Do you ever consider a knife's price vs. its cost to produce and sell?

S

Stahlmann

Joined
Jan 21, 2021
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Don't get me wrong -- I realize the relationship between the Cost of Goods Sold (COGS) and the sales price can differ wildly depending on the product. The COGS of a bag of rice at the local grocery greatly influences the price it's being sold for. On the other hand, the COGS of wholesale diamonds being sold by DeBeers doesn't influence their ultimate sales price nearly as much. I also understand it's in the seller's best interest to maximize their profit in most situations. I get all of that.

I was thinking today about The Opinel Model #13 -- the "Opinel Giant." It has an 8.5" (22 cm) blade made of 12C27 Sandvik Stainless Steel. A very simple knife, pretty much like most other Opinels. It's often offered for $99.99. Neat blade in some ways.

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I thought about the Giant Opinel (which I have long coveted for some reason?) while using my Bearhard folding hand saw with a 10" SK5 blade. It's a good saw. I sometimes carry it when I hike (so I'm not tempted to "baton" anything.) I paid $19.95 for it about a year ago. While the two instruments aren't really directly comparable in some ways, their COGS are generally comparable. I do wonder why Opinel charges 5X for its product? I suspect it's "because it can." That's probably the only real reason why I've never picked one up.

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Sometimes though, I find it disconcerting when the price of some knives, have such little relation to their GOGS. Not as bad as jewelry and the like, but still out of whack at times. Does anyone else here ever feel that way?

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I think it's important to factor in scale when you calculate COGS. Due to the giant Opinel being mostly a novelty item with more limited everyday utility (I adore this monster, but scaling up a knife designed to be the quintessential "cheap" pocket knife doesn't increase its base utility at the same level of said scale), I'm sure they are made in much, much smaller batches. Steel blanks that the blades are stamped from may be different sizes that what the more traditional lengths are stamped from and thus more expensive to procure. You also have to factor in tooling. It takes a long time to pay for that, and each knife sold probably a bit of that "tax" built into the price to cover the costs.

When you look at a folding saw, the scale of the utility goes up as the market is much, much larger. I am a knife knut of 35 years, but even though I like the gigantic twist lock and can afford one, I don't own one. I do own 3 or 4 folding saws though. Same goes with the majority of the consumer base. A blister packed folding saw can be sold at a lower pricepoint due to retailers purchases more of them in bulk as they will actually move off the shelves (and more KINDS of shelves: box store, sporting goods, farm and feed, etc). Thus, tooling and equipment expenses can be covered and paid off more quickly.

Even still, I totally agree that the giant Opinel has a good bit of "just because" built into the price. It's novel and well built. The market obviously supports its $100 price tag as you see it sold as such. Also, I'm sure Opinel doesn't NEED the revenue from it. It's a cherry on top sold to a very select group of knife buyers (ie us).

However, I do speculate that simply due to the scale of production and demand that true COGS isn't completely comparable to a folding saw when you get down to the dirty math.

Excellent thread topic, btw :)

I think it's important that we all look at what we are buying and understand why it costs what it costs as much as we can know. It gets tiresome to see threads where the basic premise is "Why mah knife cost so much?! Why come MAP? Price fixing! Grumble grumble CHINA! Capitalism ONLY!"

Lotta pieces and moving parts in our hobby. Both figuratively and literally ;)
 
great topic!

LionSteel is an excellent manufacturer that sells upper middle range knives (imo) for a very reasonable price,considering they produce in europe.

Emerson Knives seems to be a bit the opposite but from what i heard they improved their quality quite a bit lately.
 
I was thinking about this the other day when I was carrying my Buck 110.
Solid brass , ebony scales, includes belt pouch, made in the US and about $40.
I guess they sell many of them at a smaller profit, while they have other models with lower sales volumes and higher profit margin.
 
Typically I think when I see threads like this that the questioner is seldom in a position to know the COGS for a company or its product, so we can't really say whether the cost vs. price is excessive or not. Everyone just needs to look at what's being offered and what's being asked and make the decision for themselves.
 
Reminds me of the Buck 119 Special which can sometimes be had for $50, yet the much smaller 102 Woodsman is $60. Must be economy of scale.
 
Only if the knife in question seems highly over priced to me.
Too many times it seems the price includes a healthy premium for whatever name is stamped or etched on the tang.
 
For starters the metal for these things is lying around free on the ground. We should be getting the knives for no charge!

The customer is always right. That's what people like about us.
 
Danke42 said:
For starters the metal for these things is lying around free on the ground. We should be getting the knives for no charge!

The customer is always right. That's what people like about us.
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A guy hires a fellow to fix his furnace, the guy comes over, examines the furnace, takes out a hammer and smacks the furnace twice; it works and he gives the guy a bill for $50. The guy "says $50! You just hit it twice with a hammer!" The repairman says "it was $2 for hitting it, the other $48 was for knowing WHERE to hit it"
 
Don't get me wrong, steel can be had for little $$, and many knives do seem overpriced for what you get, but it's knowing how to make and heat treat blades that costs
 
madcap_magician said:
Typically I think when I see threads like this that the questioner is seldom in a position to know the COGS for a company or its product, so we can't really say whether the cost vs. price is excessive or not. Everyone just needs to look at what's being offered and what's being asked and make the decision for themselves.
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Agree generally. In theory, the Opinel in the OP could be hand-made, and its COGS would be higher than it's sale price.

Also, obviously, for all of us who own way more than a handful of knives, they are not tools but luxury goods, and priced accordingly, similar - say - to a Louis Vuitton handbag.

The only time high margins bug me is when I see regular steep yearly price increases, for a product where the COGS should have only been affected by inflation.
 
When making the decision to buy a knife, all that I consider is the price (including tax and shipping, if any) as it compares w/the MSRP/St Price if it is still a current model or the reported sales price in the 2nd market if not.

If I'm buying a new knife at retail, the COS is not my problem. It's the mfg's problem and if they haven't priced their product properly . . . oh well; they won't stay in business long if they don't.

Not looking to necessarily make a "killing" on any knife that I buy. I just want to buy it for a "fair price" based on the current market for it but, all other things being equal, cheaper is always better. ;)
 
JPD1998 said:
I was thinking about this the other day when I was carrying my Buck 110.
Solid brass , ebony scales, includes belt pouch, made in the US and about $40.
I guess they sell many of them at a smaller profit, while they have other models with lower sales volumes and higher profit margin.
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I think that shows just how much margin there can be in knifemaking.

In the case of the Buck 110 (and possibly the 119), I suspect Buck keeps it in continuous production. It's not produced in batches which is more costly. Both have great advertising value -- they introduce many to Buck, and they are purchased by veteran "knifers" as gifts. Both also raise Buck's overall purchasing levels, increasing their buying leverage, which allows savings to be passed on throughout their product line.

Finally they both allow for a product which can be prominently offered by huge retailers like Dick's, which is great advertising.
 
Darkhammersmithy said:
Don't get me wrong, steel can be had for little $$, and many knives do seem overpriced for what you get, but it's knowing how to make and heat treat blades that costs
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FWIW, many, many knifemakers send their blades out for heat-treating. In the case of Buck, they actually offer a heat-treating service for other knife makers.
 
sgt1372 said:
When making the decision to buy a knife, all that I consider is the price (including tax and shipping, if any) as it compares w/the MSRP/St Price if it is still a current model or the reported sales price in the 2nd market if not.

If I'm buying a new knife at retail, the COS is not my problem. It's the mfg's problem and if they haven't priced their product properly . . . oh well; they won't stay in business long if they don't.

Not looking to necessarily make a "killing" on any knife that I buy. I just want to buy it for a "fair price" based on the current market for it but, all other things being equal, cheaper is always better. ;)
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That's quite interesting... Whether or not a knife which is being offered for sale is priced at MSRP or the [current] street price doesn't mean all that much to me. The price could still be a ripoff.

On the other hand, the stated price compared to its actual cost of sales means a lot to me. That's what determines real value.
 
Darkhammersmithy said:
A guy hires a fellow to fix his furnace, the guy comes over, examines the furnace, takes out a hammer and smacks the furnace twice; it works and he gives the guy a bill for $50. The guy "says $50! You just hit it twice with a hammer!" The repairman says "it was $2 for hitting it, the other $48 was for knowing WHERE to hit it"
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Your example really doesn't apply in this case for the most part. MANY companies and individuals know how to make knives. There's nothing proprietary or magical about making most knives. Many, many entities have the wherewithal to produce knives like the Opinel #13.
 
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Quiet said:
So....all of them, then?
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Nah. For the most part Rough Ryder (excluding the "Reserve" series, which are out of my budget anyway), Marbles, Mora, Some Szco, Spiderco's Byrd line, Ontario's RAT 1 and RAT 2, the made in USA Sarge BSA Barlow, the CASE Sod Buster, and the Buck 110 are reasonably priced.

There are some "lowcost" knives/knife shaped objects that are over priced. The Gerber "Bear Grylls" ... ok .. most anything by Gerber ... and most of the Made in Pakistan or India Frost knife shaped objects would be over priced if they paid you to take them. Especially that Bear Grylls shi ... I mean crap.
 
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