Follow the Sheep Horn Fighter Thread

When calculating gross margin, the cost of the product also must include a percentage of expenses such as rent, utilities, salaries, advertising, and supplies such as paper, pens, invoices, etc. When you take all that into account, Mike would probably have to sell the knife for around $900.00 just to break even.

When selling the knife, if he takes a credit card, he will lose another three percent or so. It all adds up.
 
Hi Keith,

You are correct, it all adds up. I have found the only way I can do this for a living is to have a very short turn around time. This may be the biggest reason for value pricing.

WWG
 
Keith Montgomery said:
When calculating gross margin, the cost of the product also must include a percentage of expenses such as rent, utilities, salaries, advertising, and supplies such as paper, pens, invoices, etc. When you take all that into account, Mike would probably have to sell the knife for around $900.00 just to break even.

When selling the knife, if he takes a credit card, he will lose another three percent or so. It all adds up.
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Keith, you are correct that expences do add up for a dealer, however they are not calculated as part of Gross Margin.

Gross Margin (gross profit) is the margin between what you sell product for (gross sales) compaired to what you paid for it (cost of sales)

Expences as you describe above (operating expenses) are deducted from Gross Margin (gross profit) to determine Net Margin (net profit)

Didn't want to confuse :confused: the economics students out there.
 
Kevin Jones said:
Keith, you are correct that expences do add up for a dealer, however they are not calculated as part of Gross Margin.

Gross Margin (gross profit) is the margin between what you sell product for (gross sales) compaired to what you paid for it (cost of sales)

Expences as you describe above (operating expenses) are deducted from Gross Margin (gross profit) to determine Net Margin (net profit)

Didn't want to confuse :confused: the economics students out there.
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Ah yes, my school days are far behind me. It was indeed net profit margin that I was referring to.
 
Hi Kevin,

So you mean the profit that they make has to pay for all of their expenses?

So if your making 25% and you someone uses a credit card, now your only making 22%

I guess because factory knives give a 50% discount is this why so many "custom knife dealers" sell factory knives to?

:D

W
 
WoodWorkGhost said:
Hi Joss,

Mike @ RCK has always had an interesting "slant" on pricing. Give it a week, the price will come down and then the knife will show up on Ebay.

W
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I’m sure some of you have been chomping at the bit for a comment from me. I’ve been a member of this forum for sometime and don’t leave many posts because in my opinion most threads turn into a pissing contest :jerkit: which I don’t have the time or inclination for.

WoodWorkGhost, in your arrogance you make the assumption you know me and how I do business which is not the case. Your time would be better used taking care of your own business and what your customers think of you… Les.

In reference to the topic(s) of this thread, at the end of the day it’s all hot air, period. If I have knife that you want and it’s listed at price that you agree with, you’ll buy it. I deal with quality pieces and offer a service. That service consists of a variety of tasks just to get to the point of a sale. All I have to offer is service, to the seller/maker from whom I purchase to the buyer/customer to whom I sell, and to that end I have a number of happy makers & customers I work with where 80% of my business is to previous customers.

I see time and time again some trying to draw conclusions from one or two sales. There will always be the ridiculously low price on something and there will always be someone that comes out of the woodwork to pay a ridiculously high price for something. These kinds of sales tell you nothing because they are usually driven by people’s needs “at that time”. You have to use common sense and do your homework.

In conclusion, the Williams fighter is a quality knife by a respected Master Smith. Price other MS fighters and see where they are priced. Time will tell and if it doesn’t sell, it won’t be the first time I was wrong about pricing and probably not the last. For reasons stated earlier this will be my one post to this thread.
Regards,
Mike Gianlorenzo
www.rehobothcustomknives.com
 
Mike@RCK said:
the Williams fighter is a quality knife by a respected Master Smith. Price other MS fighters and see where they are priced. Time will tell and if it doesn’t sell, it won’t be the first time I was wrong about pricing and probably not the last.

Mike Gianlorenzo
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Well said Mike.
 
Hi Mike,

Basically your run a gun store or something like that and do knives on the side.

The arrogance you are speaking of is having been involved with custom knives for over 22 years. Not merely as a side line as it is for you. Mike do you really want to compare credentials? I didn't think so.

Mike the main reason you don't post is because of your limited knowledge of the subject matter of custom knives. Has nothing to do with threads turning into pissing contests. Few actually do. Of course if you follow these threads you know that.

Ok Mike, you price the Williams at $1,250 and someone buys it. How long do you allow them to trade this knife in at full price? If you don't have a trade in policy (which you don't have one in writing...like I do) then why is it you don't stand behind the knives you sell and makers your represent.

Now we will see who is full of hot air. Oh thats right you only post one time.



WWG
 
WoodWorkGhost said:
...Ok Mike, you price the Williams at $1,250 and someone buys it. How long do you allow them to trade this knife in at full price? If you don't have a trade in policy (which you don't have one in writing...like I do) then why is it you don't stand behind the knives you sell and makers your represent.
WWG
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This is probably the subject of another thread, but what, philosophically, is the value of a "trade-in" policy. I suppose this suggests a certain level of confidence on the part of the dealer (purveyor) in their pricing, bit it appears that only RCC and Bob Neal have this policy - there may be others, I don't know everyone.

From my point of view, there are the fast movers and the slow movers. The fast movers are the knives that most people want and bring quick money on the re-sell. They sell in about 2 hours on the internet. The slow movers grind along, waiting for the right buyer. If you are buying the fast mover, you are not going to trade it in, you are better of re-selling. If you buy the slow mover, I guess that a trade in policy maintains a relationship between the buyer and seller, but since the original purchase was presumably well considered, why would you need such a policy? It is not obvious to me.

As someone that spends plenty of time on the 'net looking a knives, I am pretty familiar with the vagaries and sales methodogies of said current purveyor of the knife in question and with all due respect to RCK, Les did in fact hit the nail on the head as regards RCK business practice, whether RCK likes it or not. If that hurts WWG's business, well I guess that is his problem. It never hurts to know your competetion, although there are limits I suppose.
 
Mike, I personally don't consider this thread to be hot air at all. It is educational and informative. Then again, I can understand why you would think it was hot air.
 
You are correct, it all adds up. I have found the only way I can do this for a living is to have a very short turn around time. This may be the biggest reason for value pricing.
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Yep. Thats a smart way to be in business. Almost a "just in time" method which makes a lot of sense..
 
I asked Mike about his trade in policy and he didn't respond. So I went to his web site and found out he does not have a trade in policy. Not only that if you return a knife this is what happens (note this is directly from his web site).

Returns​

If for some reason an item needs to be returned, the customer needs to contact Mike @RCK by email or Phone (508-252-4340). Every effort will be made to resolve the matter in a timely fashion. If a return is in order, the item must be packaged securely and arrive back at RCK in the condition it was originally shipped at which time a Refund in the form of a Credit will be issued. There are no returns for acquired pieces that are special ordered. Please see below for the explanation of a Credit.

Refunds, Returns, Credits and Return of Deposits​

When a refund is issued for a returned item, it will be in the form of a Credit minus any credit card processing charges, shipping charges and a 10% restocking fee. This Credit can be used to purchase other items on the RCK website. For returned deposits, a Credit will be issued that can be used to purchase other items on the RCK website.
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To his credit he is letting you know all this up front!

Amazing.

WWG
 
I must say that the RCK's "return policy" is very close to being a NO return policy.

Lets say I purchased the Sheephorn Fighter for $1,250, and decided that I wanted to return it for some reason. The first paragraph clearly implies to me that Mike must concur that my "reason" for the return is valid or the process comes to a halt right then and there.

In the event we agree to the return, I am on the hook for the safe return of the knife ($20), which I think is fair. However at that point my $1,250 purchase price is reduced by $20 for the outbound shipping cost, $30-35 for the Credit Card Fee, and a $125 restocking fee. This then translates into a $1,075 Credit for another item from his existing inventory (none of which, logically, was as desirable to me as the knife I purchased).

The bottomline is that I would have absorbed an almost $200 loss on a return, that Mike I were able to agree was for a valid reason. Also my remaining $1,075 is resting comfortably at RCK indefintely. While I hope, wish, or pray, for a knife that I consider to be equally desirable.

Additionally, RCK reserves the right to change any part, or all of their policy, with zero notice. Which in legalese means we will do as we please.

Caveat emptor!
------------

I did speak directly with Mike yesterday and asked him to read this specific post.
I have offered to correct any aspect of it, that he felt was not accurate reflection of his policy.
 
Mike at RCK puts his money where his mouth is.Thats why he has those knives.No big deal on return policies.
Just an opinion of a newbie collector.
Randy
Ps I think some of you have way too much time on your hands,from the topics I have seen lately on the Custom Knife Forums.But I guess it keeps the forums rolling along.Also just my opinion.
 
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