How does GP Knives sell their stuff for so cheap?

[totaleclipse02]

Hey guys,

I'm new to this game, but I've noticed that on manufacturer's websites they have retail prices, but on the gpknives website, the prices are WAYYYY lower.

How do they do this, because from the comments it seems legit.

Thoughts?

 

[Cougar Allen]

Welcome to Bladeforums. Why am I wondering what your connection to GP Knives might be? Life is full of mysteries.

 

[totaleclipse02]

Welcome to Bladeforums. Why am I wondering what your connection to GP Knives might be? Life is full of mysteries.

Haha, I am in no way connected to them. I have been lurking the forums in the past week because my interest in getting a EDC piqued with the new FHM I recieved, which talked about the Lonewolf being the best folder.

I've been to the benchmade, spyderco, and lone wolf websites, which all sell to the general public.

I found out about gpknives here and was wondering why they were so much cheaper? Why would the retailers try to sell at the MSRP when there are authorized dealers out there selling for so lower?

That's all i'm asking!

 

[Keith Montgomery]

Gp Knives prices are no better than most and not as good as some other internet dealers. Their prices are really nothing special.

 

[ropey dope]

I think the general question behind this is: "How do some places sell things at less than MSRP without making a loss?"

Retailers make money on the difference between what they buy something for and what they sell it for minus overheads. If you can reduce cost and overhead then you can make the same profit for a lower selling price.

Next week, "Why is the sky blue?"

 

[Keith Montgomery]

I think the general question behind this is: "How do some places sell things at less than MSRP without making a loss?"

It actually looked to me to be more of a plug for GP Knives than a question.

 

[j.h]

If you go to the manufacturer's websites, you will see higher prices than any dealer. They can't undersell their own dealers or the dealers wouldn't buy from them. Spyderco, for instance, sells at retail. Most dealers have to sell below because there is so much competition.

Grand Prairie Knives is a good dealer. So is New Graham (Michael Dye in the dealer area). Both participate here, you should buy from one of the dealers who helps support this forum.

 

[Deadhead Archer]

It's because of a little mystery in life called "Wholesale vs Retail".

For an internet distributer, wholesale pricing is king (and distribution is on a much larger scale than selling out of a physical store - it just so happens that GPKnives does both). Of course, with online shopping you have to include shipping costs, returns involve further shipping expenses, you can't test drive what you buy, etc; but in most cases online prices will always beat store and MSRP prices.

 

[TakeUB(O)4rce]

I have seen 100s of legit looking places (1000s of not so legit individuals) light up the web with great prices on knives. They all do the same thing which is get a distributor catalog, scan in the pix to their website and then they start selling away on what they think they can order after they make the sale.

Some places are also pretty bold about saying they have things "in stock" consider if a 10,000 item places had one of everything on hand for order and the average cost into the item was $50 - they would have a $500,000 inventory of knives. Think of the space needed to wharehouse that - the insurance and then last of all the margins they seem to operate at.

Well what if two people ordered the same knife or one person ordered two? Then it wouldn't be in stock would it? OK maybe they have 3 of each - 1.5m in inventory? Are they just rich people with big knife collections or is all that running on a credit meter at 8 to 12% monthly? What happens if a new player comes in and takes all the business with good prices? DOes all that money just sit?

It's how the knife business works - new guys pop in all the time with lower margins. They don't do business cheaper than the last guy or have anything different beyond a new reputation. And as I have seen it usually is the last guy with a new name.

 

[JD Mandrell]

I have seen 100s of legit looking places (1000s of not so legit individuals) light up the web with great prices on knives. They all do the same thing which is get a distributor catalog, scan in the pix to their website and then they start selling away on what they think they can order after they make the sale.

Some places are also pretty bold about saying they have things "in stock" consider if a 10,000 item places had one of everything on hand for order and the average cost into the item was $50 - they would have a $500,000 inventory of knives. Think of the space needed to wharehouse that - the insurance and then last of all the margins they seem to operate at.

Well what if two people ordered the same knife or one person ordered two? Then it wouldn't be in stock would it? OK maybe they have 3 of each - 1.5m in inventory? Are they just rich people with big knife collections or is all that running on a credit meter at 8 to 12% monthly? What happens if a new player comes in and takes all the business with good prices? DOes all that money just sit?

It's how the knife business works - new guys pop in all the time with lower margins. They don't do business cheaper than the last guy or have anything different beyond a new reputation. And as I have seen it usually is the last guy with a new name.

Since this thread was started about Grand Praire Knives, as a longtime customer both online and walk in, I hope everyone understands that the practises described above do not apply to Grand Praire Knives.

 

[Danbo]

Since this thread was started about Grand Praire Knives, as a longtime customer both online and walk in, I hope everyone understands that the practises described above do not apply to Grand Praire Knives.

I have to agree with The Last Confederate here. I've been buying and trading with Mike and Grand Prairie for so many years, I can't even remember. ALWAYS, has the experience been positive. :thumbup: