Japanese Yen Impact on Spyderco Seki City Costs

[bean_sips]

I saw an interesting article in the Wall Street Journal this morning about the value of the Japanese Yen compared to the U.S. Dollar. In October, the ratio was 78 Yen per Dollar and as of this February the ratio is 95 Yen per Dollar. This essentially amounts to the Yen losing approximately 20% of its value. I know that there have been some questions about the Seki City made Spyderco costs and how the strong Yen has been a large factor in the price point. Just to speculate, do you think the Yen value dropping will lower the cost of the Japanese made Spydercos? I’m not super knowledgeable about exchange rates, manufacturing costs, etc., but I’d like to think that this would have any impact. Any input?

 

[eschwebach]

Many people complained about the price of the Starmate when it came out and the strong Yen was pointed to as one of the major culprits, so you would think the reverse would be true as well. But my cynical nature tells me that prices don't often go down, it just might slow the increase....

 

[Fredde90210]

But my cynical nature tells me that prices don't often go down, it just might slow the increase....

+1 So true, so true

 

[bean_sips]

Many people complained about the price of the Starmate when it came out and the strong Yen was pointed to as one of the major culprits, so you would think the reverse would be true as well. But my cynical nature tells me that prices don't often go down, it just might slow the increase....

The Starmate cost discussion is what made me ponder this when I saw the article in the paper. I think we can all agree that we'd love to see less costly Starmates, Enduras, Caly's, etc.!

 

[9blades]

Originally Posted by eschwebach
But my cynical nature tells me that prices don't often go down, it just might slow the increase....

Sound rite to me...

 

[D1omedes]

I wish I knew economics and mathematics better. My simple brain sees that for one dollar, you need 78 yen means the yen is weaker on a pure 1:1 ratio. Could someone explain what I seem to be ignorant about?

 

[RevDevil]

Have you ever seen the price of good s ike this go down? I haven't
As far as the Starmate, it's not purely the cost of the materials and workmanship folks. Bob Terzuola has to get paid since it is a collaboration. Every collab is different, the maker might want more or less than the last guy.

 

[nccole]

Also, October was not that long ago for a business, and the price won't fluctuate that quickly. The knives on the market now where made with materials bought probably closer to October, so even though you are purchasing knives now, their price is based off at least a couple of months ago or more depending on how much inventory is kept on hand. The weak Yen now may be reflected in knives you purchase six months from now. But the cynics are right, the price will stay the same and the profit margin might inflate for a time.

 

[bean_sips]

A few clarifications: I don't necessarily think think that prices would decrease... maybe just increase more slowly than the rest of the lineup as time passes. From what I read in the article, the Yen was projected to continue downward in value and then stabilize, so any price adjustments would be contingent on this trend. From what I remember reading (and correct me if I'm wrong), Spyderco has a fixed margin structure, so any exchange savings would be passed on to the consumer. However, I'm sure that previously contracted production would have to end before any adjustments would be made.

Also, just to make myself super clear, I still think that Japanese-produced Spydercos are a fantastic deal right now at current costs when you consider the workmanship and materials that go into the knives. I just like to openly speculate, I guess.

 

[The Deacon]

Have no idea if this is still true today, but, years back, when a vendor was negotiating a contract price for items to be produced over a period of time, that price would take fluctuations in material cost and other factors into consideration. Once the price was set, and the contract signed, both parties had to honor it. Sometimes the vendor made out better, sometimes the company placing the order made out better.

 

[powernoodle]

Since we are talking Spyderco, consider the economic analogy of a spyder web. The retail cost of the knife is at the center of the web, and the value of the yen is just one thread in the web. You pull that thread in either direction and it will have only a little bit of effect on the whole web, because like Brother Rev noted, there are many factors (many strings) at play. A falling yen value certain won't hurt though, will it?

Mr. Eschwebach mentioned the Starmate. I was jonesing for one of those, but the price kept me away. And for me, thats a rare occurrence with a Spyderco.

 

[skyhorse]

delete

 

[eschwebach]

Mr. Eschwebach mentioned the Starmate. I was jonesing for one of those, but the price kept me away. And for me, thats a rare occurrence with a Spyderco.

I have stayed away from it (Starmate) as well because of the price. This is where we as consumers have the power, if sales of the Starmate are weak then it will be on next years discontinued list. This in turn may affect whether Spyderco decides to build a similar knife with those materials, and/or whether to do another collaboration with that designer. The next Terzuola might come out of Taichung and be CF with S30V and be priced more in line to what the consumer wants. My two cents...

 

[AF]

I don't know if the falling Yen will have an effect.
It's interesting to me that there are some awesome bargains produced in Japan like the Delica 4. On the other end is the Starmate which is not only expensive but suffers from fit and finish problems - rough tang and loose lanyard rivet.