Explain Limited Productions

ToddM said:
I see two types of limited editions, a truly new design, and what is more common these days, simply putting on a different handle scale and upgraded blade steel. Production cost/efficiency wise I'd imagine they are very different animals. Take the 801, or 0560 series, those models both offer high end limited editions and general production models, so you can make a case that much of the R&D/design/production/tooling cost is offset by sales of the general production model. Where a model like the 0777 was never put into mass production the costs of R&D, tooling, etc. were no doubt much greater per knife.

I'd bet most of those second type of limited edition knives sit in safes, or bought to resell at profit. When is the last time you saw a 0777 that looked like it had actually been used? How many "as new" hinderers show up for sale every day. No one would pay $600 for a CF/S90 PM2 if they could get them for MSRP, much less MAP. So that's a very small group of buyers compared to a $100-$200 customer base.

The second type is the ones that really baffle me. Take the sprint PM2's, Mule, there's obviously a HUGE gap between production and demand. The secondary market prices for limited/sprint PM2's are RIDICULOUS. There's no additional fit/finish quality, it's not a numbered series, all you get is a different color handle and upgraded blade steel, so the only additional cost to the company is obtaining/fitting/grinding better steel. That would seem relatively easy to increase production on, unless S90/204 etc. is really that hard to get a hold of in larger quantities and it may be. So production could be increased significantly, prices could easily stay the same or take a moderate increase, generating much more profit on that model. That would seem a win/win for the company, but if it were that easy they'd probably be doing it, although I think we're seeing some of that happening.....

On the positive side, I believe this issue has shown manufacturers that more people will pay for premium materials and we're seeing more knives with premium blade steel etc. being moved into general production (940-1, 0562CF, etc).

However, time will tell how that REALLY works out. Just because a knife is listed as "general production" does not mean supply will keep up with demand. It might end up like some of the limited editions, where they are not discontinued but no one knows when or if we'll see another batch, ala the PM2 M390, and rumor that the 940-1 will not ship more units this year. If that turns out to be the case, for the customer they might as well be limited editions because supply will be low, demand will be huge, and secondary market prices will still be ridiculous.
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Exellent post.

I always considered blade steel "super steels" marketing tools more than anything else...flavor of the weeks stuff to make sales.

All the old stuff has always worked fine for my needs.
 
Rev - thanks for that. It's an interesting business and one that seems hard to find analogues for. I am a fan of ZT and certainly don't intend to come off as critical of how they do things. I'm not personally too wrapped up in the notion of acquisition for its own sake. Some people want stuff just because it's hard to get. I understand that and it's ok with me. I just was curious what would motivate a business to intentionally sell fewer units of its widgets than the market wants to buy. I'm resolved to never really understanding it - and that's ok too.
 
HD - I remember reading a post from Thomas once where he said that to some extent production scheduling, complexity of the project, and machinability of the steel played a role in the number of pieces that were designated as limited runs. Being that production times are limited to specific hours, they need to continue producing the base models and fit the higher end items between those as possible. Also, there is no guarantee that all the LE models will be a hit and sell out fast. It's risky in this economy to put too many eggs in one basket as the risk of failure may outweigh the benefit of success.It is interesting though, I fully agree. It's an industry that remains somewhat under wraps to a lot of customers.
 
RevDevil said:
HD - I remember reading a post from Thomas once where he said that to some extent production scheduling, complexity of the project, and machinability of the steel played a role in the number of pieces that were designated as limited runs. Being that production times are limited to specific hours, they need to continue producing the base models and fit the higher end items between those as possible. Also, there is no guarantee that all the LE models will be a hit and sell out fast. It's risky in this economy to put too many eggs in one basket as the risk of failure may outweigh the benefit of success.It is interesting though, I fully agree. It's an industry that remains somewhat under wraps to a lot of customers.
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Exactly. Say they make $50 on every LE knife and $5 on every Leek. If it takes X amount of hours to make 100 LE knives but in that same amount of time they could make 2000 Leeks, then they are actually losing money but stopping production on them to make the LE knife.

Obviously that is a very extreme scenario but I'm willing to bet that factors into it.
 
Why would any automobile manufacturer endeavour to make a formula 1 race car?

It pushes the limitations of manufacturing and engineering.

ZT does this in spades with their LE knives, and some are lucky enough to have bought them.

Seems simple to me.

It was offered above; go to Blade - meet the people, make some friends, build relationships, then you might get a chance to get a LE knife.

You can't always get what you want, but if you try sometimes, you just might find, you get what you need.

best

mqqn
 
Showcase for design, materials, manufacturing and technologies which builds reputation and filters down to future regular production products.
 
I saw both the 600 and the 801CF very late. Too late to get either one. I won't pay inflated aftermarket speculator prices. There are no other ZT's I like right now so ZT lost two sales. Do they care, no. I'll move on to another brand.
 
Murindo said:
I saw both the 600 and the 801CF very late. Too late to get either one. I won't pay inflated aftermarket speculator prices. There are no other ZT's I like right now so ZT lost two sales. Do they care, no. I'll move on to another brand.
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House of Blades has the 0600
 
May I suggest a simple solution to this problem for companies that find themselves in KAI's situation.

For example, saw Kershaw announces the Tilt 2 at 2014 Blade Show. Better, cooler materials than the first, sure to be a sought after knife. They announce they will only make 300 of them. BUT to satisfy the demand, say for 72 hours have an open period where consumers place pre-orders direct with Kershaw. This knife recieves 4,000 preorders in this period. Thereafter, Kershaw will produce 4,300 of this new knife, perhaps selling direct to the consumer for MSRP but not an inflated aftermarket price. The original 300 announced knives (and any un-funded preorders) can go on to dealers for those who missed the 72 hour pre-order window.

The knife is STILL limited, since once the original run is made, that is it. So those who are new to knives and come into the hobby say a year after the Tilt 2 would still want to covet them, and be willing to pay the aftermarket price for them. But what this does, is satisfy the more hardcore knife community that wants to support the company and have an excellent/rare knife to show for it. Everyone wins in this case. People like us, who browse places like bladeforums can be sure to get in on the initial run of the knife. Problem solved.

Think of it as a "kickstarter" of rare/sprint runs of knives.
 
For some knives that might work, but look at the 0777 that due to production problems they did not even make the originally anticipated amount. Imagine the backlash if they took orders for 4300 of them and could not even produce 300!

I also wonder how many sales would be lost by people looking to flip limited editions if knife enthusiasts had unlimited 72 hour ordering, secondary market demand would nose dive. I know plenty of guys that order 4+ of the limited editions, sell all but one and the profits pay for that one, so they get a "free" knife. If the secondary market won't sustain that then the company looses 4 sales right there. Look at all the 801CF's hitting the marketplace/ebay/etc. right now that guys are flipping, or the multiple new Hinderers listed everyday. Hard to gauge how many that is, but I bet it's significant with many of these high demand limited availability knives. Don't get me wrong the secondary market prices annoy me, but my guess is it drives a lot of limited edition sales.

It's an interesting idea though, for knives that have less production risk it might work, such as say a sprint PM2 that you know is going to be a huge seller. The other issue is production time, those extra 4000 knives have to fit into the production schedule and there's no way to predict the numbers until the pre-order, and if they are complicated/super steel/ etc. they need more production time per knife, which means it could be wait times way over a year, meanwhile a lot of people with pre-orders are going to get pissed.

As multiple manufacturer reps over the years (going way way back) have alluded to knife enthusiasts make up a tiny percentage of sales for the big companies, and the bigger they get, the less it is, our desires are not the driving force in their profits by any extent and as a result upsetting a few of us has little impact on sales as well.
 
jeffsenpai said:
May I suggest a simple solution to this problem for companies that find themselves in KAI's situation.

For example, saw Kershaw announces the Tilt 2 at 2014 Blade Show. Better, cooler materials than the first, sure to be a sought after knife. They announce they will only make 300 of them. BUT to satisfy the demand, say for 72 hours have an open period where consumers place pre-orders direct with Kershaw. This knife recieves 4,000 preorders in this period. Thereafter, Kershaw will produce 4,300 of this new knife, perhaps selling direct to the consumer for MSRP but not an inflated aftermarket price. The original 300 announced knives (and any un-funded preorders) can go on to dealers for those who missed the 72 hour pre-order window.

The knife is STILL limited, since once the original run is made, that is it. So those who are new to knives and come into the hobby say a year after the Tilt 2 would still want to covet them, and be willing to pay the aftermarket price for them. But what this does, is satisfy the more hardcore knife community that wants to support the company and have an excellent/rare knife to show for it. Everyone wins in this case. People like us, who browse places like bladeforums can be sure to get in on the initial run of the knife. Problem solved.

Think of it as a "kickstarter" of rare/sprint runs of knives.
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So what happens when every other line at the factory has to shut down because each 'Tilt 2' takes 5 or 6 hours each to build?
 
Scurvy092 said:
So what happens when every other line at the factory has to shut down because each 'Tilt 2' takes 5 or 6 hours each to build?
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Charging an appropriate MSRP price for the knife would limit ridiculous preorder numbers and ensure profit. I am just throwing out ideas, attempting to balance out the demand from aficionados and flipper/resellers. Best idea ever? Of course not, but the brainstorming in threads like this may influence future behavior :)
 
jeffsenpai said:
Charging an appropriate MSRP price for the knife would limit ridiculous preorder numbers and ensure profit. I am just throwing out ideas, attempting to balance out the demand from aficionados and flipper/resellers. Best idea ever? Of course not, but the brainstorming in threads like this may influence future behavior :)
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I understand but I don't think KAI really cares what the market demand is. They know they will sell all of them no matter how many they make.

I think it's a simple formula. They have x amount of hours available in a certain window. The knife takes y amount of hours to produce. Divide them and that's realistically how many they can make without impacting other lines.

Not sure if brainstorming is that worthwhile. It's not like KAI has a presence here anymore.
 
KAI is doing this with the 562CF and 620CF. these knives will be full production runs and everyone who wants one should be able to get one.
 
The PR of making limited models is good for brand visibility.

From a historic perspective, I think numbers were limited partly because of limited materials being purchased in a sense that the viability of a limited run is not as great as prod, and sales are uncertain at a point in which one probably has to place full quantity order (and front that money) long before buyers even know of the product. Like 15 years ago, there just wasn't a demand for LEs in a fashion we see today. Forums, auction sites, the internet in general, etc. may have partly increased this demand, and possibly the use of newer, cool, interesting materials as well. Steel makers have certainly been busy making new cutlery steels, which may also contribute. I think in recent time tho, the demand for limited models has really been on the rise. Especially with ZT's more recent LEs, demand has simply been huge.

I would like to see many of these LE runs either result in production versions or just be larger runs with more accessibility. Limited or not, they are great carry pieces and once a very limited run hits the secondary market, the prices jump to a point in which buying one to carry/use is not nearly as practical.
 
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