Economic effects on makers

sharpeknives

sharpeknives

Joined
Jan 13, 2006
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I have had a couple orders cancelled due to job loss. I don't mind a customer cancelling an order, it happens. Just seems to be happening at a higher rate lately. Would have been better if the knives weren't almost finished. As makers (and as a new maker) should I call or contact each customer to confirm the order as it comes up to be started? I know the economy has hit a lot of people hard. Just looking for input.
 
These are certainly hard times for most makers. Our income has always been based on others' disposable income, and if they don't have it, we certainly will not be getting any of it.

I don't mind telling you that my entire October income went out the window when two clients emailed and canceled their orders..... a total of 4 folders. I got pretty wrapped around the axle because neither client bothered to offer any explanation, just a short "Cancel my order".....and two of the 4 pieces were completed and ready to ship when the cancellations came in.

I had considered making a blanket policy on requiring a 50% deposit when I started an order, but have reconsidered, and have decided that should any of those who canceled orders ever wish to order again, I will require full payment in advance from those individuals.

As Makers, our income is always in flux, but loosing an entire month's income can put you in a difficult position. With the new government soon coming into power, I believe things will get much worse before they get better. I predict that the current, as well as the short term future state of the economy will eliminate a number of makers from our ranks, simply because folks do not, and will not, have the disposable income to buy knives..... but I also believe that those who can hold on, will come out better on the other side.

I tend to keep an eye on the internet, and have watch recently as a number of makers, who already offer very decent prices, have little by little dropped prices on knives that have not sold... that in itself is not a good sign.
 
I feel like I am in a good, and a bad, place for this. I'm on the lower end - I haven't sold a knife for $200 yet, but I generally get $100 to $150. So people who aren't having full scale crash and burns aren't going to hurt as much on one of my knives, but.... I can't drop prices *that* much without coming to a complete standstill on getting supplies.

I have definitely noticed a drop, mostly in the knives I make that are similar to existing styles- skinning knives, for example.

It's been hard enough that I'm behind on one order just because I had to wait an extra 2 weeks to come up with enough money to reorder some shop supplies. And I have only 3 orders on the board right now that aren't finished.

It's also hard because I've gotten firmly into that stage where i want to step up a level, and start putting the extra 4 or 5 hours into some of the knives and making the finish work really stand out. But I'm stuck because I just can't see people popping an extra $100 in right now. I've got these two dirk style fighters sitting on the bench not being finished simply because of that.
 
To my way of thinking if this crisis gets worse the demand of mid range knives will go down significantly (around 100 - 200 $). There will be always a market for high end knives above 400 - 500 $, and quality but economic models under 100 $ I guess...
 
Well, yes and no- there are quite a few knives in the mid range that custom makers are doing that production companies simply don't do. For those of us in that area, it's our biggest strength.
 
My knife making has been a hobby,that fortunatly paid for its self. Now that my day job is declining in pay -50K from last year almost 2/3. I have been subsidizing my income with my knives.Now thats starting to go down.
 
I have sold several knives over the last few months in the $125 - $150 range that would have easily brought $175 - $225 just a year ago. I have had to lower my prices a bit just to move the blades. Even at these prices, I have had a few folks contact me wanting to know if I would take less. I have decided that my stuff "Ain't Flea-Bay Items", and from now on, I will not even consider a "low-ball" offer.

I am thankful that I don't have to depend on knife sales in order to eat (or at least for now - who knows after January?). I make knives because I love making knives, and it keeps me out of trouble. I get my "high" when a customer is happy with his/her purchase (along with a cold beer now and then):D

Times are "TUFF", but it will come around eventually.......... it always does. I just hope I live long enough to see the turn-around.

Hang in there fellow makers.

Robert
 
I believe it is going to hurt many of the creative arts. I know that I think about what I am doing much more and how much it is going to cost me. I optimize my forge gas mixture to get the most out of a bottle of propane. I will probably have to put off doing some of the projects I had wanted to do just due to costs. Even knife shows may have to be minimized. This is a double edged sword, won't be selling as much there but will not be spending $$ to get there. I have seen an increase in some orders but I also will call a client just before I start the project to see if they still want it. If not then I can either make it and try to sell it or spend my resources on other supplies.
 
I agree that what people are willing to pay has dropped quite a bit based on the bids I am getting on knives I have auctioned....
 
To answer your question, I think giving the customer a call before you start the knife is reasonable. If nothing else, it gives him confidence you're on the job and a chance to start getting the money together if he hasn't though about it for a few months.

Times like this are where I feel most fortunate. I'm a very slow maker and don't depend on the income from knives for anything but keeping my handle material habit going. ;) And my prices are generally relatively low anyway I think, so I'm not being pressed to reduce them. But if someone did try that, I would certainly stick to my price. I learned from a great knife dealer that that's one thing that will help maintain the value of your work over the long run more than anything else. Once you start to lower your prices customers cannot help but begin to believe the value isn't there. I have faith that I am charging a fair price and have no reason to reduce it. I guess if I had a lot of unsold inventory it might be a different story. But I'm just too slow for that to happen. :D
 
Most of my knives are in the $100.00 - $185.00 range, and my sales have dropped considerably in the last year. I am lucky that I have a full time job, at least for now, and don't rely on selling knives to pay the bills, but as extra income. I also will not drop prices on my knives, if I can't make a little profit on them, I will keep them for myself. Supplies and shipping on those supplies really makes it hard to get below a $100.00 knife.
to answer your question, I do call a customer before I start a special order knife, then they have the opertunity to cancel before any work is done. J.D.
 
i would be upset that i have so much in stock right now sept i have a show in a few weeks and least i have a nice set of sharp things to put out
 
I sold 2 knives out of 8 that I took to Gembloux and none of the larger, more expensive ones even though everyone told me that my prices were VERY reasonable. They also told me that I did okay selling 2 compared to a number of other folks at the show. One has to wonder if the media will start crowing about the economy getting better now that the Evil George Bush is going back to Crawford or if they will still figure that misery sells papers/commercial time. Economics is considered a "science" by many, but a lot of it is still the science of mass psychology rather than mathematics. The one thing that I have learned from decades in and around the advertising business is that in lean times, you need to promote yourself MORE..........that is, unless you are actually planning on rolling over and dying. I just sent my two big stag Gembloux bowies to Coop. He is very busy and won't have them back to me for a while, but I figure that is not a big issue as I need to be more aggressive and good pics of the best pieces I have done to date will help much more than trying to blow them out at a bargain basement price.
 
Good post, Joe!

The media is a big part of the problem. It is bad out there but a lot of people still have a lot of cash. The media has caused most these folks to draw up their purse strings, real tight.

Shows were already on the decline before this hit and will just get worse.
The Blade Show in Atlanta does seem to be the one show that is immune from this.
A lot of buyers are just staying home but still buying knives.

Good news is, the higher end custom knife market is strong and doing well.

This will be interesting but I'm not too worried :)
 
I havent had any cancellations but have consigned two at a mall cutlery store and had a delay on one of the their checks that keeps bouncing and the second check never arrived. These are under $300 knives. The upper end knives and gun/knife combos are still strong and I have a comfy back log but new orders arent just rolling in either. I think its a good idea to stay in contact or at least call before starting a project that buys bread and milk.
Our son Mike is selling to the police dept locally and is doing well with the swat compact he makes. Notice those people have a secure occupations. People that know how to not get into debt will still buy knives.
 
Some good points above. Sometimes I harp on stuff too much but I don't think I can say often enough that good photography is the best advertising you can buy. Have someone like Coop take your photos; the people who do knives also generally submit the photos to several publications, and you never know when your work will show up in one of them. I don't know that this is true, but I believe that it helps editors select your photos if you subscribe to their publications. I can say that none of my photos have appeared in a magazine that I didn't subscribe to. Maybe I'm just superstitious, but I recently started subscribing to them all again... :D

My big takeaway from Don and Bruce is that the high end knives will probably always have a more stable demand. Those customers are just more likely to have disposable income than people like me. So I guess that means it will be a good investment if I really take the time to try to make the best knives I can make; make every one the best I can possibly do. Sometimes I'm too willing to knock out a "typical" knife without stretching my skills too much. That needs to change. I really need to start pushing myself and try to get good enough, both technically and artistically, to earn some of those sales to the "big guys." Besides, doing really fine work is satisfaction in its own right. Even trying to do fine work is satisfying. :)

Good thread, thanks!
 
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