Is it in the best interest of a maker to buy back his/her wares...

Melvin-Purvis

Melvin-Purvis

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If they are offered on the resale market in a heavily traveled 'collector/user' forum such as this, at less than originally priced; and if they aren't selling well?

My question is multi-fold, sincere, and should not be taken as a slight against any certain makers, or the followers of those makers...

The reason I ask is, whereas I'm relatively new to knife collecting, with only a little less than four dedicated years to be exact; I've obtained and read most of what has been published on/about knives over the last 30 years…

It would seem that the trend has always been for certain makers/styles to come into vogue, only to be surpassed by something 'new', with those past 'hot' makers rapidly fading into distant memory as a matter of course. That much is a historical given IMNSHO, based on what I've seen and read to date…

The only real difference that I can see between 'then and now' is the advent of the Internet, and the ability therein to reach the masses in short order. Now we have relatively unknown (outside of a small group of enthusiast/followers) makers demanding and receiving high prices for their products.

These makers promote well, knives are sold, friendships are formed, and all is good…or so it would seem, until someone that bought into the product promotion/camaraderie (hype?) needs to sell the product for whatever reason, and then finds that the limited market they've bought into is saturated…

To me, this seems to be recurring on a more regular basis as of late, and I often wonder what steps are being taken by this latest run of 'name' makers, if any, to insure that they don't end up in the dust bin of 'formerly famous' knifemakers?

More importantly, for those that bought into the product hype vis a vis an 'elite club' atmosphere, is this just a harbinger of a financial hangover in the making, and/or with regards to the makers that rode this wave of popularity, is there any responsibility implied?

Specifically, are they doing anything now to help keep their 'friends' financially viable by artificially supporting the market price, or is it just going to be an "Oh well, you bought it, it's yours now bud, thanks" kinda thing?

Concerned by this perceived trend, I only wonder if it's anything new?

Mel, Randall Collector…
 
I'm not sure what you are trying to get at. It is purely supply and demand that drives the market price. It is really pretty basic. The price of a certain knife will not remain constant, due to the law of supply and demand, and it is not the responsibility of the knife maker to ensure that it remains constant by artificially inflating the demand by buying back product.
 
Originally posted by Melvin-Purvis

More importantly, for those that bought into the product hype vis a vis an 'elite club' atmosphere, is this just a harbinger of a financial hangover in the making, and/or with regards to the makers that rode this wave of popularity, is there any responsibility implied?

Specifically, are they doing anything now to help keep their 'friends' financially viable by artificially supporting the market price, or is it just going to be an "Oh well, you bought it, it's yours now bud, thanks" kinda thing?
Click to expand...

I would truly doubt that makers are actively working to inflate prices for the sole benfit of their customers. I would not expect them to, and frankly that is much too close to price fixing for comfort.

If I buy a Ferrari does Ferrari have some sort of obligation to ensure that I will be able to get top dollar when I desire to sell it?

I am very much a believer in the "you bought it, it's yours" kinda thing. If you are buying knives as an investment there will be an element of risk. It is not the maker's responsibility to mitigate that risk.

Furthermore, if somebody purchases a knife in order to be part of an "elite club atmosphere" rather than for it's design merits then I maintain that this person is a sucker who deserves to eat the loss that they incur.
 
Interesting post Melvin!

I don't see this as all that different from other areas in business. Even lookign at businesses on the whole, new businesses can be exciting to consumers, onyl to be replaced by other new businesses next year. Restaurants can be like that! What is popular one summer can be out of business the next. So, how do you stay open?

I think that, for the most part, makers must be innovative and active in all areas of the knife world if they are doing this to really make money. SOme people can make a career out of one model or two. But to do so, you have to know your consumers. You can make the cheapest knviea available and go for that market, or make the most arty, or constantly use new materials and try to sell based on uniqueness and all that. Makers have to figure out their market and go for it. A guaranteed way to end up broke is to just make knives and hope they sell!

I like David Winch (a.k.a. Ferret) as an example. That guy bursts onto the net somewhat recently with soem wild designs and such, and he gets a lot of money for the knives. What does he do? Keeps workign on new designs, new finishes, etc. Maybe he got "more than his knives were worth" at first by folks who wanted to help him out and such, I dunno. But that guy has been growing. And from what I have seen, he knows how to talk with customers, knows how to use the net, knows what sells, etc. And I bet you'll see his stuff in the knife mags soon, and maybe he goes to shows now, I dunno. Point is, he grows and learns and keeps looking to do what needs to be done to do better.

I read a post, I think by Les, about some guy at a knife show. 1 year he sells like 40 knives. Next year he sells 30. Next, 18. This year, he fought to sell 10. (all fo this is a paraphrase, of course). THe guy can't understand why he's been doing worse and worse. Les (if it was Les) knew: the guy was makign the same 'ol knives with the same materials. Those were what the knife show buyers wanted 5 years agom but not now! Even Randall Made Knives brings out new models and updates their materials! Of course, they don;t have to bring out new designs/materials as frequent as others beause they have a name and demand that fuels their business in a way that others do not have. However, even they cannot refuse to have a net presense, have articles about their knives in magazines, etc. New knife buyers have to learn about RMK soemhow! Or else they'll buy the Camillus knives and Hossoms and Striders and Simonich blades that are in the mags these days.

So, to sum up, I'd say that newbie makers need to know about all aspects of the knife world, they must innovate and grow, and they MUST keep in touch with their consumers. If not, they will disappear.

These are my initial thoughts! I am curious about what others may write, and I'll be thinking about this for a while!
 
It's not uncommon for companies to buy back their own stock. One reason to do so it to keep up the market price for their stock.
 
Thanks for your concrete answers to an otherwise vague post...

That was a very difficult post to think through and post, as I type slowly with two fingers, and don't spell very well...it rambled quite a bit for sure, so I'll try again.

If, in the 'modern age' of Internet communication, whereby a maker of a product, (in this case knives), developed a following for his/her product; a following that was based primarily on camaraderie, and that maker's continued financial viability was based on continued sales of his/her product via that friendship/camaraderie/clique...

Would that maker, especially in tough economic times, work to artifically support the 'going rate' of his/her product by repurchasing previously sold knives that were now languishing on the resell market, in an attempt to prevent said lowered prices having an impact on future sales?

The thought here being, a maker would be hard pressed to sell 'new' knives for $400 if the resell value had dropped to $300 for an essentially new/unused knife on the resell market?

That was the initial question, I think. (With more to come I'm sure...lol)

Mel

-edited to add-

For all reading and responding...

I'm obviously having a hard time trying to quantify this (to me) perplexing question, so I'll follow this thread; and look forward to your responses, in the hopes that they'll help me clarify things a bit...thanks in advance.
 
Wow, Crayola pretty much nailed it as far as I'm concerned. Kind of tough to follow that post, so I'll just say that another concern for a maker to really develop a following and be financially successful is to have a good rapport with his or her customers. In the custom market people are buying knives as much for the experience of buying as for the knife itself. If the maker wants to be a prima donna or otherwise slight his customers, no matter how talented he is he will probably fall by the wayside quickly. Perhaps not totally on topic, but it's a thought that the subject brought to mind.
 
Hmm, just re-read your last post and have one more thought to add. I suppose a maker could be tempted/driven to do this, but if it got out I don't think it would do much for his or her reputation. It would kind of indicate a lack of faith on their part in my mind at least.
 
Hi Melvin, as a maker I have purchased three of my own knives in ten years. All were in mint condition at a slightly lower price than I origionaly sold them. I resold them and made a few dollars. I don't see any thing wrong with it but would be happy to hear other views.
 
Exclusivity and residual value are intangible, subjective and subject to change.

Caveat Emptor.

If a maker or manufacturer says "I will only make 10 of this knife" he/she should stand by that.

However this shouldn't limit their ability or entitlement to make other, perhaps even more desirable, pieces in the future.

I don't think they have any duty to the buyer other than fulfilling the specifications of the product.

Investment, in knives or any other commodity, carries risk.
 
Mel,
I've been a concious knife consumer for a much shorter time than you but this is a thought provoking thread. I thought I'd throw this out.

There are some obvious differences in peoples objectives. Most of my knife experience has to do with Buck knives. My grandfather had a knife made by Al Buck it was handmade and to my understanding in a garage. My dad had a knife made by Chuck Buck in a more formalized "shop format". My first knife was a Buck 112,made in a factory. I say this because I always assumed that people making knives were pursuing the same strategy. Do what you can to make and sell as many of your knives as possible. I sell surgical instruments this is more or less what we do. When demand increases we take the necessary steps to increase production.

There is a small but dedicated group of collectors pursuing surgical instruments. Knives are a whole other kettle of fish.

I have observed knifemakers buying back knives but what I have seen is that these knives held a particular significance to the maker,ie; I sold that knife to buy wedding rings,That was my first Damascus, I made that knife for someone special.

I haven't observed people trying to keep the aftermarket price for knives high. I have however observered knives not selling at the same prices or as fast. What I don't know is if this is a function of the unsteady economy or a glut in the market of certain knives.

If a maker started to buy back knives to keep aftermarket prices high, would they raise the "new" prices to increase demand? If said maker is the primary purchaser of their own knives, where is the benefit. I would think that this would be an exercise in futility. If a knifemaker is trying to make a living by making and selling knives they are not going to stay in the black very long if they spend their earnings proping up their own prices by buying back their knives.

If someone sells a new knife for $400.00 and the resale is $300. wouldn't this be a more realistic structure? Production knives have, with a few exceptions, this new and used price relationship. Automobiles obviously do.

Some makers want to be collectable. Others want their knives to be used.I think it would be very hard to make a living and control your prices.

The economics of the knife world is very fascinating to me. I'm sure someone somewhere is working on a Phd. On this topic or something very close to it.

You win a prize for the thought provoking question of the day.
Thanks
Mike
 
I believe successful knifemakers are very atuned to the secondary market. Buying back knives is not much of a solution. I would expect that some makers may be willing to take some knives back on consignment for a commission. Especially if it helps to relieve an over burdened backlog of orders, and allows them some wiggle room for innovation. But, innovation is the key. You want a maker that is constanly coming up with something his market is interested in. Otherwise the press dries up, the discussion goes away, and the market goes with it.

The one other thing a maker must do, is to make sure that he does not burn his own customers. Once he starts discounting his knives, and underselling his own customers, he is really writing off his good will. If you have to go cheap, then do so with a different line of knives.

n2s
 
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