How has your collection philosophy changed over time?

[Kevin Jones]

I'm very curious to know what thought process occur when someone tries to sell an "investment" piece, and it stalls. Sure it happens, but what's the next move. Try again elsewhere? Wait another year, or until an article appears in a magazine featuring that maker's work? Perhaps don't buy from that particular maker anymore? There is certainly something learned when investment pieces aren't moving at expected prices.

Bob

Knife values have up and down cycles just like anything else, obviously you try to buy on the down, sell on the up. IMO, as I said earlier, the secret is to choose the best method for selling first.

Sometimes you find yourself in an uncontrollable negative situation in selling a knife.
I have a very nice knife listed right now that I bought quite a long while back that has been for sale for about 2 years with no luck.
The maker made too many of this particular knife in a short period of time, so now the market is flooded with them. Dealers are offering them at maker's current prices, however they are not selling.

The worst way IMO to sell knives is to offer multiple knives at the same time. What do you expect when you see a sign at a retailer that says closeout, or liquidation? You expect to buy the items greatly discounted. Same thing with selling knives. Offering in quantities implies you are liquidating and will take less.

You will never know the savvy collector is liquidating until he is finished.

 

[Les Robertson]

Joss,

First easily 75% of the custom knives out there are overpriced. This occurs for two reasons, neither is done out of malice but of ignorance (not lack of intelligence).

1) The maker does not know what to charge for the knife.

2) The buyer does not know what the knife should sell for coupled with (according to a majority of BF custom knife forum contributors) that they don't care what a knife will do in the after market...They buy what they like.

Consequently, whether you try to sell the knife by yourself or work through a dealer you will probably lose money.

If you chose to consign the knife with a custom knife dealer you do so for the following reasons:

1) You don't have time to pursue the sale yourself

2) You cannot accept multiple forms of payment (this is especially important when dealing with overseas buyers).

3) You probably don't have a web site that routinely gets thousands of hits a day. As such your ability to reach buyers is severely limited.

4) You will not have the collector/buyer base that the dealer does.

The reason you are willing to consign your knife to a dealer is for ease of the transaction, minimal time invested, bigger presence in the aftermarket and ability to accept multiple forms of payment.

Getting less than what you paid for a knife was determined by (in most cases) the collector/buyer when they first purchased the knife.

I realize it is not easy. However, if you focus on the makers position in the primary market/after markets. As well look for knives with value you pricing. You will find that it is much easier to sell your knives in the after market.

That was probably my biggest change in collecting philosophy. Growing tired of losing money on every knife I sold. I started doing "homework". This allowed me to find lesser known makers who were doing great work at a much better price.

WWG

 

[jdm61]

Joss,

First easily 75% of the custom knives out there are overpriced. This occurs for two reasons, neither is done out of malice but of ignorance (not lack of intelligence).

1) The maker does not know what to charge for the knife.

2) The buyer does not know what the knife should sell for coupled with (according to a majority of BF custom knife forum contributors) that they don't care what a knife will do in the after market...They buy what they like.

Consequently, whether you try to sell the knife by yourself or work through a dealer you will probably lose money.

If you chose to consign the knife with a custom knife dealer you do so for the following reasons:

1) You don't have time to pursue the sale yourself

2) You cannot accept multiple forms of payment (this is especially important when dealing with overseas buyers).

3) You probably don't have a web site that routinely gets thousands of hits a day. As such your ability to reach buyers is severely limited.

4) You will not have the collector/buyer base that the dealer does.

The reason you are willing to consign your knife to a dealer is for ease of the transaction, minimal time invested, bigger presence in the aftermarket and ability to accept multiple forms of payment.

Getting less than what you paid for a knife was determined by (in most cases) the collector/buyer when they first purchased the knife.

I realize it is not easy. However, if you focus on the makers position in the primary market/after markets. As well look for knives with value you pricing. You will find that it is much easier to sell your knives in the after market.

That was probably my biggest change in collecting philosophy. Growing tired of losing money on every knife I sold. I started doing "homework". This allowed me to find lesser known makers who were doing great work at a much better price.

WWG

I know that a lot of you guys do a fair bit of "horse trading" to refine your collections. I have seen articles in magazines about some long time collectors who apparently never sell anything and have RIDICULOUSLY large collections of knives of every ilk. Wonder how many there are like that out there in the market?

 

[Les Robertson]

Hi JDM,

I think prior to the Internet there were probably a lot more huge collections. The Internet gave people access to knives they would have never been able o get at shows (to far to drive, etc.).

My experience has shown me that new collectors buy a lot of the same knife (this is especially true with folders). Then buy multiples from the makers they like. Then they start to sell those whose work they are no longer interested in or the knife no longer "fits" in their collection.

As time goes buy the collector becomes a more sophisticated buyer, has better knowledge of what to look for. The purchases become fewer but more expensive. Ultimately many of these collectors find a certain amount of makers or a style they really like and start working with the maker directly.

This further slows down the amount of knives they will buy and increase the cost of each one.

The great thing about a collection is that ultimately it is yours. Your collection should bring you joy and pleasure. I would add being able to move piece or two when you need or want to and get close to your money back (+/- a little) will increase the joy you have for your collection.

WWG

 

[Joss]

WWG, don't disagree with you but...

If you chose to consign the knife with a custom knife dealer you do so for the following reasons:

1) You don't have time to pursue the sale yourself

2) You cannot accept multiple forms of payment (this is especially important when dealing with overseas buyers).

3) You probably don't have a web site that routinely gets thousands of hits a day. As such your ability to reach buyers is severely limited.

4) You will not have the collector/buyer base that the dealer does.

Most of those can be offset by eBay. One that cannot be is the brand and trust collectors place in dealers (as opposed to buying on eBay).

 

[Starkman1]

Joss,

First easily 75% of the custom knives out there are overpriced. This occurs for two reasons, neither is done out of malice but of ignorance (not lack of intelligence).

I realize it is not easy. However, if you focus on the makers position in the primary market/after markets. As well look for knives with value you pricing. You will find that it is much easier to sell your knives in the after market.

That was probably my biggest change in collecting philosophy. Growing tired of losing money on every knife I sold. I started doing "homework". This allowed me to find lesser known makers who were doing great work at a much better price.

WWG

Les,
I have noticed this with the knives that sell on your website and few that have sold here, and that is what I may have been alluding to.

I will always have a passion for forged knives, and don't see my taste changing much, but I do see that its getting a bit more sophisticated.....and expensive. I've also been watching what guys like...if I may mention names...Mike Olive, Matt Roberts, and Sam Butler are producing. Their knives seem to move very quickly and I wouldn't consider them investment pieces like a Fisk or Dean (no offense guys if your reading).

So, I guess to a certain extent "value pricing" has influenced my philosophy and otherwise steered me away from a few makers, although I may have liked their work.

Bob

 

[Kevin Jones]

Joss,

First easily 75% of the custom knives out there are overpriced. This occurs for two reasons, neither is done out of malice but of ignorance (not lack of intelligence).

1) The maker does not know what to charge for the knife.

2) The buyer does not know what the knife should sell for coupled with (according to a majority of BF custom knife forum contributors) that they don't care what a knife will do in the after market...They buy what they like.


WWG

WWG, you have stated that 75% of knives are overpriced for some time, but if dealers and collectors are in fact buying them, are they overpriced?

When I say collectors are underpricing them, I'm refering to like new knives being sold for 10%-30% below the current maker's price. Just because they are not new.

 

[jdm61]

I only have 3 knives in general circulation and have sold only two, so i definately am in that "bottom 25%". But there are other makers with much more experience and a much better track record than I who are selling their knives at a price that is what I and many others consider to cheap. That may be good if you are a buyer, but not so if you are a maker. Maybe I am wrong, but this seems to impact what even well known makers can charge for certain types of knives. The materials cost and the work involved in producing a nice carbon bowie is not double or more than that of a hunter.
So the question is are the hunters and fighters at the $325-425 price level underpriced or are the bowies overpriced?

 

[John T Wylie Jr]

Joss,

First easily 75% of the custom knives out there are overpriced. This occurs for two reasons, neither is done out of malice but of ignorance (not lack of intelligence).

1) The maker does not know what to charge for the knife.

2) The buyer does not know what the knife should sell for coupled with (according to a majority of BF custom knife forum contributors) that they don't care what a knife will do in the after market...They buy what they like.

dealers dont play anywhere into that 75 % ??

 

[Les Robertson]

Hi Joss,

Good points. With EBay I believe there is a listing fee and a fee to be paid upon the sale of the knife. The offset for accepting payments would be done primarily through PayPal, which of course gets 3%.

All of these fees have to be paid and you will still have to take the photo, answer emails, watch the site, etc.

I agree that established dealers for the most part are the way to go. Yes, you will pay a fee, just like you would with EBay. However, you will have less time involved. I guess that is what it comes down to, what will you pay for the convenience of the sale.

Hi Bob,

It is exactly the value pricing that make makers like Olive, Roberts and Butler..investment grade makers. The value you pricing of their knives makes them competitive, creating a demand in the after market that the maker cannot fill in the primary market. This creates a situation where collectors will pay a premium for your knife.

When I first bought hunters from Sam there were $175.00 His price is now around $250. His work could have sold initially for $225, but he understood long term pricing. The knife at $250 is now worth closer to $300 - $325. Sam is now a JS and the $300 - $325 price range is correct for new JS makers. However, as with prior to becoming a JS Sam is once again offering his knives at a value price.

For some reason people seem to only want to consider knives they can double or triple their money on as investment grade knives. These are the same people who won't buy a lottery ticket because the pay out is only $10 Million!

If you bought a Butler Hunter 2 years ago for $175 and sold it tomorrow for $255 (below Sam's current asking price), you would make a profit of 45%. That is 22.5% each year for the last two years. Also, there are no Capital Gains taxes nor are there any management fees or broker fees. Even adjusted for inflation you are making 18% per year.

Yes, to do this requires homework. So looking at it from this perspective is a Butler an Investment piece?

Also, Harvey and Mr. Jerry have been at it a lot longer than Sam, Mike or Matt. Lets give them 15 years and see how they are doing.

WWG

 

[Starkman1]

Maybe I am wrong, but this seems to impact what even well known makers can charge for certain types of knives. The materials cost and the work involved in producing a nice carbon bowie is not double or more than that of a hunter.
So the question is are the hunters and fighters at the $325-425 price level underpriced or are the bowies overpriced?

I have often considered this as well. Is a Bowie thats sells for $1,000.00 vs a hunter from the same maker at $400.00 2.5x more of a knife? The only thing I can come up with is maybe the maker is charging/inch....uh that doesn't sound quite appropriate.

Kevin, what knife have you been trying to sell?

Bob

 

[Les Robertson]

HI Kevin,

If a knife is being sold at 10 -30% under current retail there could be several reasons for that.

1) The seller needs the money and knows if the knife is 20% retail it should sell quickly.

2) The knife is an older model. Maybe the maker used nickel silver or brass instead of the current stainless steel. Maybe the knife is marked with the date and you know it is 10 years old. Consequently, as we have discussed before some people won't pay current retail for a knife that is 10 years old.

3) The maker is not currently as hot as they once were.

4) Perhaps the maker has flooded the market with that model.

ETC.

I'm with you I have no aversion to a knife that is a few years old in mint condition. I do have a problem with knives using particular materials.

WWG

 

[Les Robertson]

Hi JDM,

In my mind the price a maker charges should be based solely on their position in the market. Sadly most makers and their collectors don't know the position and as such make pricing mistakes.

A Hunter from one of the top 10 guys in a particular market is going to sell for similar money to that of a Bowie from makers who occupy a position further down.

It is important to understand that Makers in the top 3 positions will influence what people will pay for knives made by a group in the next tier.

Bob Loveless gets a certain price. This allows Steve Johnson to get a certain price. This allows John Young to get his current price.

Jerry Fisk gets a certain price, this price will have an effect on the majority of the forged blade makers. NOT ALL.

Prices paid for Bill Morans work will also impact all of the forged blade makers.

You see this trickle effect in most areas of business.

What is something worth? What someone will pay for it.

However, a maker can market themselves so that what someone will pay for it may look like it is overpriced.

WWG

 

[supsme]

Consigning a knife with a dealer automatically means it's worth at least 25% less than what the customer is paying. I assume if the knife was worth the asking price -25% the dealer would purchase it himself.

 

[Les Robertson]

Hi John,

Of course dealers play into that 75%. That is why the majority of them don't have a trade in policy. They already know the knife is overpriced....which is why they don't want it back.

Just something to think about!

WWG

 

[Les Robertson]

Hi Supsme,

You are looking at only one side of consignment. Many dealers have long lists of people looking for certain knives. In many cases the dealer can get more for the knife than you could. As well they can get it quicker (Time value of money).

So if you consign a knife with me and I get more for it then what you paid for it. Do I get to keep the difference?

For my part I will only take knives on consignment that I think I can sell in a reasonable amount of time. I will talk with the consignor and agree to a price. If the knife is from a maker I work with I will not price the knife as to "dump" it.
As this may have a negative affect on that makers work. If the client wants the knife "dumped" I recommend another approach.

The knife is not worth 25% less. The knife is worth what it sells for. The 25% the dealer receives is for their level of expertise (which is why you went to them in the first place) and the convenience for the consignor.

It is up to you to figure out what your time is worth balanced against the ROI and the Time value of money.

You can't just "Buy what you like" and expect the knife to sell for what you paid for it. Homework...Homework!

If you bought a value priced knife from a maker with an excellent position in the market the knife competed in you would have no trouble selling it.

P.S. Forgot this. If someone offers me a knife for consignment and it is from a maker I routinely carry. I will offer them what I would pay the maker for the knife. Which is usually less because my consignment fee is 20%. It is then up to the client if they would prefer a "quick Nickle or a slow Dime"!

WWG

 

[Les Robertson]

Hi Bob,

Bowies sell for more money because they are Bowies!

Bigger costs more....at least in the mind of most consumers.

Additionally, you have to consider the makers position in the market. There are several makers who get close to or over $1,000 for a hunter.

WWG

 

[Kevin Jones]

Consigning a knife with a dealer automatically means it's worth at least 25% less than what the customer is paying. I assume if the knife was worth the asking price -25% the dealer would purchase it himself.

Not neccessarly, as it could mean and most often does mean the collector consigning to the dealer is just willing to take 25% under what the dealer is able to get for the knife. This could be because it's easier to have the dealer sell it or he may be into the knife for 35% less than what the dealer can get for it and is happy with a 10% profit.

Most dealers don't like to buy outright from collectors but rather consign.
A consignment is low risk for the dealer as he is out little if knife doesn't sell or takes a long time to sell as he has no capitol invested.

They will buy if the price is right, but usually works out better for the collector to consign.

I find consignment fees to be in the 10%-30% range depending on the dealer and your relationship with that dealer.

Bob I sent you an email identifing the only knife I have ever had a difficult time selling. You will no doubt be surprised as it's a very nice piece. It's just a case of the maker supplying too many too fast.

 

[supsme]

Hello WWG... I'm still trying to figure why the dealer wouldn't purchase the consignment knife himself...seems to me that many of the dealers don't think the knife is worth asking price -25%. If anyone is selling a knife by way of consignment I think it would be a smart idea to ask what the dealer would pay for it outright.

 

[Les Robertson]

Hi Supsme,

I can only speak for me. As I said if it a knife from a maker I routinely work with I will offer the purchase offer.

Many times what collectors want to consign are knives that are overpriced to begin with or the maker is no longer popular or they used materials that are no longer in vogue or should not have been used in the first place. Like Red Jigged Bone on a tactical folder...sadly that happens.

First and foremost dealers are in business. As such decisions must be made with the best use of the business's capital. While I would make less (20%) on a consignment knife. As Kevin pointed out the risk, Return On Investment and time value of money are all on the plus side.

WWG