Do knife consumers really understand prices?

Mar 14, 1999
As a hobby knife dealer, I'm seeing more and more where the buyer is expecting to pay less than wholesale for a particular knife.
Any ideas on what might be causing this? The online auctions? Intenet sales? Maybe just lack of awareness? I think they just don't know what the knife costs a dealer. It's very frusrating when people offer you less for a knife than what you paid for it! How can we reassure them that they're getting a good deal?
You say you are a "hobby knife dealer". What is that? Someone who just sells knives for fun? If so, then YOU and other hobby dealers ARE the problem.

Let me explain. I am a knife dealer in southern California. I don't have another job to pay the bills and subsidize my inventory. I have to charge enough for the products I sell to not only buy more stock and meet business expenses, but to also buy incidentals, like food and pay the mortgage, etc., etc.... This is not a hobby, its my livelyhood.
You're right when you say customers don't know what a knife costs a dealer. Why should they? With the WalMarts and Costcos and other discount stores out there, not to mention mail order catalogs and internet dealers, convincing buyers that if they pay serious money for a product, they are getting ripped off, its no wonder that they beat you up on prices.
Too many buyers think that if you make more than ten bucks on a knife that retails for $200.00 they are getting taken advantage of. No retail business can survive on that kind of margin with individual sales. The problem is the customers don't care, as long as they get the lowest price. (I think that is where the old fable about killing the goose that laid the golden eggs comes from).
It gets worse when "hobby dealers", such as yourself, decide to jump into the pool and play with the sharks. Overhead is low when you start so you figure you can maake it on a slim margin. You see the competition and tell yourself that you can match it or even beat it. By the time you realize that you are losing money, it is too late to recoup and, since its only a hobby anyway, you cut your losses and go on to something else. Behind you is a wreck of super discounted prices and a market that has been totaly destroyed for legitimate businesses. You are just getting into the mess at a time when those before you have already done the damage.
I suppose that I have totally pissed you off by now and I don't mean to, really. I don't know you and you are probably a nice person. I don't even begrudge you the right to do what you are doing. It's still a free market out there and you have as much right to try and tap it as do the rest of us. It just struck me as strange that someone, doing what you are doing would be so surprised at the situation.
If you are serious about your business, you have to control it. You say that customers are offering you less and less for your knives. Aren't you setting your prices? You know what you have to make to stay in business. If you let your customers set your prices, you will be paying them to take your stuff. Set your prices and stick with them.
The first thing you have to understand is that you aren't going to get ALL of the buyers out there. Don't even try. There are enough buyers out there for everyone.
Customers are loyal to dealers they like. The good dealers, the successful ones, provide more than products and prices. They build relationships with their clientel. Its ok to give deals and discounts, but reserve them for your best customers, and don't advertize the fact that you do that. Word will get around, and when it does you will find that you have more people coming to you. When you do discount, don't go below your break point. You have to make money on everything you sell or you will fail.
Your core clientel will be small but they will draw others in for you.
Don't advertize that you have the losest prices in town. You don't. Someone will always come along and beat you.
Don't gouge your customers. They will know if you do. They aren't stupid. As a business, you live and die by your reputation.
Make friends with other dealers. Even though we are in competition, we don't all hate each other. You would be surprised at how much information and advice you might get. (Maybe even more than you want
If you carry a line, carry the full line, or at least a large majority of it. Nothing turns a customer off more quickly than to come in or call looking for a certain model and have it not be in stock or not carried. if you advertize yourself as a knife dealer, make sure you have KNIVES. Inventory is everything in retail. If you don't have it they won't come, to paraphrase an old movie line. You won't make it if you just try to carry the latest and greatest new cuttenstabber. It changes, sometimes overnight. You will chase the market right into bankruptcy if you try that.
I could go on, and on... but its late and I have to go in to the store tomorrow. I'm closed on Mondays, but I have to go in anyway. Bills to pay orders to fax, etc., etc.
If you haven't gotten angry and cut this off by now you have probably figured out that what I'm trying to get across here is that business isn't a hobby. I read your frustration with the situation and I understand it. Imagine mine. Like I said, this is my livleyhood. It is frustrating when a customer shows me a Sportsman's guide or Cabela's catalog or a printout of a web page showing prices sometimes 20 or 30% below mine. After I explain that I can't meet that price they either go away or they buy from me. The thing would be surprised at the number of people who do buy.
Good luck in your hobby or business or whatever it is. As I said earlier, you have a right to try, and if you succeed, then good for you. There's always room for one more.

Make lots of money

Isn't it amazing how 2 cents worth of opinion takes up a quarter's worth of paper???

I think this problem lies in almost every business in the world...people start doing it as a hobby or for make a few extra bucks...then they realize that its not worth it unless they make a real profit... i tell people who ask me to teach them how to make knives..."WHY?" and the standard reply is ...not to make money...its for me and my friends....i sit them down...make a list of all the equipment they long its going to take them to learn....that they cant eat the knives they are learning on, and tell them the bottom have to make it a business...or dont do it at all... its like that in every area of life.... but at the same time the established people will have to continually deal with the newbies who are willing to do it for cheap until they wise up or quit.....
Sometimes it's actually harder to make a profit if you are Not a "full blown dealer".
It's kinda like getting a used car, if you buy from an individual you expect to pay a much lower price, go to a "full blown dealer" and you know that the price will be higher but (most dealers) will stand behind their products .

Ever notice people will try to deal in real small shops, but walk into the larger stores and people don't even think about it. Probably don't want to be laughed at by the person behind the counter.
I have figured out a few things:
I have to think about how much I want the knife to be willing to buy it.
I prefere the small shops because the people are nicer there and they actually talk to you
customer service is the buying factor, if I see the same knife where the owner is an ******* and is charging less for it, I will go to the people who are nice to me but charge a litttle bit more.

well that is my 2 cents worth

Mr. Wright,
Don't worry Dennis, I don't take things to heart. Gun dealers have felt the way you feel, a long time, about so called "hobby" dealers. Yes, I do sell knives for "fun". I enjoy the knives and the people. Any thing you do you should enjoy. If I didn't already have a career, a child in college and an empty savings account, I would love to jump into the knife (and gun) business full time. But I don't. Unfortunately for you, the wholesalers low minimum order requirement, and the internet, make it possible for anyone with a couple of hundred bucks able to start selling stuff online. Not just knives, but almost anything. And I think your right, the influx of sellers has hurt the overall profit margin. But I don't think you should blame the beginner knife dealers, it's just a sign of the times. The WWW has opened up and given you hundreds of new competitors, but it has also given you thousands of potential customers. Try to tap into that. I try to give customers a good price on a knife they want. I've met alot of nice people, helped some people, and I've learned alot. That's what lifes about. Remember, alot of full time business's today started off as a part time (hobby) business.
We all need to stick together, exchange ideas, and help each other out. Good luck to you and yours and take care.

Joseph King

P.S. Reminder to everyone. If your not a member yet, join the AKTI today.
You may have gotten the wrong idea in my post. I'm not blaming you or any of the hobby dealers for the market situation out there. That was just my assessment of the situation. You sounded pretty frustrated and I thought it might help to put things in perspective a bit. Not blame, my friend, just observation.

Heck, I started the same way. I wanted to have something to do on the weekends when I retired from the Navy. I had no idea that it would take over my life. I gotta tell you the learning curve is pretty steep in this business. 40+ shows per year and a storefront with one full timer (me), and one part timer (my wife) is quite a load. It sure ain't no hobby any more. I sell guns, too, in the store, and that market is even worse. It's a tough world out there ain't it.

I wouldn't be doing this if I didn't love it. I have met the greatest people in the world and have really gotten into a very interesting and fascinating field.

I don't make a huge living doing this. I'm certainly not getting rich. I will keep the shop going as long as there are customers who would rather buy this way than on the 'net. There will always be walk in business and I will be here to provide for it. The shows will die out in a few more years, I believe. At least here in California. Stores and the web will be where the buyers go. I'll be satisfied with my share. I learned a long time ago that I'm not going to light off the world. I'm not even trying.

No offense intended.


Isn't it amazing how 2 cents worth of opinion takes up a quarter's worth of paper???

[This message has been edited by Dennis Wright (edited 08 June 1999).]
None taken Dennis,
Geeesh! Your trying to sell knives and "guns" in California? Your a braver man than I. I'll say a prayer that you survive your state legislators. Vaya con dios, my friend.