Knife collecting and the economy

marcangel

marcangel

Joined
Dec 20, 2001
Messages
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I haven't posted for quite some time, and "back in the day" was regular contributor. Just like everyone else, I've been effected by this miserable, protracted recession. This will be the first year I will not even plan to attend the ECCKS, and have absolutely nothing on order or at an engraver. It's not that my interest has waned too much, but my finances have. I still patrol the prime purveyors web sites, but most of what I'm interested in is over $4-5K, and I have real hard time with that today. What is everyone else doing these days? Is the demand there for exquisite art knive?
 
I recently had a conversation with a purveyor about this subject. From your previous posts I know the type of knife you're interested in. Here is what I think has happened. Start with a $2000-$3000 knife, add another $3000-$5000 or more for top quality engraving and then your up to $5000-$8000 for the knife, a huge amount of money for an object that really doesn't provide that much bang for the buck. There are lots of knives in that price range available and really, how many people can afford them? Not many, and if you can afford it you probably can afford and will want a better or more special knife. I mean if you can afford to spend $8000 you probably have the means to spend $12000 or $15000. Also you wait forever for engraving and it isn't always going to turn out out like you think it is, you may be disappointed with the finished product and then what do you do with it? Consign it a dealer? They need to make something off it too so selling it isn't so easy. Also, who is buying these high end knives, mostly older guys that have been collecting for quite some time and they already have lots of the same and maybe are thinking of getting rid of them. Just because a knife is engraved by Lindsay or made by Hodgson or Hoel etc. doesn't mean it's a good deal. Tastes change, knives that were hard to get are not so hard to get anymore and even if you have the disposable income there are lots of other things to spend it on. Also, pictures of knives often look better than the knife when you receive it so you have to know that if you ant to get rid of it it will be an easy sell so there has to be that demand. It's not a rosy picture and when you realize that some purveyors take knives on consignment, don't sell them and return them to the owner and then mark them sold on their website it makes it hard to know what the market really is and in my case pisses me off and turns me off to the whole knife game. There's too much dishonesty and bullshit and talk about how your making an investment and on and on. Those are some of my thoughts on the subject. I would also like to know how others perceive the situation. Happy Thanksgiving.
 
The collectors that i know have not really been affected by the economy enough to influence their buying decisions...more of a variety of factors, including changing tastes.

Inventory is low, the dealers that I know can't keep the good stuff in stock and cannot get more.

I have so many knives that my tastes are mostly focused on acquiring more Loveless style Double edged knives done right, and there are just not that many makers that can pull it off...when there is a good one that appeals to me, I have to act fast, because there are many other collectors looking for the same stuff.

I chat regularly with Dave Ellis, Les Robertson, Dan Favano and other purveyors, and they are all moving everything they need to, and just cannot get more.

While I would hardly paint a rosy picture, as I wrote about in "The World of Art Knives" by Dr. David Darom, "knife people" make it happen...I can't speak to those that "dabble".

Best Regards,

STeven Garsson

Best Regards,

STeven Garsson
 
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Good thread Marcangel
My 2-cents, I’m thankful on this Thanksgiving Day.

I feel the economy in general is on the upswing and we are seeing positive results in custom knife collecting. It was pretty scary at the bottom as I can remember attending a couple fairly major knife shows where table holders outnumbered the collectors/serious buyers in attendance. This was definitely not a good indicator of a positive future for custom knives.

I’ve had some major things/changes going on in my life the last year and a half which has greatly reduced the time I have for buying knives and attending shows, however from what I hear and see knife shows have really recovered and knife sales are on the rise. I also feel we are enjoying a sort of “golden age” or “renaissance” period where it’s a very favorable time for custom knife makers, service providers and collectors.

I’m also pleased to say that I have seen very few examples of dishonesty in custom knives over my years in the community and would not have been exposed to any if not a result of my involvement with the CKCA where we help to resolve disputes from time to time.

My overall enjoyment from custom knives is derived from “the people” (and community), the “knives” (my love for things that represent high performance functional art), the excitement of “buying/selling” and the “investment” aspect. The above sources of my enjoyment are alive and well on this Thanksgiving Day 2012.
 
Custom knives like any other product are not immune from the product life cycle. With rare exception (usually exceptionally well branded products) products are subject to the product life cycle.

Then couple that with the cycles that exist within the custom knife market.

Too many custom knife buyers (Im guessing it is just human nature to think it will never end) view the hot market sector and get sucked into paying 2- 5 times (or more) what the knife is worth. Like the housing market most of these buyers think there is another person just waiting to buy the knife from them. Flip this knife...if you will. For those who forgot I direct your attention to the housing market.

Marcangle, I direct your attention to the Inteframe folder market of the late 1980's....high end folders, lots of engraving and gold inlay. Most of those knives can be had today for 20 to 40 cents on the dollar. Millions (that's right MILLIONS) of dollars were lost in this collapse. Some dealers took a hit...but primarily it was the collectors.

Since than what I have is seen is that people with $5,000 to spend on a knife generally are not interested in a "Previously owned" knife. There are exceptions, Moran, Loveless, Bose, Walker, etc. Primarily those with $5,000 + prefer to get a knife made to their specifications. The more engraving, gold inlay and/or scrim you do to a knife the more people you eliminate from the secondary market for that knife.

While market timing is discouraged with regards to the stock market. It is much easier to accomplish this within the custom knife market. However, much like those who try this in the stock market they wait too long. This is even worse within the custom knife market. As there is the attachment to the knife (for numerous reasons) and the foolish notion that the demand will always be there.

With all the information out there the savvy collector and dealer can stay within a particular cycle (and eliminate those knives from there collection or inventory that are not desirable). However, this takes doing your homework on a regular basis (daily for dealers). There are very well known makers out there who did not pay attention to the market(s) and continued to make the same models. While sales would decrease slightly with each passing year...things seemed "Ok". However when 2007/2008 hit the bottom fell out for many makers, collectors and dealers. Not that they were no longer relevant...just that they had to rethink the way they were collecting or making or selling custom knives.

I know I take the joy right out of custom knives for many because of my business like approach. I would submit to you that long ago when I was a collector I grew tired of every knife I bought would not hold its value. Twenty Eight years ago I got tired of this...and started doing my homework. So far so good! :D
 
Good posts. I obviously do not have my finger on the pulse of the market like Les or even collectors like Kevin or STeven, but what I did notice is that business in general and my business in particular at the Gembloux show this year was much more brisk than in 2011 or even 2009 which was not a bad year for me. (2011 sucked!) Things do appear to be improving somewhat on this side of the pond and on the other side, I think that the more stable economies have decided to move on without their less respnsible brethren like Greece, Italy and Spain to whatever extent they can. Over here, i think that business people have finally gotten tired of waiting for our political masters to pull their heads out of their collectives backsides and have decided to move forward in whatever way they can. Les, you talk about the interframe collapse costing folks millions and that would have shocked me in the past, but for the fact that I have heard the number BILLION bandied about of late when talking about the annual value of just the "tactical" knife market worldwide.
Here is what might be considered a contentious question. Are we to the point where there is no longer such a thing as a "plain old collector" out there, be it for knives, baseball cards or what have you? Does every field of collecting require that you be a smart speculator looking to eventually turn a profit on everything that you buy? I guess the core question is this. Has the collecting game gotten to the point where you have to consider if OTHER people will eventually like that which you enjoy buying even MORE than you do?
 
"The general picture on custom knife sales is a mirror image of sales in other collectible art categories. It's stratified, with the lesser-priced knives being very slow, the mid-range selling at about cost or a little markup, and the high-end range being even more sought after than before the recession, which is being driven by the scarcity of fine top works and the growth in the number of savvy, wealthy collectors worldwide" -- Don Guild, BLADE Magazine, June 2012.
 
I have to work extremely hard these days on my business, and not just physically but mentally also. There is less cash flowing around, and as a business owner I need to be creative and adaptive in order to keep my business going. The effect this has on my hobbies is pretty massive. Hobbies exist in order to appease a part of my brain that craves distraction from responsibility, and the simple fact of the matter for me these days is that my 'hobby lobe' has to take a back seat to my 'reponsibility lobe'.

As for a great answer to the OP, I'd point to Les' post.
 
Related, but not completely: VERY revealing and interesting article on selling a 'valued collection'. Whatever the collection is (knives, watches, toys...), appears to be similar.

Harry Rinker on Collectibles.

Coop
 
There are some interesting thoughts and comments here. Some I wholeheartedly agree with (responosibility lobe vs. hobby lobe) and others I think are flat out undeniably wrong. The statement that 80's engraved interframe folders can be gotten at 20-30 cents on the dollar may have some merit, but I see few, if any well done engraved Osbornes, Hoels or Kious knives selling for under $5K today, and many of this knives could be had for under $2K in the mid-late 90's. I do agree that buying "what's hot" is not a good plan if you're in it for the long haul. Regarding engraved knives, that's always a touchy one, since everyone has their own tastes. I can't get excited about flowers, hummingbirds, and my least favorite sci-fi. Just doesn't float my boat, although for some it does. One of the reasons I stopped posting was because a friend of mine was tracking everything I posted and driving the market for knives I was getting in "early" on up the kazoo! I've managed to buy 4 Emmanuel Esposito knives over the past 4 years, but what I bought during the height of the recession for $5K is going to cost you far more today. Martinr makes the point that you're looking at $8 and over a year and half wait for something like what's in my avatar. The reality is I had that knife built and engraved for much less not too long ago.
 
Good observation, although, I would add to that that the "lesser priced knives" are being sold new for ever LESSER prices...like the same as some not all that impressive US made factory offerings or less. Go look at the knifemaker's for sale section on here. Sure, giving decent looking stuff away was always a way to move it fast, but now, it almost seems to be a prerequisite for moving it at all.
The Virginian said:
"The general picture on custom knife sales is a mirror image of sales in other collectible art categories. It's stratified, with the lesser-priced knives being very slow, the mid-range selling at about cost or a little markup, and the high-end range being even more sought after than before the recession, which is being driven by the scarcity of fine top works and the growth in the number of savvy, wealthy collectors worldwide" -- Don Guild, BLADE Magazine, June 2012.
Click to expand...
 
I by no means feel that I have a handle on the current market but from a maker's point of view my best sellers these days are the medium priced knives. I make very few high end knives and even fewer low end pieces. My medium prices knives have kept me going these last few years, however. I know that each makers market is unique to that maker but for me this seems to be the current trend.

Gary
 
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Good points. I like to look at the knife market like the art market, high end classics (and that is a personal thing) will always be,worth something!
 
Marcangel, I did NOT make the point that a knife like your avatar costs $8000. What I said was an engraved knife depending on the knife and the engraving could cost between $5000-$8000 and the wait might be forever, and obviously I didn't mean forever literally. The "reality" about your avatar knife is so vague it's meaningless, what is much less and and what does not too long ago mean?
 
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Just a thought that keeps coming to mind.
Is a speculator really a collector? In my mind they are really just gambling.
I think that those who speculate/gamble tend to lose when the economy changes.

My idea of a collector is someone who collects items because they like them.
And intends to keep them as a part of a collection.
 
This is an interesting subject to me. I can only speak with the way that I see the market.
First to me it is maker and design then material choice is soooo important. Same knife---- different materials---- and the knife will lose 40% on the second market or gain 40%. This holds up ever more in the ecomony we are in. Fresh picked is always best but a maker can do many things to help his second market hold up and to me it falls 95% upon the maker to work it so his second market does hold up.

A good case in point is during the time the interframe was booming, Buster, Schmidt and a few others was also working their classic designs. Demand for their works is stil growing after these years. The material choices they made is also evident.
 
Burl Source said:
Just a thought that keeps coming to mind.
Is a speculator really a collector? In my mind they are really just gambling.
I think that those who speculate/gamble tend to lose when the economy changes.

My idea of a collector is someone who collects items because they like them.
And intends to keep them as a part of a collection.
Click to expand...

I'm pretty involved in custom knives and have never known anyone or ever hear of anyone who is solely a custom knife speculator/investor.

Now I know quite a few collectors who love custom knives and have profited on them as part of their collecting.
 
Burl Source said:
My idea of a collector is someone who collects items because they like them.
And intends to keep them as a part of a collection.
Click to expand...

Collectors have many focuses and a SMART collector does not want to lose money when they go to sell.

There are collectors that get what they want and buy/sell very little after that(not good for the collecting market as a whole) and collectors that are "active" in securing and releasing inventory onto the market(which is good in terms of turnover, potential quality product, and bottom line for makers)

Your idea of a collector would be skewed to the collectors that you know, your experience with the market and your own thoughts.

Best Regards,

STeven Garsson
 
Kohai999 said:
Collectors have many focuses and a SMART collector does not want to lose money when they go to sell.

There are collectors that get what they want and buy/sell very little after that(not good for the collecting market as a whole) and collectors that are "active" in securing and releasing inventory onto the market(which is good in terms of turnover, potential quality product, and bottom line for makers)

Your idea of a collector would be skewed to the collectors that you know, your experience with the market and your own thoughts.

Best Regards,

STeven Garsson
Click to expand...

Very well said and very true Steven.
 
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