Knife Markups?

[000Robert]

That isn't too bad of a hike compared to a others. There are some model knives that have literally doubled.

I wouldn't know. I mostly only buy CPK knives. But occasionally a knife will catch my attention.

 

[Hackenslash]

???

Sabanza, Cool Steel, Spoderco...see the pattern? I dare say someone made a joke.

I bet it's related to the famous Sebenza Rock.

The famous Sabanza! A genuine Kris Reef knive from the Guangdong province of Idaho, USA.

And you call yourselves knife enthusiasts!

 

[Steely_Gunz]

I'm just going to summarize my thoughts on this:

Knives aren't too expensive, they are just priced higher than you want to pay.

MAP is not the devil. No one is saying you can't sell a Spyderco at loss, you just can't advertise it lower than a certain point so that the brand retains value beyond pure capitalism cratering it so that retailers can actually make a profit high enough to make a living and thus allowing them to buy more knives from the manufacture.

There are lots of awesome sub $100 knives out there. Great workers with fine fit and finish. If $100 is your budget, that's your pool to swim in.

 

[scdub]

I wouldn't know. I mostly only buy CPK knives. But occasionally a knife will catch my attention.

Oh - do you like CPK knives?
You should post a picture sometime.

 

[Dav1]

..

 

[Danke42]

I'm just going to summarize my thoughts on this:

Knives aren't too expensive, they are just priced higher than you want to pay.

MAP is not the devil. No one is saying you can't sell a Spyderco at loss, you just can't advertise it lower than a certain point so that the brand retains value beyond pure capitalism cratering it so that retailers can actually make a profit high enough to make a living and thus allowing them to buy more knives from the manufacture.

There are lots of awesome sub $100 knives out there. Great workers with fine fit and finish. If $100 is your budget, that's your pool to swim in.

 

[Landshark99]

I have an issue with the OPs choice of terms, If you think a knife is too expensive that is up to you too see or not the value, but you said markups, so unless you know for a fact what a dealer pays for the knife from the builder you have no idea what the markup is. Every dealer has a need to make profit in order to stay in business and it always amazing me people who "are sure" what that markup is. Usually they are very wrong, some retail item have large markups and many have small ones and some are sold at loss in order to drive sales.

 

[Danke42]

Them:
I love capitalism, and the free market and whatever.

Me:
That knife costs $300 and the guy selling it makes some money to pay his bills

Them:

 

[madcap_magician]

The famous Sabanza! A genuine Kris Reef knive from the Guangdong province of Idaho, USA.

And you call yourselves knife enthusiasts!

The Legend of Sebenza Rock

 

[l1ranger]

I have an issue with the OPs choice of terms, If you think a knife is too expensive that is up to you too see or not the value, but you said markups, so unless you know for a fact what a dealer pays for the knife from the builder you have no idea what the markup is. Every dealer has a need to make profit in order to stay in business and it always amazing me people who "are sure" what that markup is. Usually they are very wrong, some retail item have large markups and many have small ones and some are sold at loss in order to drive sales.

I agree - if every dealer has a knife at or close to the same price - then that is just the price of the knife.
If one dealer has a knife that is listed 150 dollars more than all the other dealers, - that is markup.

 

[rpttrsn]

Most dealers who buy their knives from a wholesale supply company pay 1/2 of MSRP. I said most not all. So if they say the MSRP is $200 then they got it from the wholesaler for $100.
Now they show their price at say $170. Not sure what the wholesaler's mark up is. This was before the pandemic.

 

[catspa]

I agree - if every dealer has a knife at or close to the same price - then that is just the price of the knife.
If one dealer has a knife that is listed 150 dollars more than all the other dealers, - that is markup.

Maybe, or it could be additional hard cost that contributes to the value.

My old buddy Bill (dead now several years) was a high volume EBay seller back when it was fun. He specialized in antique car parts, having been in the old car hobby since about age 5, and had an encyclopedic knowledge of how old cars went together.

He charged high prices for his parts, and admitted it freely - in fact, he used to say he didn’t want any customer bragging to their friends about the deal they got from him. Sometimes he would turn a 200% profit on some part. Why would anybody buy from him?

Well, couple reasons. One, he had a huge barn full of parts, neatly sorted and organized on rows of 8’ shelves (that I built). Water pump for a ‘49 Buick? Sure, third row, halfway down, high up on the right. He had bins of bolt and nuts and cotter pins, and he’d include the fasteners you needed with your part.

‘Nother thing was, he shipped quickly after receiving payment. His wife quit her state job to manage his mail functions, and did a darn good job of it.

When I had leftover materials from a job, he’d have me build shipping crates for radiators and fragile trim parts before he listed them, so they didn’t have to cross the country in a cardboard box. He took in a lot of used parts, and occasionally bought a complete car to disassemble. He hired a couple local buddies to do that, and test and clean parts. One old guy, Chuck, was a genius with electric stuff. Bill wouldn’t sell an untested electrical part.

Anyway, all those things added value to his transactions, and he had casino mechanics asking him to keep an eye out for parts they wanted. He didn’t really care if you thought his price was too high, and he’d add 25 bucks if he thought you’d be a hassle to deal with. Probably 75% of his sales were to repeat customers. When he died, he had over 11,000 positive feedbacks and like 3 negatives. But rip him off one time, and he’d never speak to you again. Great guy, good friend. R. I. P.

Anyway, I can’t relate this exactly to the knife market, but I know that when you shop solely for low price, you overlook some other factors that might come back and bite you.

Ever buy anything from Benjamin at Baryonyx, here on the forum? His prices are fair, but his service is better and he’s hugely knowledgeable about his products. He invents his own products sometimes, that you can’t find elsewhere. If he charged double, I’d still buy from him, because he adds value to the transaction. (Don’t charge me double, if you’re reading this, I’m speaking hypothetically). But I’ve never felt like I got shorted in a deal with him, even if I found the item advertised for less someplace else.

So, markup is part of a deal, but not the biggest factor, and not worth complaining about in most cases IMHO.

Parker

 

[Landshark99]

Most dealers who buy their knives from a wholesale supply company pay 1/2 of MSRP. I said most not all. So if they say the MSRP is $200 then they got it from the wholesaler for $100.
Now they show their price at say $170. Not sure what the wholesaler's mark up is. This was before the pandemic.

Are you sure most dealers buy from a wholesaler and not the manufacturer, I would think it depends on the knife and I find it hard to believe there is that much of a mark up with a spyderco, benhmade, crk, hinderer, etc.

 

[Chris*33]

What bugs me, and i am talking specifically for ZT knives in Europe at this time, is the mark up on stock in hand. It seems that ZT pushed retailers to sell a few models closer to MSRP prices, but at least the mark-up could take effect on the next restock, since that stock would carry the increase in the prices of materials and shipping.

 

[220-9er]

I wonder if the OP has any idea of the markup in the shoes and apparel they wear or other items they normally purchase.
If not, look up a Keystone, a term used in retail pricing.
Different types of products and the volume normally sold have a big effect on how that segment of the market prices it's goods. For example grocery stores usually have a very low percentage markup compared to many others as do computers.
If I were him/her, I wouldn't waste my time and any of my few remaining brain cells walking around worrying about how much people are making of my frivolous purchases. Buy what you like if the price meets your perception of value, and if not, keep walking.

 

[VorpelSword]

The economics are fairly pure in the knife industry.

What can you make it for and how much do the customers want it pretty much rule the marketplace, I think.

Marke -Up?
Pre-Pandemic, there were Chinese knockoffs of CRK Green Beret knives on e-bay for well under $100. Looked perfict in profile and were advertised to use the then standard S35VN steel. If that was accurate (50-50 chance of that is my guess) then CRK was marking up their genuine product by 4 or 5X. . . . .how much were the Chinese marking up the knockoffs?

I used to have a close friend who ran/owned a Pawn shop. Over the4 years we talked about the econimics of retail and wholesale. A 5X makeup seems about right for a company to stay in business at retail.

Through in limited supply and high demand ant that 5x could explode.

Randall Knives are always wanted by more people than they can (or want to) make knives for. They manage the supply/demand situation by raising the price every year and putting everyone on a four-year waiting list for delivery. It cannot cost RM
K that much more to make their #1 All Purpose Fighter than it does Cold Steel to make their clone of that Randall knife. Yet ther4e is demand for both versions at their respective price points.

So, how badly do you want THAT knife?

 

[madcap_magician]

Pre-Pandemic, there were Chinese knockoffs of CRK Green Beret knives on e-bay for well under $100. Looked perfict in profile and were advertised to use the then standard S35VN steel. If that was accurate (50-50 chance of that is my guess) then CRK was marking up their genuine product by 4 or 5X. . . . .how much were the Chinese marking up the knockoffs?

This is also not markup, and it's akin to the president shouting at clouds about oil companies making record profits, when they are also incurring record costs for net profit margins that are pretty vanilla and in the middle of the pack for profits by industry sector.

Markup is percentage over cost. The Chinese selling a Green Beret knockoff for under $100 tells you only that the seller's cost was below $100 and tells you nothing at all about CRK's cost of goods sold or overhead expenses.

 

[VorpelSword]

^^^

That is all true.

In the past, CRK had imported unfinished hollow handle knives from South Africa. The blades were ground and finished here. I was thinking (without any evidence) that perhaps, CRK had been getting finished or partially complete Grteen Beret knives from China before everything went to heck in 2020. For a short while there was a real price spike in e-bay offerings for that model along with a serious lack of product freely available.

I have no evidence other than my fevered speculation. Perhaps I am jaded to the point of skeptical paranoia by the extensive quicksand for truth found in every information outlet today.

 

[Danke42]

There's a reason why "knock offs", "clones", "homages", or as I call them outright theft cost less. For starters they don't need to do any homework; and then after that for the offshore stuff there is a pretty well established track record of the steel being not as advertised and in fact much lower quality.

So if someone want a fake CRK Green Beret to post on the gram and gain champagne clout on a beer budget that would for sure work. But for anyone who plans to use a knife that's the dumbest thing you could do.

Companies that have been in business for decades have a solid grasp on what they need to sell their products for vs. their costs to stay in business. For a smaill high quality company that has always seen high demand the only solution is to use a wait list (not pre-orders by the way).

And last I really doubt anyone in retail is able to run 5x retail unless you're a Rolex boutique or something in the luxury good category.