how do you makers figure out prices to sell blades at?

J

jack76

Joined
Nov 12, 2005
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41
I was just wondering how everyone goes about figuring out what to charge for a particular knife? By the required amount of hours it takes to make the blade? materials? skill involved? What? :D Share share share!
 
There was a good formula that gave a decent way to price knives a while back.
Something like [(hourly wage)x(hours worked) + materials cost] x 1.2= final price.

Personally I think that is a good base but you should also include 5$ per hours a powerhammer or press is used to cover replacement parts and fuel. Then take your final price and judge the quality of the knife, I have sold a knife with $70 in materials and over 30 hours of work for only very little because I felt it was not on par with what it should have been.
Also it depends on what you do knifemaking as, hobby<part time<full time sole income. This tends to be the hourly wage part of the equation.
 
That formula looks like the one I use, but I have shop rate, not hourly wage. my shop rate includes my wage, and expenses such as fuel, electricity, insurance, etc. the monthly overhead costs are added up and divided by 120, that being the time I spend in my shop on a regular basis.(it would be more, but I spend a lot of time on the road instaling piping) That formula works well for me for any of the branches of my shop, bladesmithing, blacksmithing, and welding.

Ken Nelson
Iron Wolf Forge
 
When doing cost analysis try this:
Add the yearly cost of every expense EXCEPT the materials. Belts, shipping, electricity, supplies, small tools, etc. Divide by a base number of hours; 500 for about 10 hours a week in the shop,1000 for 20 hours ,2000 for full time. This is the hourly cost of the shop. For some it is only $2-3, for others it is $10-15.
Add up major tools specifically used for knives, and divide by the above base number, then divide by 5. This is a five year amortization amount reduced to an hourly rate. It might be between $1 and $5 for some and $10-20 for others.
Figure a practical rate for your skill level; $8-10/hr for a moderate new maker, $15 for a fairly good one-two year maker, and upward depending on your level of name recognition and expertise. About $25/hr is the max for most skilled folks. Add the three together and you will get a realistic value of an hours work in your shop.
Multiply this hourly rate by the number of actual work hours done on the knife (not how long you spend in the shop).To this you add 1.5 to 2 times the materials used.

Most folks will be shocked at the number. If they spend 5 hours making a modest knife it would make the knife cost from $100 to $500, depending on how much stuff you own, and who you are. A knife that took 50 hours would be ridiculously priced. If that knife was made by a well known master smith, then $1000-$5000 is reasonable, but not for most of us. Most will pick a reasonable price below the calculated amount.

Most of us accept that we are doing this for fun and any profit is a bonus....if there is any.
This is why it is hard to make a good living as a full time maker. For a full timer,it is easy to spend 2000-2500 hours a year in the shop. It is harder to get $60,000 to $100,000 in knife sales from the resulting output. Plus ,a full time maker has the cost of the building, phones, insurance, travel,etc.......to add to the expenses. When all is said and done ,many full timers don't make what a McDonald's hamburger cook makes.
Stacy
 
Take your price of materials, and triple it or quadruple it. If you are en established maker or a JS or MS then you can add atleast $1,000:D.
 
you might start at just recovering cost of materials plus shop tool wear and tear. Shop wear might be $5 to $10 per knife.
I figured a knife with fancy wood handles/sheath/belts/heat treat/steel/misc cost around $55 to $75 a few years back. It probably still is around that.
After you sell a few recovering cost, figure out how many hours on the average a knife takes to make and pick a dollar amount to make per hour to add on above the cost of the materials. You might begin around $3 to $5 an hour starting out. Gradually raise your rates per hour as your quality improves until you hit a point where you end up with a bunch of knives on hand that aren't selling in a satisfactory length of time - for you. You then either need to back off on your hourly rate or improve the quality of your knives to justify the higher retail. The market is fairly efficient that way. It's easy to rationalize raising your prices but a drawer full of high priced knives that aren't selling don't pay the bills. If you find your knives aren't selling at a certain price level, you have several options. Lower your prices, improve your quality, improve or change your marketing or change the type of knives you make.

If you are exclusively internet sales then you need to invest time and effort into photography and a decent web site or you will never sell your knives for what they could get. Several years ago, I was looking for a way to get out of making sheaths for each knife. (I find sheath making much harder than making knives.) I can't recall who answered this but I do recall the answer, at a knife show, two different knives by different makers can be very similar so the buyer will always pick the one with the nicest sheath. So that add's sheath making as a way to up the value of your knife and make pricing even more complicated. Occasionally it is nice just to hire out the sheath making to one of the pro's like Sandy Morrissey and be done with it.

There is one downside to knife making right now. There are millions of baby boomers just getting ready to retire and thousands of them are getting into knife making and wanting to make money from it. On the upside, there are millions of baby boomers getting ready to retire and have lot's of disposable income to spend on themselves and it might as well be on the knives you make.

just points to consider and you certainly don't have to agree with any of them...
 
:confused:Here's my formula, been using it for years:

Calculate the cost of materials in a knife, multiply by 5, divide by two. Subtract that from the total remaining in your bank account and kiss it goodbye ... yup, that's about right!:eek::(:mad::rolleyes::barf::o
 
try this,go to the local machine shop and ask them what they would charge to tool up to make all the parts and them what the parts would cost along with what they would charge to put it together....Thank them,go home and figure you might get a quarter of that price and then cry..lolol....Seems that our antique to modern machine shops at home are not worth what the guy in town gets for some dumb reason...As I have heard for years "Dont quit your day job"
just my own dumb thoughts...
Bruce
 
As a part timer, I can't tell you how to price things from a businesslike point of view. What I will say is make as many knives as you can and sell what you can for what people will give, give away more than you want to friends and relatives and generally work on refining your skills. As you get known for what you make the prices you can sell for will rise.

As with any craft, only the best and luckiest part timers will make a good return on their labor. Some of these will make the grade as full time professionals.
 
The are only two real figures involved

I figure that I want X for the knife
Someone figures he'll pay X

When X=X the figuring is now complete.....Simple :)
 
Charge the most that someone will give you. Dont underprice your knives.
You know if they are on par with what others are making. find an established maker that makes knives close to the style and quality that you make and see what they charge.
Start there.

When your first starting out, the amount of time it takes you to make the knife is irrelivent to what you should charge.

When I first started making knives it took me forever to grind that Bowie knife that I started out making into the 2" caping knife that I ended up with. Should I charge more because it took me forever to make it?

Buyers pay for the end result, not the amount of time it took to get there.

It also doesnt hurt to invent a tool and sell those to suppliment your knife making income.:D
 
I generally put knives I have made already out on my table at what I think the market will bear plus 10%. If I am taking an order for a custom piece I charge materialsx1.5 (waste cost of stocking, handling, etc.) + estimated consumables + hourly at $20.00/hour, same as I do with my jewelry work. Currently my table pieces seem to sell well at $150.00-$200.00. I probably make about $5.00/hour on table pieces, less actually now that I have started to make damascus, but while I would like to get rich doing this, I realize that it is just like the music business. I play music because I like to, sometimes I get paid for it.
Forging is a passion. I hope that I can get good enough with it that someday I can make a genuine business out of it like I have jewelry.

-Page
 
this is a subject to which finally got me off my hands and on the forum instead of reading. i am a part time maker and have used all the "formulas" seen on this thread and they all seem to work. after a recent show i didnt even get back to michigan and people had called friends and COMPLAINED about my knife prices being to low. i have paid very close attention to all that goes on around me as far as pricing, evaluating my knives fit, finish and all associated with a knife and settled on what i was comfortable with as far as pricing compared to other makers knives. i sold one knife to a customer and 9 to a dealer. so it wasnt like i was cornering the market with people standing in line to buy my knives. in my opinion i agree with the statement "you charge what the people will pay" i do not feel my knives are under priced by any means, but it is disturbing that my friends would get these calls and "I" never recieved one of these complaints. i think pricing will always be a hard thing to do when you are a new maker becuse you are not bringing knives to a show to "show" but hopefully being able to sell a few and get feedback from their use.
 
bergy-1 said:
this is a subject to which finally got me off my hands and on the forum instead of reading. i am a part time maker and have used all the "formulas" seen on this thread and they all seem to work. after a recent show i didnt even get back to michigan and people had called friends and COMPLAINED about my knife prices being to low. i have paid very close attention to all that goes on around me as far as pricing, evaluating my knives fit, finish and all associated with a knife and settled on what i was comfortable with as far as pricing compared to other makers knives. i sold one knife to a customer and 9 to a dealer. so it wasnt like i was cornering the market with people standing in line to buy my knives. in my opinion i agree with the statement "you charge what the people will pay" i do not feel my knives are under priced by any means, but it is disturbing that my friends would get these calls and "I" never recieved one of these complaints. i think pricing will always be a hard thing to do when you are a new maker becuse you are not bringing knives to a show to "show" but hopefully being able to sell a few and get feedback from their use.
Click to expand...


When a dealer buys 9 of your knives, that says one thing. He can turn them around quick for a profit.. That means your pricing them to low.
Check his website if you can and see what hes got them priced at. at the next show, charge the same.

Michael
 
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