing.
 
Supply and Demand...everyone has "bodily" functions. Consequently, plumbers get what they do, same for AC people in the summer and Heat people in the winter.

Custom Knives...no one needs them...they may want them but they don't "need" them.

What I have learned over the years with regards to pricing is that there is no "perfect" formula.

One thing I have found that will hurt a maker very quickly is raising their prices to what the knives are doing in the after market. Usually what happens is that there are a few who will pay a very high premium. Then there is nothing. Maker raises his price and cannot lower it. This has happened time after time with several of the "internet stars".

Makers need to figure out their price. They should work in concert with their dealer to insure it is a value price. This is what will encourage buyers to consider a new maker. Using a dealer to "raise" your prices will usually be a mistake. Although if you're working with a maker who doesn't stand behind the maker and/or his work it will make no difference.

The majority of makers who don't like to work with dealers are the same one's whose work the dealers have not interest in. The reasons are straight forward and simple. However, it is easier to bad mouth a group of people (most you don't know) than it is to raise the quality of your work, advertise, value price your work, attend shows, etc. I suspect that if I talked with these makers for 10 minutes they would be selling me their knives at a discount. Im sure it would be the same with other dealers as well.

Purely from a business perspective why would you turn down a purchase of several knives and possibly an order for several more?

Dealers standing behind you and your work and selling for your retail price. Will help you long term better than working with a dealer who raises up your prices quickly and then when he can't sell any more he finds another maker.

There are a lot more makers out there than there are dealers. Those makers doing good quality work are showing up every day. So for an experienced dealer who knows what he/she is looking for it becomes very easy to move from maker to maker.

By the same token it is easy for very popular makers to sell to every dealer out there. However, those makers are a small percentage of the makers out there.

As Josh and Nick pointed out dues have to be paid. Nick also came to the realization that pricing is a long term strategy that has to be addressed. Congrats Nick you have broke the code early on.

WWG
 
Makers should NOT discount their knives to ANYONE...Makers have to look at themselves as the manufacturers...they are {should be} selling their knives at "DIRECT" prices to begin with...Selling your knives at a discount to "ANYONE" destroys your secondary market...
 
DWinkler said:
Jerry makes a point about “making enough knives but not to many”. This brings up an interesting point about future collector value and the secondary market which is so important to the success of a knifemaker.

Example:

Knifemaker #1 makes 25 knives a year and sells them all. Most likely he will sell to about 18 different customers. 7 buyers collect his work and buy more than 1 piece. He has from this year about 15 real collectors of his work.

Knifemaker #2 makes 50 knives the same year and sells them all. Most likely he will sell to about 38 different customers. 12 buyers collect his work and buy more than 1 piece. He has from this year about 32 real collectors of his work.

My point is Knifemaker #1 has 15 collectors out there looking for his knives on the Internet, at shows and with dealers besides buying directly from the maker. Knifemaker #2 has 32. Which is better. The more exclusive knives from maker #1 or the larger collector base of maker #2.

I have been making as many knives each year as I possibly can trying to increase that customer base. I probably made about twice as many last year as Jerry but I imagine at a much lower average price point.

Daniel
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WWG and Kevin,

I have come to value your opinions. Dealer views and collector views are important to makers I would really like your comments on this subject. I hate to be pushy but I think this is important to many makers.

Daniel
 
supsme said:
Makers should NOT discount their knives to ANYONE...Makers have to look at themselves as the manufacturers...they are {should be} selling their knives at "DIRECT" prices to begin with...Selling your knives at a discount to "ANYONE" destroys your secondary market...
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How does the maker discounting his/her knives to dealers destroy his/her secondary market?
 
Kevin,

Don't even bother with supsme.

He has no clue what he is talking about.

He didn't do his homework, lost money on knives he sold. And as one of the sheeple who joined in the "wussification" of America he wants someone else to blame.

What he wants is the makers to charge one price. Then the dealers have to mark up the knives. So if he never buys from the dealers, in theory he should never lose money on his knives.

Why he lives in America, he doesn't understand the concept of a free market and free choice.

WWG
 
Kevin...
Maker goes to a show with 6 knives. He sells 3 of his knives to customers for $500. each...At the end of the show he sells the 3 remaining knives to a dealer for $1000.
Let's say 6 months later one of those $500 customers wants to sell the knife...he calls a dealer and asks how much his knife is worth...since the dealer purchased his 3 knives at $333. each, my guess he would offer about $250.
Everytime he discounts his knives to "ANYONE" he is lowering the bar on his prices in the secondary market...Makers {especially newbie makers} must limit supply and look to price knives at "DIRECT" prices...LOW...LOW...LOW... and move up slowly...Dealers should stick to the "INSTANT GRATIFICATION" market. if they don't like that...TOO BAD...
 
Les...Let' see...
Me...I do $16M in business a year... Have 14 employees...
You..."It's really hard having $40K to $100K of knives in inventory" and "the price is the price only when it's not the price"...You preaching business to me?
More nonsense...
 
supsme said:
Dealers should stick to the "INSTANT GRATIFICATION" market. if they don't like that...TOO BAD...
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Actually no, dealers should do business in any way that is honest, ethical and produces the necessary profit to maintain the business. If you have a problem with makers that sell to dealers for a discount, and a problem with dealers asking for a discount then you not should buy from those makers and dealers. I really doubt that any of those folks are going to model their businesses based on your recommendations. Nor should they.
 
So....help me to understand this. If dealers can not buy at a discount, they don't make money on the knife if they plan to sell at the maker's price. Now I am discounting the notion of how the discount would be offset by the fact that I wouldn't necessarily have to spend $1000 a month on a 4 color 1/6 page in in Blade right away if Mssrs. Robertson, Neal, Russell, Ellis et al suddenly developed brain tumors simultaneously and, in there diminished capacity, decided that they just HAD to have the next 50 knives that I make.
What are we left with? Option one is no dealers. Option two is fewer dealers who are now "super flippers" in that they only by highly desirable unobtanium alloy knives from only the top makers and sell them for more than the maker's current price. Where does that leave guys like me and, dare I say, guys who are a lot better than me who are perfectly comfortable with the arrangements they have with dealers? The dealers may, to some extent, make the market, but nobody is holding a gun to the makers' heads forcing them to sell to Les. I would argue that IF a knife has substantial value in the secondary market, you probably won't need to sell it to a dealer anyway. What dealers do for customers is to allow them to buy knives that they otherwise either would not be able to buy or would have to wait a very long time to get from the maker. What dealers do for makers is give them a "turn key" solution for selling some of their knives AND,more importantlyu for someone like me, hopefully get my name out there. Dealers do what they do because there is a demand for their service boht fromthe maker and from the customer........nuff said
 
Keith...Makers for sure and I think most collectors would like to see prices move up...If a maker discounts knives to dealers it keeps the Makers prices down... with very few exceptions Dealers have been controling market prices for years...And the Makers secondary market takes a huge hit.
Dealers can do whatever they want...It's the Makers who need to try harder to make sure they are contolling their own prices...
 
DWinkler said:
Jerry makes a point about “making enough knives but not to many”. This brings up an interesting point about future collector value and the secondary market which is so important to the success of a knifemaker.

Example:

Knifemaker #1 makes 25 knives a year and sells them all. Most likely he will sell to about 18 different customers. 7 buyers collect his work and buy more than 1 piece. He has from this year about 15 real collectors of his work.

Knifemaker #2 makes 50 knives the same year and sells them all. Most likely he will sell to about 38 different customers. 12 buyers collect his work and buy more than 1 piece. He has from this year about 32 real collectors of his work.

My point is Knifemaker #1 has 15 collectors out there looking for his knives on the Internet, at shows and with dealers besides buying directly from the maker. Knifemaker #2 has 32. Which is better. The more exclusive knives from maker #1 or the larger collector base of maker #2.

I have been making as many knives each year as I possibly can trying to increase that customer base. I probably made about twice as many last year as Jerry but I imagine at a much lower average price point.

Daniel
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DWinkler said:
WWG and Kevin,

I have come to value your opinions. Dealer views and collector views are important to makers I would really like your comments on this subject. I hate to be pushy but I think this is important to many makers.

Daniel
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Daniel, IMO the most important point is that both makers 1&2 are selling everything they make. That’s a good thing in that as long as they are selling everything both maker’s knives will most likely continue to appreciate on the secondary market. However there is a risk that maker #2 could “over make” his market causing his sales to decline thus prices to fall.

The “too many / too few” dilemma of knife production is as narrow a line for a maker to walk as “too high / too low” pricing. A maker makes to few knives and he can become too obscure and lose notoriety or buyers. Too many and he will over saturate his market causing sales decline and prices to fall.

Interesting that you are asking these questions as I feel you are less affected by these production/price dilemmas than most makers as you and Karen have basically carved yourself out a nice little nitch which helps to insulate you. Kind of a captive market. At times, I will see any of several on-line dealers that carry your knives post 3-4 of your pieces at a time and I will wonder about over production, however a few days latter they are usually gone.

On a related subject, the internet dealer can be a double edge sword for the maker, as if the dealer is moving your knives life is good, but when they slow down it’s painfully obvious to everyone. I have about 8-10 websites I follow on a daily basis to keep track of knife movement, giving me a very good indicator of what makers are hot and whose not.
As you know, It’s very damaging for makers and his collectors to have unsold knives lingering all over the internet.

But back to your original question, As a collector I favor maker #2's method for as long as he monitors and contols grow and production his market is expanding by increasing his collector base.

The way you and Jerry promote your business and the industry in general allows you to grow your markets somewhat without increasing your production. You can just get more for your knives.

Hope my rambling helps.

P.S. the fact that you value my opinions is quite a complement and honor as you and Karen sold me my first ABS forged customs and started my learning process by our conversations.
 
supsme said:
Les...Let' see...
Me...I do $16M in business a year... Have 14 employees...
You..."It's really hard having $40K to $100K of knives in inventory" and "the price is the price only when it's not the price"...You preaching business to me?
More nonsense...
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I hate to doubt you sport, but I find it hard to believe that you own and operate a business.
 
jdm...
Price your knives...at so called "DEALER PRICES"...LOW...LOW...LOW... to "EVERYONE"...make your knives the best value in town...don't make too many...Sell at "ONE PRICE AND ONE PRICE ONLY" if you don't sell them your price is to high...and that's a major problem...so make sure they are a "BIG BARGAIN"... and then if your work is any good you can start to move prices up...It's the quickest way to succeed...
 
Kevin...
I finance Exotic/Collectable cars. And as fas as your Ferrari vs. Corvette discussion goes...It's like comparing a William Henry knife vs. a Ron Lake knife...I would think they cut about the same...but just a LITTLE different...
 
supsme said:
jdm...
Price your knives...at so called "DEALER PRICES"...LOW...LOW...LOW... to "EVERYONE"...make your knives the best value in town...don't make too many...Sell at "ONE PRICE AND ONE PRICE ONLY" if you don't sell them your price is to high...and that's a major problem...so make sure they are a "BIG BARGAIN"... and then if your work is any good you can start to move prices up...It's the quickest way to succeed...
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I have sold a grand total of 3 knives. There are another 75 or so languishing i the county dump and I have a couple around as "shop knives" and one went out in a KITH. The upside of waiting so long to actually seel was that all of the knives that have gone out have met with favorable review as opposed to scores of "pukey" smileys posted on the forums....lol. For argument's sake, let's say, as a part time maker that I can make 40 basic, but good knives a year. Right now, I can get $175 for a hunter and $300 for a bowieif the fit and finish is up to snuff. Say I make 25 hunters and 15 bowies for an average price per knife of around $220 Back out $35-75 for sheaths. I can't sell all of those knives to the same small group on the forums and at the local show. The cheapest little 1/12 page black and white ad in the "Blade Shoppe" section of Blade.....you know.....the section that is not on the same page with the editorial content that is what folks buy the mag to read......would cost me $170 a month or $2040 a year, if my math is correct. That works out to around $51 per knife, right? Now let's say that Les takes a liking to me because I remind him of a mutt he had as child or something and buys 10 of my knives. Lets say he buys 6 hunter and 4 bowies at a 30% discount and promotes them and they actually sell. That means that I give up $875, which, spread out over the entire 40 knives is around $22 per knife. Assuming that, at this point in time, I can only do one or the other, which should i pick? A small ad in Blade that will get lostinthe shuffle or the reputation, infrastructure and tacit reccomendation of a well know, established dealer?
 
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