Knives as a commodity

Wolfman,

Excellent question.

First rule of knife collecting "Buy What You Like". It must be true it's in my book.;)

Something becomes a commodity when it's net worth becomes higher than it's face value. That is to say, a widget that has a net value (retail or wholesale price) now has more worth than it's original price. At that point, it becomes a commodity that can be used to increase your cash flow. As such you begin to view it in a different light.

As a numismatist (coin collector) I am always looking through my change for buffalo nickels, "wheatie" pennys, pre-64 half dollars etc. Why, because these can be had for their face value in your change. By taking it out of my change and offering it for sale through the right venue, I can make money.

There seems to be a nasty undertone in this thread that selling a knife for fun or profit is a bad thing. It is not. By selling and trading your knives (usually at a loss because many of us buy what we like instead of what we should buy). We allow others to join us as custom knife collectors. Remember, eventually someone is going to sell your knives. After all you don't expect your loved ones to put them in the ground with you!

I can see Para now smiling down from the great beyond as he watches his grand children take his Warenski and Lovestrand to the flea market and get almost $50 for them! The thoughts he would think and the language he would use would catch him that express elevator straight south from his lofty perch! :D

On a serious note here, you should make a list of what you paid for the knives and a list of people for your family to contact to get the most out of your knives. You many not have cared if you made a dime on your knives while you were alive. But you will want your family to get every penny they can out of your knives.

Wolfman, Dealers may be the ulitimate collectors. The established dealers I know are walking talking books on custom knives. They posses incredible amounts of knowledge on all aspects of not only knife making...but knife selling and trading. We don't spend all this time learning about custom knives, just because we view them as a commodity.

I know for myself if I was just in it for the money I would sell those other knives. It's been so long, what do they call them..Oh yea...Factory knives. :D

Are knives commodities? Yes. Are they collectibles that become a inseperable part of our life? Yes. Will there come a time when these personal treasures will no longer be ours? Unfortunately, yes.

So enjoy them while you have them.

Just remember to say NO to Jigged Bone and Mokume. :barf:
 
To ALL, I thank you for answering this question here and via E-mail. WHY did this become an issue?:confused: :confused:
I decided to trade one of my THREE hand-made knives for something more suitable to my personal tastes. I posted it here on BF. During the first days, there were several E-mails, offering a variety of the "tactical type folder or fixed blades" I had narrowed the choices to. I did NOT want to SELL it and I did not want another MOP knife. I placed a dollar amount $100.00 MORE than the person I had obtained this knife from.
During the course of my very FIRST real serious voyage into the world of the "knife exchange" I had three serious offers. It was discovered that the knife in question was posted on another's site for $400, not the $500 I had placed as the asking price. I did this to give me some "haggle space", just like a car salesman. AND THAT is what I began to feel like. I was VERY up front with who, what, where and HOW MUCH. I made no secrets about the original selling price and my current ask price. Two formites BLASTED me into oblivion, claiming deception because my "cash" asking price was $500 and not $400.
The third formite gave me the most valuable education in the workings of "knife exchanging". To this fine gentleman, I THANK YOU. Whether I end up with a trade remains to be seen. Will I get a trade valued at $500? NO!!! Will it value even $400, NO!!! Is it a fair trade? Yes, because I am very happy with the offer made.
Did I lose money? In a financial sense I did, but in a knife collecting sense I do not believe so.
I DID DISCOVER that to some, knives are a PRODUCT. NOTHING MORE. They can rattle off every maker, their business address, their phone number. They can even tell the personal history of EVERY knife-maker. When it comes to the topic of knives they are walking encylopedias. BUT, BUT, BUT, when it comes to the love of knives, they are merely walking "Wall Street Journals". Their knowledge MUST be keen because knives are their "commodity" and BF, KF, E-bay, shows, etc. is their "Wall Street". I found this at first disgusting, but then I tried to relate it to guns. IT JUST DID NOT feel the same as guns.:( :(
I could join any conversation about firearms and regardless of who I was dealing with could play at the highest levels. I have wheeled and dealed in guns for 26 years. I own or have owned everything from a Raven to an unfired 1921 Thompson, serial number XX. But guns never sparked any true emotions inside of me, they were just "guns".
Now, I find myself involved in knives. I am addicted to knives. I cannot get enough of knives. I spend hours upon hours here reading and writing about KNIVES. I have a difficult time finding ANY of the knife magazines here in the boonies, so I travel to Boston to pick up reading material every couple of Months. I have just finished equipping my home "knife-lovers workbench" THANKS to the GREAT advice from MANY here on BF.
BUT, I started to wonder if there was SERIOUS money to be made in the knife world. Could I move capital from Wall Street to Knife-Street and have a better return on my money?
WEll, it is 2:26 AM, and I have tossed and turned now for four days. I have developed an enormous LOVE for knives. They have filled a large void in my life and have helped me to meet some wonderful people I can call "friends". I do not have many of those. In the world of Guns, it's always been the same "kind" of person I associated with. Telling "war stories", talking about world events, and general sh*t shooting had the same underlying theme. BORING:rolleyes:
So I needed to decide if I was going to try to fit in as a true knife lover, adapt my personal style, and modify my conduct, to fit in with a much broader sampling of PEOPLE. AND, Do I fit in as a true collector with a deep love for knives or just expand my knowledge and make some potentially SERIOUS returns on a financial investment.
I am finished with this thread. My question is answered. I can now see the light and move forward. I do so, from this second on, as a TRUE knife-LOVER, collector, and a new person. Money still remains a very important part of life, but I can FINALLY say that I became very involved with knives NOT for money, but for the PURE LOVE OF THIS GREAT HOBBY.......Thanks.......Ira;) ;) :D
 
Originally posted by Les Robertson
...After all you don't expect your loved ones to put them in the ground with you!

I can see Para now smiling down from the great beyond as he watches his grand children take his Warenski and Lovestrand to the flea market and get almost $50 for them! The thoughts he would think and the language he would use would catch him that express elevator straight south from his lofty perch! :D
Click to expand...

LOL Les! The money is gone, the knives are Mine, if my offspring are stupid enough to sell my knives at a flea market for $50, well then, God bless them. :)

Wolfmann, PLEASE do not take your families money and start buying expensive knives as an investment. As far as I can tell, most knife dealers have to work VERY hard and know an enormous amount about their business before they can make a profit. As Les said, the rule in knife collecting is Buy What You Like. The reason for that is simple. If you pay more money than you can sell the knife for, you still have something you like.

To be a knife dealer or knife trader, you have to buy what Other People Will Like. Since you are not them, it may be difficult for you to properly assess the true market and market value for knives. You need to spend at least another ten years reading and learning about knives or you are going to tie up a bunch of money that may not earn anything for a long time.

You are much better off to invest in the stock market than in knives. Successful dealers like Les have many decades of knife experience and MBA's and a willingness to work All the Time. Folks that bought Loveless and Moran knives in the seventies were LUCKY if they waited the 30 years for those modest investments to make many times what the stock market did during that time (about 10 fold). Most of the knife dealers work on very SMALL margins of profit and rely on lots of inventory (lots of capitol investment) and great expense for advertising, going to shows, and running web sites.

I would suggest you buy a couple of really fine knives from people you can trust. Enjoy them. And keep the bulk of your money in places that you KNOW will make money. Good Luck.

Para
 
Para,

Now I see where the cofusion comes from. "To be a knife dealer or knife trader, you have to buy what Other People Will Like."

Para, that is incorrect. I do not buy what other people like. If I don't like the knife or like the maker, I don't buy the knife. This way I never have to mis-represent a product or a maker just to make a sale.

If I only wanted to buy and re-sell I would not have gone through the years of planning and developing the first series of knives (LDC Custom Knives) and now the Vanguard knives. Ever wonder why no one else has done this?

Wolfman, I do agree with what Para wrote here.

"Since you are not them, it may be difficult for you to properly assess the true market and market value for knives. You need to spend at least another ten years reading and learning about knives or you are going to tie up a bunch of money that may not earn anything for a long time."

There are about 10 dealers in the US that currently have been selling custom knives for over 10 years.

There is ONLY ONE DEALER in the US whose only source of income is selling ONLY Custom Knives.

As Para says, 10+ years of being a dealer, an MBA and a willingness to work all hours day and night does not hurt either. But remember, it's not work if you love what you are doing.

I also agree with Para that investing in the stock market is a smarter move long term than investing in custom knives. However, if the market is down, you have an excellent knowledge base of custom knives, you have the captial to invest and you know what the hell your doing. Short-term....you will beat the pants off the market!

Remember, Financial Planners base most of their long term investment plans of the "Rule of 72" which says every 72 months (7 years) your money will double. That means a return of 12% every year.

That means to break even with the market and the "Rule of 72" you would have to buy a $400 knife and sell it for $448.00. Don't forget on investments you are going to pay fees and captial gains tax on your investments.

I will tell you this, there are a whole lot of investors out there right now that would love to see a 12% return this year.....and won't even get close to that. If you could buy and sell 5 knives a month and make that $48 per month. That would net you $240 per month return on investment. Don't forget, if you become a business while doing this, you get to deduct all your business expenses, to include the computer your looking at, the monthly ISP charge, etc.

Para, your going to like this as well. Lets say you have been a custom knife dealer for say 9 years. You have built up an inventory of approximately $80,000 (including computers, office furntiture, etc.). You have done this as a Sole Proprietorship.

You then "Legally Loan" all of this inventory to a new "C" Coporation. As it is with most new business's you have to borrow money to pay for the inventory. In this case you are receiving the inventory with no cash up front.

However, you will be making a monthly payment of say $1,100 + 10% interest back to the former owner of the sole proprietorship. This of course (since it is the re-payment of a loan) is non-taxable income.

Now it will take approximately 8 years to do this. So for that 8 years you are almost equal to the ROI that the Rule of 72 is based on. Plus you are getting tax free an additional $1,210 per month.

Of course the former sole proprieter has the option of "loaning" more money to the corporation and will then continue to get that same 10% ROI for as long as they can continue to loan money to the corporation.

Of course as a corporation you can set up a SEP (Simplified Employee Plan) and you can invest up to 35% of your profits into this 401K type plan, for each of your employees. Compare that to an IRA that allows you to (as of 2002) put in $3,000 for the year.

Also, here in Georgia, if you are a business owner you can hire your children age 12 and above as employees. You of course set them up with an IRA, investing the max of $2,000 per year (their salary is $2,400 for the year, no personal income tax under $2,500).

You invest that $2,000 per year from age 12 to 18 (Hopefully they leave the house then :D). By investing that money from 12-18 (and never putting in another dime). Using the rule of 72 and compounding interest at age 40, that child will have an investment valued at over $1 Million dollars.

Wolfman, Para looks at investing in custom knives from his perspective as a collector. This is normal and understandable. However, his view of investing (as I hope I have shown you a glimpse of here) is not the only way to use knives as an investment vehicle.

Yes, it is a lot of work. Then again, anything worth while is.

Personally, I feel you might be a little hard on yourself. Adopt Para point of view for awhile, enjoy the knives for what they are. But keep doing your homework and keep an eye out for that underpriced knife that you may be able to use as a short-term investment.
 
I certainly would lose my shirt if I turned this new found love of knives into a vehicle to make money. I have given away most of my profits and as MOST, traded down more times than I can count to get the knife I really want.
Nah, I would never be good at selling. I am too honest, and if something is a POS, it is a POS. I just cannot look someone in the eye and sell them snake oil.
I have learned a very valuable lesson. I love knives far too much, and know far too little to now, or ever become a trader for the sole purpose of making money. I do not have that DESIRE or LOVE of money to make knives a commodity.
Thanks again. NOW I can get my butt back to collecting and get back to begging my wife for money to buy the knives I LIKE:D :D ;) Ira
 
Wolfman, you just need to chill out a bit and learn to enjoy what you have without feeling compelled to buy, buy, buy every time you see something you might like.

Knives are a lousy investment, and they are by no means a comodity. Sure you might get lucky and have a few appreciate markedly over the years, but by no means can you count on this for any given knife, or even your whole collection as the value of even large collections is much affected by the fad of the moment what ever that may be.
 
Matthew,

Any good that is sold is a commodity. Tires, refrigerator, DVD's, etc.

Whether or not it is a good investment is based directly on your knowledge of that product and it's market at the time you are thinking of selling that item.

Example: Right this minute Microsoft stock at $80 a share a good investment or not?

The only way to know is to do some research.

There in lies the mistake that most new knife buyers (and even some experienced ones)make.

You used an excellent word in your post....FAD. Fad knives are lousy long term. However, they can be great short-term investments.

Of course you have to know the market. Especially, the aftermarket.

There are basic investment stratgies that can be implemented to increase the investment potential of your collection. Of course this will mean you have may not be able to buy any knife you like, just because it pleases you for the moment.

Matthew, to make a blanket statement that knives are a lousy investment shows you do not understand the market. Don't feel bad, you are in the majority.

Do you really think I could have made a good living selling custom knives for the last seven years if the knives I sold did not hold their value or had a chance to increase? While I am an advocate of buy what you like. I am even a stronger advocate of doing your homework.

Understanding the market allows me to offer a trade in policy on every knife I sell (except Emerson's) That is any knife you buy from me you can trade in for a more expensive knife down the road and I give you what you paid for the knife towards the purchase of the other knife.

The worst you do with that policy is break even.

Matthew do the the other dealers you buy from offer you that? Do the makers you buy from offer you that? If not, why do you think they don't?

There is downside to doing all this research. It takes away some of the fun and "spur of the moment" purchases and makes it seem a little more like work. The benefit is that the knives you purchase seem to hold their value and/or go up in value more so than the knives you bought before you started doing research.

Ok, here is what everyone wants to know...who should I be buying.

Here are some suggestions (in no particular order)

Jerry Fisk
Trace Rinaldi
RJ Martin
Larry Chew
George Herron
Kit Carson
Rob Simonich
Ernie Emerson (only non-date and old Emerson Logo)
Bob Loveless
Bill Moran
David Broadwell
Al Polkowski (particularly the Kasper designs)
John Fitch
Geno Denning
Knives with Stellite and Talonite blades
Tony Bose
Joel Chamblin
Walter Brend
Michael Walker
Ron Lake
Tactical D/A Folders
Harvey Dean
John W. Smith
Limited edition knives
Collaboration Knives: (Ralph/Simonich, Terzuola/Elishewitz, etc.)
Warren Osborne
Frank Centofante
WD Pease
Schuyler Lovestrand

The list goes on, those were just a few that popped into my head.

Not every maker or every knife has investment potential. It is your job as the buyer to know which does and which does not.

Can you tell if a knife maker is left or right handed? Are they ambidextrous? If you don't know, stop buying knives till you do know.

Investment potential starts with quality of work verus the price. Again, only you can make that determination for yourself.

As a custom knife entrepreneur who only gets paid for buying the right knives. I am not allowed the luxury of buying on a whim. I have to do my homework. Because I put my money where my mouth is everyday.
 
WOW, thats the answer:D :D I have re-read this thread three times and still had that BURNING question about buying knives as an investment or buying knives because I love knives. Les, you have answered the question for me, and let there be no bout adoubt it!!!!!

I have only one solid year in this new found addiction of mine. And I want to make it perfectly clear, I DO NOT want to buy EVERY knife. I most certainly plan on one day owning one from the list above, as well as several NOT mentioned. if I get lucky one day and I continue to learn this wonderful hobby, I might land a Scagel:eek: :eek: :eek: Hey, I can dream, can't I?

I am now all "chilled" out and VERY unhappy at the current cost of MICROSOFT. But, I did get very lucky with CENDANT, and DISNEY, and am just about at the break even point with UPS and AT&T.

But as far as knives go, I have alot to learn before I even think of buying a Randall, a Loveless or a Moran. No, not because they are big bucks, BECAUSE I am not yet at that level of collecting, and I MUST go one step at a time. When I am savy and smart enough to start talking Randall's, I KNOW who to call, and I best have my act together or I WILL pay the sticker price and never know the difference.

I have just recently started a collection. The knives in my safe are NOT for trade, sale or use. They are for my two Sons. I hope to fill my safe with beauties for us ALL to enjoy. Then and only then will I be a TRUE knife collector ;) ;) ;) Ira
 
Wolf:

I think you have part of your answer in your previous post where you indicated you sold off quite a few guns in order to buy knives. The same thing happens to knife nuts. Many times tastes change and a collector tires of the "novelty" of some of his knives and will sell them off in order to purchase the newest "object of his affection." And so on and so on.

Other than a very few real classic collectibles, such as Loveless, etc., I think putting your financial portfolio into knives is folly. Stick with stocks, bonds, mutual funds, etc. Even with an occaisionl economic downturn, the history speaks for itself.

I given away some knives, but have not sold any as of now. I buy them because I like knives. Period. I wouldn't change it for anything.
 
I really appreciate all the help getting focused again. If anyone found it strange or silly, so be it. But as I stated in one of my original posts, I started to find myself in E-mail pissing contests over knives, tried to trade just one Custom on the "knife echange", having to compete with some who have many knives to sell daily and start at one price and withing a day or two, have posted numerous "price reductions", a renewed sales pitch, several BTTT's and the great lines like " I am not a Dealer" "From my very large colcetion", "my tastes have changed", to the "I need cash to buy more knive". I was very confused as to what was going on and how folks could purport to be a very avid collector, but bought knives on Monday for $300 and reposted the SAME knife for $400 on Tuesday, and just had those 10 buck (BTTT) price slashers to fill up bandwith. I started to wonder if this was how collections were developed, or was this the way folks supplimented their income.
I now know I am a very simple, but highly motivated and sincerely dedicated knifeknut. I also fully realize I enjoy trading and buying, but selling is just NOT for me....Thanks again for all the help....HAPPY HOLIDAYS......Ira;) ;)
 
Originally posted by 92degrees
I have yet to buy a knife that didn't grow on me or become more cherished over time. How can you sell something after a couple of days?

If you buy something without regard for whether or not you'll like it or need it, then you're a trader -- not a collector.
Click to expand...

Yet you cannot know the motivation behind every for sale post, can you?

I don't know how long you've been "collecting" but I wish I have had the same luck as you seem to have had- to never have purchased a knife that you didn't quite like, or just rather have turned it into something else by way of the forums? "More cherished over time"...so you mean like since June or so?

You should be nicer to the folks who frequent Exchange to post knives for sale. For that privilege, they all bought memberships which help support ALL of the forums.


Originally posted by Professor

Not only that, but I guarandamntee you some of the hard hitters of late in the "Individual/Custom and Productions For Sale" forum are dealers, dealers, dealers...

People like what they've got, so they tolerate their presence. These are the guys you're never seeing posting elsewhere.
Click to expand...

Agreed. I know exactly which "hard hitters" you mean.

BTW, Professor, I've been meaning to ask you... what's up with that giant avatar of yours? Is it just my PC? Every time I'm viewing a thread you're in, that pic of the Benchmades staggers the screen. Did you have to pay extra for that or what? :D

Firebat
 
You can be a Collector and a TRADER. I do NOT know how one would do it any other way. I know of NO PLACE in this world where EVERY knife is located for a potential collector to handle, fondle and "check out" to see if it "fits". The neatest part of collecting is TRADING. I simply cannot stand to sell a knife. To me that makes it a COMMODITY. But to trade a knife for a knife, or a knife for a coin or a knife for a flshlight or watch, or whatever is all part of this GREAT LOVE of mine known as KNIFE COLLECTING....
You bet I can work out a trade for a knife, ship one off and get one back, only to wish I NEVER did so in the first place. I have traded for knives many times that I plain did not like AFTER holding it for only a few moments. That is what make knife collecting so much FUN. Try trading GUNS. There is far too much paperwork involved. In the knife-world, someone posts they have a XXXXX knife for sale/trade. If you THINK you might like it, you engage in Cyber-bartering in hopes of seeing that E-mail that says "IT'S A DEAL". Then a quick exchange of Address and within a week TWO collectors have a new knife with only the cost of shipping expended. Then WHAM, I HATE THIS KNIFE!!!! You bet it gets place in the "TRADE STOCK" section of MY COLLECTION.
Thats what has made me so addicted to knives. I can get a new knife virtually anytime I wish, without floating the full retail. There simply is no other way to DISCOVER whether that knife WILL BECOME a Cherished part of my knife collection.
But, I do not enjoy SELLING, and I certainly have had a great time being part of ALL of BF and not just the "knife exchange":D :D :D :D wolf
 
Just my little two cents:
I have seven knives either on me or on order each of which would be considered a "collector". Two of them are of runs of ten only and another is probably about the same. These seven represent (to me) "knife perfection" and will be carried/used every day. Each covers a different mode of carry and/or use and I've got it all covered (I think) in a way that's about as good as it gets (IMHO).
So before I go too far off on a tangent, collecting is a great thing if that's what you're into, but I personally wouldn't think of keeping any of these beauties locked up. They belong out there doing what they were intended for and I cherish every single scratch.
For investing, go to www.sageonline.com and do the Sage School. You'll learn all that you need to know and you will be best served by investing 100% on your own without any type of financial planner.
OK, the knives that do or will reside on or near me most of the time are:
Benchmade 705 Forum Knife
Crawford Shark
Tighe Spheron
Ralph/Simonich EDC
Polkowski Nomad (small)
Strider DB
Busse Combat Flying Tiger
 
I personally wouldn't think of keeping any of these beauties locked up. They belong out there doing what they were intended for and I cherish every single scratch.
Click to expand...

By the same token my collection consists largely of vintage knives. The average age runs around 40 years with many pieces dating to the 19th and 18th century. A large part of the game for me is to try to assemble and preserve some of history for posterity. Many of these knives must be preserved, not used, and not even cleaned agressively. Not everyone collects the latest black plastic tactical stuff.

Don't get me wrong, there is nothing wrong with collecting tactical knives, art knives, or anything else. We just need to be aware that this hobby is very rich and that there are all types of people participating in our hobby for their own reasons. It fantastic that we all have places like the Bladeforums to bring us all together to share our many perspectives. Just be aware that we have diversity, and respect that their perspective is no less and no more valid than your's.

The trading is understandable. When you start collecting you work very hard at acquiring many of the knives that you like. As your collections grows volume begins to weigh you down (did I mention that the wife begins to suggest the possibility of physical violence). After a while the collection starts to become a problem, it may be too large and cumbersome to manage, or , too complex and diversified to keep track of. Your knowledge base has also grown with the collection, before you never had known that their were so many distinct variations of each pattern. You start looking for ways to focus the collection, so the military knife collector starts to focus on knives of WWII, and then perhaps knives of the US from WWII, and perhaps later on they might even narrow the field down to just the Knives of the US Marines from the period. You can appreciate that each time the focus changes the collector strives to sell or trade off large portions of the collection, often the majority of it. So the longer that you are involved with this hobby the greater your tendency to trade and the more likely that you would want to trade a larger number of knives.

Many of the guys you see constantly trading on the exchange forum are very advanced collectors. They are where you might be in ten to twenty years. Hang in there and I'll look forward to seeing you at the swap meet.

n2s
 
If your just a working stiff with an expensive habit ( collecting knives ) than in my case and my opinion, you had better learn how to sell and trade knives also. Example: Not knowing everything about every knife and every maker I make those "fun, impulsive purchases" now if I don't like that knife once I get it, or it was not what I had expected it to be ( again because I only bought it because I liked the way it looked and I thought I would like it) What am I supposed to do then? Keep it like a good collector? No. I want to either trade it with someone for something else or sell it. And there is nothing wrong with or anything to feel bad about making money on a knife! I sure know I have spent more than a knife is worth because I wanted it. If someone wants to spend the money that's not your fault. I will pay way to much for a knife if I don't think I will have the chance to get one again or if it is a one of a kind. Knives are not Gold, most of them anyway, their value comes from their desirability. Those are the knives I "collect" the rest of them are just fun to see, appreciate and learn from. I do like to trade knives also. Do you want to know why? Because I love to get new knives and it FEELS GOOD to give other people that same feeling. I am a knife collector, I Love knives therefore I buy them, sell them, hoard them, lust over them and trade them. All you guys with exception to the jerks are just friends of mine that I have not met yet because we passionately share a common interest.
 
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