Makers~How Many Knives?

Kevin Jones

Kevin Jones

Joined
Oct 28, 2006
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There has been some discussion lately regarding maker waiting list, quantity of knives on order, quantity of knives on the secondary market and supply & demand in general as it relates to the customs industry. All interesting and important subjects.

The quantity of knives that a maker produces is very important as it ties directly into his pricing/profit structure. I assume a maker could produce himself right out of business. We most often associate manufacturers and retailers going out of business because of lack of sales, however often it's because of un-controlled growth resulting in inflated overhead and insufficient profit on sales.

IMO, the most successful makers are very consistent in quantity made from year to year. A consistence production/sales strategy is important for a maker being successful long term.
Perhaps some maker's long waiting list are part of their production/sales strategy?

If a maker produces too few knives he/she can't generate enough income to stay in business. If he/she produces too many and floods the market (either primary and/or secondary) his prices will drop again creating financial hardship.

IMO, a sound plan would be for a maker to produce fewer knives as possible while being knives that will sell at the highest price.
You can probably think of a few makers that are successful at this.

So makers, how many knives do you generally produce in a year?

Do you have a production strategy or do you just make knives as you need income or just when the notion strikes you?

Does it bother you when you notice your knives accumulating on the dealer websites or not moving on the secondary market?
I have actually heard of makers buying or taking their knives back that are not selling on dealer sites.

Do you use your special orders to manage cash flow?

Collectors, dealers what are your views/opinions on this subject?

Does a soft secondary market or seeing your primary maker's knives accumulating on the websites bother you?

Makers, I realize some of you may feel the answers to these questions are personnel business information.

But even if there's not much response to this thread, perhaps it will get us all thinking.

As always, thank you in advance for your participation.
 
I would think its natural for a maker with consistent production of many knives, to see some stuck on websites for long periods. I'm certainly not a maker, or a dealer, but it seems to me that if the maker sells knives almost as consistently as he is producing them, then he/she is doing fine.

It's those making a limited number of knives who I would worry about if their products aren't selling and possibly losing value in the market.

It sometimes hurts to see a knife by a maker I like which is not selling for a long period of time. I would bet if the maker took the knives back and sold them at their table, they might have more success. I buy a majority of knives from dealers so I am not bashing that method of purchasing, whatsoever. I think we can sometimes get some kind of a thrill from purchasing directly from the maker. It can be a gratifying experience.

Great thread Kevin. Cant wait to read the rest.
 
Consistency of numbers is good for predictable cash flow and ease of making and buying of raw materials but the price the maker pays is to be associated with just one or two styles of knives and that can be a disadvantage if the market changes or newer makers get into the same style and undercuts you.

Personally, I don't strive of consistency of numbers of knives made or sold. I don't want to make the same style of knife over and over again. I think this is what you mean by flooding the market. I think if a maker has many different styles of knives, then there is no danger of that.

I prefer to innovate as much as possible and go into different directions from year to year. Although I have a couple of styles that I have a backlog on, its not really my intention to do that but simply market demand. Making the same styles for long periods also limits one's learning and development as a maker, I firmly believe a maker should always challenge himself and keep getting out of the comfort zone or stagnant as a creative person.




www.shingcraft.com
 
I know for a fact that in his 22 year career as a custom knifemaker,
Edmund Davidson has made (to date) over 2,850 Integrals and
Semi-Integrals.
He has about 307 different patterns, a three year waiting list and is
known to be on time with all his orders.

He does all this and also manages to make a few extra knives for every
show he attends as well as create several outstanding pieces like the
Orgasmatron, shown below, that he works on for several years
(in between everything else), till they are completed.

He also has log books with all the details about every knife he ever
made, including the date they were finished and who the buyer was......


All the best,
David Darom (ddd)

From my book "Edmund Davidson, the Art of the Integral Knife"
picture.JPG
 
Kevin Jones said:
IMO, a sound plan would be for a maker to produce fewer knives as possible while being knives that will sell at the highest price.
You can probably think of a few makers that are successful at this.
Click to expand...

Makers need to have a plan all right, but there are just too many variables for there to be one plan that is sound for all makers. For example, consideration must be given to:

1) the maker's market - the types of knives he makes and to whom he sells them;
2) the maker's position in that market;
3) the maker's position in his own professional development continuum...

etc.

For a maker like, say, Fisk - who is firmly established high in the upper upper eschelon - making a fewer number of knives that will fetch collectively higher prices makes sense. I don't presume to speak for Jerry (whom you can be sure has a plan - and a sound one at that) but it is fair to observe that the bulk of the knives he is producing today are not wood handled carbon steel, plain-guard-and-pins Senderos. This makes perfect sense to me given his market position - now.

By the same token, producing a (comparatively) small quantity of highly complex and highly embellished pieces would not likely have been a sound plan earlier in his career.

Roger
 
Roger is correct about market position but until you reach those lofty heights it is necessary to take any work that will put groceries on the table.

Selling through dealers is problematic, if you are not overpriced by 30% (dealer discount rate), there is no real profit in selling through them.

If you raise your prices to accomodate dealers will your regular customer base still deal with you?

In order to maintain cash flow a wide customer base is required and that means a wide range of product.

George
 
Wow Kevin, you ask the hard questions. I am guessing that a lot of makers won’t be responding to this thread because it is personal and may reveal a marketing strategy that could be controversial. I am going to jump in though because I think it is important that collectors, dealers and makers understand various marketing methods.

I make, as many knives each month as I possibly can and price them based on material and time studies not on what the market will bear. I am always researching new equipment and work procedures to make my job easier, faster and better. To make up for improvements in time spent making knives I don’t lower prices or work fewer hours but seek out new market areas to sell more knives. I try and keep my delivery time to within 1 year. I have found that when developing new markets people are not used to or willing to wait for much longer than that. Established custom knife collectors are willing to accept long waits because that is common in this industry. Some makers and collectors see this long wait as a status symbol and I suppose it does work for some makers. To me a wait time is relative to how many knives a maker produces each month and comparing makers is often like apples to oranges.

I firmly believe that creating a broader customer base is good job security and will be more helpful in selling on the secondary market than limiting production.

Example: If maker A produces and sells 20 knives per year he will probably sell them to about 12 different customers. (Some of his buyers are going to collect his work and buy more than 1 piece) At the end of the year he will have about 8 or 9 people that are looking to possibly buy more of his knives.

Maker B produces and sells 40 knives per year. He will probably sell to 30 different customers. At the end of the year he will have about 23 or so looking to possibly buy more of his knives. He has a broader customer base, which is good for the secondary market. It is also good for the maker because if he loses a customer to other interests, death or economics his percentage of loss is less than maker A.

This strategy has been working for me for a long time. I make a lot of knives and sell them to a lot of new potential collectors that are now not reading Blade magazine and looking on Knife Dealer web sites. But as they slowly gain more education and interest in custom knives many will become serious collectors. If all makers would seek out new customers in new areas we would all benefit. There are a lot of un-tapped markets out there and in this business the more the merrier.

Daniel
 
I have wondered about this allot in the past year and have talked to some of what I feel are the upper echelon of makers in the abs includeing Larry Fuegen, Tim Hancock, Shane Taylor and Daniel Winkler about this. They all have different Philosiphies and what i came up with for me anyway was that i needed to slow my production from about 50 knives a year to about 30 in order to spend more time on the fit and finish and overall quality of my product. Now i am in a different situation than most in that i have a real job that pays the bills and i am trying my darndest to produce the best knife i can at my skill level an push myself on every knife to my limits. This is my view at this point in my career it may change in the future but for now this is what i am doing.
 
Very interesting thread. It is fun to see how some makers are so completely pro in their approach whereas others (I assume) go with the flow.
 
For me, it's about how many QUALITY knives I can build in a year. I think I am kind of like Dan Winkler here-I can't produce enough knives to flood the market (at least I have not been able to yet), and the more knives I am able to put into customers hands, the more repeat business I am able to generate.

Repeat business has a lot to do with the quality level of the first knife a customer buys, regardless of price. If I sell 50 people knives, and they never buy another, I am not going to be successful in the long term. I would rather sell 25 people knives, and have them come back for another each show, or each year.

My primary weakness from the business perspective is managing orders and delivery. Part of this has to do with my current situation-2 teenage boys living at home, and my desire to put them ahead of keeping to a rigid schedule. That's a choice I have made, and as a result I don't take orders right now, and focus instead on bringing more knives to shows.

I would love to be like Edmund Davidson-WOW! Very impressive stats there, both for production and consistency of delivery. Definitely something to strive for.
 
Kevin, interesting thread.

1, I make around 40 knives per year. 37 in 2007 and 44 in 06.

2, My production strategy, is to make as many knives as I can. I've been full time for 17 years and have never been able to make enough to supply demand.

3, Yes it does, I watch the secondary market closely and try and help collectors and dealers sell my knives.

4, I do not use orders for cash flow (actually all the knives I make are cash flow:)). I work on orders most of the time, unless I'm getting ready for a show. When my black log of orders is down, I will offer more knives on my site. This is my #1 priority at this time.
 
DWinkler said:
Wow Kevin, you ask the hard questions. I am guessing that a lot of makers won’t be responding to this thread because it is personal and may reveal a marketing strategy that could be controversial. I am going to jump in though because I think it is important that collectors, dealers and makers understand various marketing methods.

I make, as many knives each month as I possibly can and price them based on material and time studies not on what the market will bear. I am always researching new equipment and work procedures to make my job easier, faster and better. To make up for improvements in time spent making knives I don’t lower prices or work fewer hours but seek out new market areas to sell more knives. I try and keep my delivery time to within 1 year. I have found that when developing new markets people are not used to or willing to wait for much longer than that. Established custom knife collectors are willing to accept long waits because that is common in this industry. Some makers and collectors see this long wait as a status symbol and I suppose it does work for some makers. To me a wait time is relative to how many knives a maker produces each month and comparing makers is often like apples to oranges.

I firmly believe that creating a broader customer base is good job security and will be more helpful in selling on the secondary market than limiting production.

Example: If maker A produces and sells 20 knives per year he will probably sell them to about 12 different customers. (Some of his buyers are going to collect his work and buy more than 1 piece) At the end of the year he will have about 8 or 9 people that are looking to possibly buy more of his knives.

Maker B produces and sells 40 knives per year. He will probably sell to 30 different customers. At the end of the year he will have about 23 or so looking to possibly buy more of his knives. He has a broader customer base, which is good for the secondary market. It is also good for the maker because if he loses a customer to other interests, death or economics his percentage of loss is less than maker A.

This strategy has been working for me for a long time. I make a lot of knives and sell them to a lot of new potential collectors that are now not reading Blade magazine and looking on Knife Dealer web sites. But as they slowly gain more education and interest in custom knives many will become serious collectors. If all makers would seek out new customers in new areas we would all benefit. There are a lot of un-tapped markets out there and in this business the more the merrier.

Daniel
Click to expand...

Yep, I do ask the hard questions, but the folks with the answers usually respond. ;) :thumbup:
Thanks for sharing this information Daniel.
You makers are an unselfish bunch in being so open and honest in sake of educating makers and collectors.
 
After reading the other thread on makers and the secondary market, I'm not so sure we are all on the same page in regard to the meaning of secondary market as it applies to custom knives. Or perhaps I don't know.
My definition in as far as the context I use it above is “the market in which a custom knife is sold by other means than the original sale by the original maker".

IMO, a maker does not play a direct role in the secondary market unless he buys back one of his pieces from a dealer that has set for a long duration or other reasons. He does however effect the secondary market and is effected by it.

As eluted to in my opening post, if a maker produces too many new knives, then his knives on the secondary market will most likely suffer as most collectors are more willing to buy and pay more for a maker's new knives than previously sold knives by the same maker in the same style and condition.

And conversely if a maker's previously sold knives are not selling on the secondary market, then it will eventually have a negative impact on the sales of his new knives as collectors will become concerned that they will not be able to recover their purchase price or even sell the knife if later desired.
 
Since taking on my "real" job ;) I don't have to worry about the cash-flow part so much. I never had that aspect worked out anyway. When I was full-time, I did know a lot of things that could have made my knifemaking bring in more money... but they were things I didn't want to do. I was more interested in challenging myself and getting better. I could have made a couple bare bone hunters a month for a simple and positive cash flow, but I never did.


So with it being part time for me now, I have the luxury of approaching knifemaking still quite a bit like I used to, but without any head-aches over making money off of them.

I actually do have a strategy! :D


At this point, I am working hard to get all of my current orders done and out the door. I refuse to rush ANY of them, but I do want to get them done.

Once I get to a "clean slate" then I plan to make as many knives as I can while continuing to "grow." I want to keep a few simple ones in there so that I can sell some knives to users/budding collectors, as well as strive for some of those really high end pieces.

I have been extremely fortunate that my knives have usually sold pretty quick and not sat on dealers' sites for an exhorbitant amount of time. I think if one did, I would buy it back and either stash it or figure out how to make it a desirable piece.

I think I made about 12 knives last year... I started about 50! lol... I am planning on getting something more like 25-30 (from as simple as a 1084 hunter to as complex as damascus integrals) out the door this year. I think this is enough to satisfy buyers, and not flood the market.

We'll see :)
 
NickWheeler said:
... I am planning on getting something more like 25-30 (from as simple as a 1084 hunter to as complex as damascus integrals) out the door this year. I think this is enough to satisfy buyers, and not flood the market.

We'll see :)
Click to expand...

I can't say for sure, but Peter, Joss, Coop and I may be dancing a simultaneous jig right now. :thumbup:

Roger
 
Thought I'd put my .02 in.

I usually make between 40 and 50. Last year was less because my sword and dagger work took up some time. I don't worry about a specific amount of knives. I work every day and at the end of the year the number of $ is more important that the number of knives.

I do watch the secondary market. If I'm seeing more than 6 or eight knives on the secondary market I try to dry that up a bit by not selling to dealers for a show or two. I don't think it does the maker or dealer good to have a pile of knives available all over the Internet. I don't buy them back though. In saying that if I don't have any knives available through dealers I will make an effort to fix that as well. Having knives on dealers site is great free advertising and the best dealer sites reach a vast array of collectors. Dealers are a great tool if used correctly and both sides will benefit.

I don't understand the cash flow question. Everything I make is cash flow. If I don't make knives then I starve. I don't have a second income, however my wife is a teacher and that cushion is definitely nice to have, especially when preparing for a show while there is knife knife order money coming in.
 
This is a great thread. I am far to new of a maker to have production number standards set. I have spent alot of time considering what I should spend the most time on. I forge and like to make damascus but at this point making the "cooler" stuff is not very profitable. Most of my time in the shop is spent making using knives.
I wonder though how I am going to manage to break through to the Art knife realm I long to be in. It will be a long road. Its hard for me to make it to the big shows considering where I live and the cost of travel. In fact Novi this spring will be my first real knife show. I will not have a table but I will be there with Delbert Ealy.
In the past year or so I have sold most everything I have made within a couple of months. I have had very few orders. I sold about 30 knives in the past year.

Well I thought I would share some of my feelings and add a "new guy" perspectve.
Take care.
 
joshsmith said:
Thought I'd put my .02 in.

I usually make between 40 and 50. Last year was less because my sword and dagger work took up some time. I don't worry about a specific amount of knives. I work every day and at the end of the year the number of $ is more important that the number of knives.

I do watch the secondary market. If I'm seeing more than 6 or eight knives on the secondary market I try to dry that up a bit by not selling to dealers for a show or two. I don't think it does the maker or dealer good to have a pile of knives available all over the Internet. I don't buy them back though. In saying that if I don't have any knives available through dealers I will make an effort to fix that as well. Having knives on dealers site is great free advertising and the best dealer sites reach a vast array of collectors. Dealers are a great tool if used correctly and both sides will benefit.

I don't understand the cash flow question. Everything I make is cash flow. If I don't make knives then I starve. I don't have a second income, however my wife is a teacher and that cushion is definitely nice to have, especially when preparing for a show while there is knife knife order money coming in.
Click to expand...

Good information Josh. Thanks for sharing. I was unclear as to my question regarding cash flow.
I wasn't addressing makers like yourself where most everything is pre-sold, but new or up and coming makers. I was wondering it these makers tried to keep a couple special orders in reserve so to speak to help "fill in" when not making knives for shows, dealers or things are slow so to help with cash flow and to keep them working and gaining experience.
 
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