I'm thinking about dealing

[Charlie Mike]

How do you go about becoming a dealer? What knives should I stock? Is fleabay a good way to start?

 

[hwpaintballer]

How do you go about becoming a dealer? What knives should I stock? Is fleabay a good way to start?

1.) Cant help you with starting out.
2.) I would recommend a diverse variety of knives.
3.) Ebay might be a good way to get a start, lots of people use it daily.

Also good luck :thumbup: and if you do become a dealer shoot me a email and I will be sure to try and make a purchase or two off of you.

 

[Charlie Mike]

One reason I would like to do this is to have an excuse to get my hands on a wide variety of knives. A case of dealing to support my habit

 

[hwpaintballer]

Thats not to bad of an idea, except you have to say goodbye to them. It would also be a stay at home in PJs type of job .

 

[Absintheur]

First have deep pockets, most folks who have never owned a business don't realize all the costs. If you have just an online store it isn't as bad but if you want to have a store front it can get very expensive.

Second, your competition. Just look online and you will know what I mean, there are tons of people trying to sell knives, trying to make a living selling the common brands means very thin profit margins and trying to sell customs means buying in big enough numbers to convince a custom maker to give you a discount on knives he can sell for full price himself. And non-custom manufacturers like Cold Steel, Spyderco, etc have minimum initial buys, these can range from $1000.00 to several thousand dollars. (remember what I said about deep pockets?)

Other costs include things like insurance, much needed in today's "let's sue 'em" society. Of course with a storefront you also have rent and such there. I would say if you want to open and run a small business today you have the need to be able to live out of your pocket for at least a year. That means enough savings to buy product, set up your store, pay your bills including your home bills as well as business bills out of your savings for at least one year.

Opening a small business today is a long and difficult road, if you choose to do so I wish you the best of luck. I say all this as someone who has owned two small businesses...it is a tough way to make a living.

 

[DWK2]

Big volume dealers often get pricing well below the normal "dealer" price. Sometimes it's called "distributor" pricing, etc. In any event, some of these big dealers can sell knives on the internet---at a modest profit---for about the price a small dealer can get them for. Competition on the internet has brought many popular knife prices down to the point that the value of being a dealer may not justify the cost and work unless you buy a LOT of knives.

If you resell in-state, you'll often have to collect and report sales tax (depending on your state laws). You could be competing with out-of-state internet dealers who may not have to collect sales tax. That can put you at a pricing disadvantage.

Also, bear in mind that if you buy knives as a dealer and keep them for your own personal use, many states require you to pay a "use tax" that's often the same as the sales tax. If you order from a lot of large out-of-state internet dealers, many states won't tag you with sales or use tax. In my area that makes an 8.25% difference.

Just some factors to consider.

DancesWithKnives

 

[Charlie Mike]

Thanks for the advice guys. I've decided that is not for me

 

[mnyshrpknvs]

A couple years ago I considered doing this myself. I was going to start with an online business and if took off, I would consider a brick and mortar store. I requested dealer packets from quite a few manufactures like Emerson and Spyderco as well as a couple Custom Makers. Looking online and comparing several places selling the same brands, then comparing what my cost was as well as taxes, freight it was deceided to pass. You almost have to get into Optics, sheaths, lanyards, sharperners and other accessories such as holsters, magazines, speedloader and reloaders to make any money. This is on top of a substantial selection and stock of knives. Just some food for thought.

mnyshrpknvs

 

[So-Lo]

Thanks for the advice guys. I've decided that is not for me

I can't blame you.

Do what we do, buy sell trade. Your not going to make any money, but you sure do get to finger bang a whole lot of knives

I will sell a knife I love just to get my hands on some new steel. (Just let a couple XMs go and a couple SNGs.) Now another knife Knut gets to play with them and enjoy them just as much as I did. That makes me happy, in some very small way I gave back. They will more than likely do the same thing a few months... a few years... Maybe pass them on the their kids..

Now my slush funds are back up from the sales Guess how many new blades hit this week?


5 with two more due anytime now I will more than likely play for a bit, then trade or sell them. Who knows....

I collect photos of knives, not the knives them selves. Go look at my photo thread in the gallery. I have another 100 or so photos to add today All new meat too

 

[So-Lo]

I also need to add, that I have made a lot of friends through buying selling and trading.

Hundreds of PMs, emails, phone calls later.. I feel I have made some real good friends. That is worth more to me than any knife ever could.

Yeah yeah yeah I'm a big softy', big ups to Spark for keeping this place up and running :thumbup:

 

[Billbo66]

I run a small industrial distribution business. When I envision a brick and mortar knife store, I think you would have to be moving alot of inventory at a pretty healthy margin to stay afloat and pay yourself. I can understand how the Etailers can have such low prices, especially if there is no sales tax to report and pay. Brick and Mortar stores have a tough time keeping up with the taxes, which takes alot of the profits. With knife sales at a 30 or 40% markup, the actual net profit after rent, payroll, utlities, etc. may actually be closer to 5%.

As an example-One of the nicest guys on the planet just had the State Revenue/County sheriff take all of the inventory from his music store last week. Great guy, great store, wealth of knowledge, super inventory. Bad business sense.

To sum it up, in this economy, I would only do it online, with very low overhead, and be very diligent about the books and taxes.

 

[Gollnick]

The big thing you need is inventory. People these days expect their order shipped within about 48 hours. That has become the norm not just in knives but in retail business in general in America today. To do that, you have to have inventory; you have to have the knives on-hand.

Take, for example, Benchmade. How many knives do they make? Don't forget to count variants such as plain/serrated edge, color, etc. It's hundreds of SKUs (stock keeping units, i.e. orderable unique knives). And you'll need to have at least three or four of each to start with. You'll need 1200 knives. If the average dealer cost is $75, you'll need $90,000 just to get started in the Benchmade line. Spyderco has even more models. You can figure that it will average $75,000 per line. And to be perceived as a dealer with a good selection, you'll need at least ten or twelve lines. Your initial investment will be upwards of a million dollars.

Have you got a million dollars?

If not, you'll need a loan.

Are you credit-worthy for a million dollars?

Oh, and banks don't loan a milion bucks to people with no business experience.

 

[DVM]

Check with Blue Ridge Knife Works Marion,VA.They are wholesale $100. orders.Great people they have large catalog.All brands S&W to Buck.

 

[Goodfella]

The big thing you need is inventory. People these days expect their order shipped within about 48 hours. That has become the norm not just in knives but in retail business in general in America today. To do that, you have to have inventory; you have to have the knives on-hand.

Take, for example, Benchmade. How many knives do they make? Don't forget to count variants such as plain/serrated edge, color, etc. It's hundreds of SKUs (stock keeping units, i.e. orderable unique knives). And you'll need to have at least three or four of each to start with. You'll need 1200 knives. If the average dealer cost is $75, you'll need $90,000 just to get started in the Benchmade line. Spyderco has even more models. You can figure that it will average $75,000 per line. And to be perceived as a dealer with a good selection, you'll need at least ten or twelve lines. Your initial investment will be upwards of a million dollars.

Have you got a million dollars?

If not, you'll need a loan.

Are you credit-worthy for a million dollars?

Oh, and banks don't loan a milion bucks to people with no business experience.

Based on the initial post it seems apparent that this person was considering a smaller business. 4 of each knife from several of the top manufacturers is a little overkill to say the least. 1sks or New Graham Knives do not have 4 of each model from Benchmade let alone every manufacturer they carry. This business model would be a set up for disaster. You would want to stock the top sellers and have an option to back order the other models.

A friend of mine owns a gun shop locally, he sells Benchmade, Cold Steel, and some other misc. makes. A few years ago he wanted to do some eBay auctions to supplement his gun sales so I offered to help him out. We went in on an initial investment of $15000 and sold the whole inventory in about a month exclusively on eBay. After everything was all said and done, it was profitable but it was a lot more work than we expected. Expect to answer a lot of emails from the day you commit to the sale to the day after the customer receives the item (complaining).

If you have good customer service skills, a lot of spare time, a passion for what you're doing; a small scale eBay business may be a good little stepping stone. Like any business, you might want to start out with a basic business plan. Once it's finished you can go to SCORE.org for free business consulting. SCORE will also help you prep your plan and presentation for a bank loan or private investors. Start out small and build your business... Not every successful knife dealer started out with a well organized large-scale store front. Good luck.

 

[FortyTwoBlades]

Pro tip: You do not want every model out there. You need to pick and choose popular models to start out with. Businesses are things that need to be nurtured. You usually can't run things exactly the way you want to at first because you're busy making sacrifices to keep the d*** place open.

 

[Daniel L]

I have a dealer account with one of the big distributors - but eventually I concluded that:
1) there's not a whole of profit unless you're selling a truckload of knives
2) whatever profits I made I spent on more knives
3) you get better service and pay a small premium from stocking dealers like New Graham. They charge a fair price (I know the dealer price!) and it stops temptation to stock up.

I think you made the right call.

 

[hardheart]

I wonder how the drop shippers are doing with knives. Some sites make it painfully obvious that their inventory is determined by the contents of someone else's warehouse.

 

[b.c.molin]

Thanks for the honest replies.

I too had been thinking of trying to turn an interest into a small business but the insights here have swayed me to keep it as an enjoyable hobby.

 

[zenheretic]

Just like any business, you should have a plan and be willing to work long hours for little pay. Hopefully your plan and hard work will be enough to increase the pay, but usually the long hours continue.

 

[Gollnick]

I wonder how the drop shippers are doing with knives. Some sites make it painfully obvious that their inventory is determined by the contents of someone else's warehouse.

The answer is that they very often end up on the bad and ugly sides of our Good, Bad, and Ugly forum.

They find out that their distributor doesn't always have inventory on every item or takes longer than expected to ship something and all of the sudden, they're tap-dancing about how the knife they said they'd ship overnight -- and the customer's credit card was billed for -- is a couple of weeks late. Then, the customer cancels his order. The CC company dings the dealer a 15% fee for refunding and the distributor dings him a 15% restocking fee to "restock" something that hasn't even been shipped. It doesn't take long for these situations to add up to considerable losses.

In this day-and-age where customers expect orders to be shipped within a day or two and certainly don't expect their credit card to be charged until a day or two before shipment, the non-stocking dealer model doesn't work very well anymore.

So, if you want to be a "full-line" dealer, well that's where that million-dollar inventory I mentioned earlier comes in.