How Much Does a Premium Steel Add to The cost?

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VorpelSword

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Dec 27, 2007
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How much does the use of a premium steel such as Magnicut add to the cost of a shop made or custom knife?

I ask the same question for a production maker.

Not questioning the cost, just asking about the economics.
 
When less supplies are available but demand goes up......let's not even talk about politics, the lack of federal reserve transparency, what the value of the dollar actually is? Inflation is funding bailouts, banks, and endless wars......

How much do you Want your magnacut blade to cost?

Last summer/fall I have 2 people who want my chef's knife in Magnacut. I couldn't find the size, thickness I need. The material was gone
That costs something, too.

It Should get better this year.
 
The added material cost can start to be significant depending on supply. I ordered some CPM-1V the other day and just the raw steel cost alone was 5-7 times higher than something like W2 the last time I ordered it. But then you get into increased difficulty in grinding, machining, and finishing which takes longer and burns through more consumables. Unless you’re using Damascus, you generally use more dollars worth of belts than steel in a knife (belts range from $4-$20 each). On top of that a lot of them need a cryo step to maximize the heat treat which is yet more cost. Depending on what steel is being used you could easily increase material/consumable costs by 3-5x or more what a knife made out of something like 1084, 1095, or 80CrV2 would cost. After all of that you have to pay the maker for their time.

So the raw material cost alone is only a small part of it. How much it increases the cost depends on the maker/company. For a large company with multiple employees, more time/difficulty equals higher overhead cost in general on top of everything mentioned above.
 
Well it doesn't have to be Magnicut . . .it could be any other steel. I meant to ask what the cost of blade steel (cost to the maker) has on the final cost of the knife to the customer.
 
VorpelSword said:
Well it doesn't have to be Magnicut . . .it could be any other steel. I meant to ask what the cost of blade steel (cost to the maker) has on the final cost of the knife to the customer.
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I think you're gonna get dramatically different answers based on different makers' particular market. I don't have a big online demand for my knives and mostly sell locally or to friends and family, which means that most of my customers don't even know the difference between stainless and carbon steels in general, let alone high end steels like Magnacut. My steel cost might go up about $100 on a big chef knife, plus more abrasives and time, but there's no way I'm getting that back in the final price of the blade. So for me, it makes more sense to stick with more affordable steels like AEB-L and keep my profit margin higher. Other makers are gonna have totally different experiences based on the demand of their customers and how efficiently they can make knives with premium steels.
 
VorpelSword said:
Well it doesn't have to be Magnicut . . .it could be any other steel. I meant to ask what the cost of blade steel (cost to the maker) has on the final cost of the knife to the customer.
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I tried to explain in my answer that the unit cost of the steel is just the tip of the iceberg. You can go to New Jersey steel Barron, alpha, pop’s, Niagara, etc… if you want to see the difference in steel cost. We don’t have any secret suppliers. Outside of damascus, the blade steel is about the cheapest part of a knife no matter how expensive it is. It’s all the stuff you have to do to it and the increased time and consumables it takes to do it that causes a significant price increase.

Put simply, if it costs a maker 3x times more money and time than it takes to make the same knife with a simple steel, they’re not just going to raise the price proportionately. They’re also going to recover the profit they lost by not making simple steel knives during that time.

Or, in simpler terms, as production decreases cost increases. If a maker needs to clear $1000 profit per week to stay afloat he or she is going to price their work accordingly. Whether they make 3 knives or 10 they have to clear the same amount to stay in business.
 
this knife is 440C
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it's the time that carries the value, and the more renowned the maker the more valuable the time. Steel costs and other material costs, relative to each other, are fairly negligible with a custom knife. All the value is wrapped into time, and the value of the time is wrapped into the maker.
 
Materials+shop rate+(margin if not included in shop rate)=knife price

But hobby makers like me don't get anywhere near that, if we sell our knives.

Right now I'm making a giant bowie for a buddy, he wanted Damascus. That cost 220$, the guard is a piece of old wrought iron 10$, the handle material is Elk shed provided by customer 0$, the pommel is brass plate, 2$.

Shop time? Who knows! Consumables? No idea.

I work slow, I'm not that experienced so I make lots of mistakes and have to fix them. I've been working on the knife for about 6 months maybe?

I've already decided on a price that I'm going to charge, but I'm not going to make any money on it. My material cost will be covered, but the rest of the costs of producing the knife wouldn't really be covered. Certainly not my time.

All of that is to say, like Lorien Lorien and ScarFoot ScarFoot are saying pricing is complicated and the steel is one of the smaller considerations. Time, consumables and "special" materials count a lot more.
 
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Keep in mind that in addition to the WAY more pricey tag on Magnacut vs A2 (two steels I use) the belt costs for Magnacut are also WAY more pricey. I upcharge $100 to use Magnacut.
 
I have only ever charged for the costs of materials. I'm not a dealer/retailer of materials. If a material adds to the cost of the knife, I charge accordingly to cover MY cost.
It is no more difficult to make a knife out of Ivory than it is Micarta. I only seek to have my $$ returned for the extra cost.
I'm a knife maker and charge for making the knife, not for buying materials.
 
I use a laser prototyper for small numbers, they want $59 per blade in 5/32" Magnacut vs $3 per blade for 1/8" 1095. Price goes to under $2 each on the 1095 and $39 each on the Magnacut when getting ten done.

6"x12" 5/32" hot rolled Magacut sheet at NJSB is ~$400 vs same size/finish AEBL-L at ~$100
 
Karl B. Andersen said:
I have only ever charged for the costs of materials. I'm not a dealer/retailer of materials. If a material adds to the cost of the knife, I charge accordingly to cover MY cost.
It is no more difficult to make a knife out of Ivory than it is Micarta. I only seek to have my $$ returned for the extra cost.
I'm a knife maker and charge for making the knife, not for buying materials.
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Do you account for failures? If I'm working with pricey material that could fail like mammoth tooth, synthetic opal, damascus (chance of delams) then I also try to factor in my failure rate. Losing a dammy billet hurts way more than monosteel AEBL.
 
It really depends on the steel.

First it’s what I have to pay for it and how many knives I can get out of it. I have one bar I had to pay $200 for and could only get two knives out of. However it gets more complicated. Super hard and high wear resistant steels require more abrasives than typical knives so I’ll add additional for the extra abrasives needed.
 
Tekkz said:
Do you account for failures? If I'm working with pricey material that could fail like mammoth tooth, synthetic opal, damascus (chance of delams) then I also try to factor in my failure rate. Losing a dammy billet hurts way more than monosteel AEBL.
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I don't even know how to answer that. But, any failure I might have is not a financial burden for my customers to bear.
In 20 years of making Damascus I've had only a handful of failures. Not worth considering.
 
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