Makers, Manufactures, justifying the "HI" Price for product

[cncpro11]

I love when people complain about the cost of a knife relative to a gun.
You buy a knife once and if properly maintained, it may last you a lifetime.
How many more thousands of dollars needs to be spent on ammunition and range time to enjoy that gun? I'm not kidding when I say I could nearly buy a Sebenza every time I go to the range, so in that regard I find it very easy to justify the price of some knives.

 

[GatorFlash1]

There have been several threads on this "general" sub forum that seem like people have no schooling in business, or real world experence running a business. Having done that for about 25 years. I understand making a product, or providing service is or was fun. But there is in many cases a huge investment in time, equiptment, and money..

I'm thinking that if the cost of production is so much less than selling price, and the profit so unreasonably excessive I should get into the knife business, as should all others who feel this way. We should all milk this cow like the current knife makers are doing.

What am I missing. It can't be very expensive to manufacture knives.

Thoughts?

 

[RX-79G]

I'm thinking that if the cost of production is so much less than selling price, and the profit so unreasonably excessive I should get into the knife business, as should all others who feel this way. We should I milk this cow like the current knife makers are doing.

What am I missing. It can't be very expensive to manufacture knives.

Thoughts?

If you can manufacture the knives and sell them directly at average retail costs, it could be very profitable. Something like Survive Knives business.

But most of the profits are subdivided by the distribution chain, and end up being about the same as selling diapers or fish food.

 

[PURPLEDC]

I'm thinking that if the cost of production is so much less than selling price, and the profit so unreasonably excessive I should get into the knife business, as should all others who feel this way. We should I milk this cow like the current knife makers are doing.

What am I missing. It can't be very expensive to manufacture knives.

Thoughts?

Its being done. There are more makers popping up per month than there was per year a decade ago. Think about how many reviews you see on youtube from makers whos books are full yet yesterday you didnt know their names. And at this point i am so utterly sick of the word midtech that i lurch everytime i read it.... See i just puked in my mouth a little. Just do me a favor, if you do join in this modern day gold rush make sure you have a product worth buying. I really am tired of prison shank customs.

 

[bearcut]

its being done. There are more makers popping up per month than there was per year a decade ago. Just do me a favor, if you do join in this modern day gold rush make sure you have a product worth buying. I really am tired of prison shank customs.

lol!
How true...

 

[sirupatespecial]

I guess you missed most of what I said. The retailer can sell the knife for whatever they want as well. The manufacturer can also choose which dealers they will sell to. If the dealer doesn't sell the knife for what the maker is asking them to then the maker can just not sell them anymore knives to resell. If I sell you a knife and ask you not to resell it for whatever and you do, I can simply choose not to sell you anymore knives.

I don't think this is a good business practice but a manufacturer has a right to do it.

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Good. I'm pretty sure we agree then. I never said there was anything illegal with it. I just said that I didn't like it. And I don't think it is a very good business practice. Based on a couple of examples. Still, and based on many comments here, supply and demand is King. When the supply goes up, or eventually the demand goes down, someone is going to be stuck. Either the manufacturer is going out of business, retailer is going to be stuck with product or/and all of the above, the buyer is gonna find out that he paid way too much for his "not so hot anymore knife". It happens all the time. And apparently no one learns that lesson. It's like building a better mousetrap though. It's all good until people find out an old mousetrap does the same thing for less money.

As they say "sell the sizzle, not the steak".

 

[J85909266]

:thumbup:

Its being done. There are more makers popping up per month than there was per year a decade ago. Think about how many reviews you see on youtube from makers whos books are full yet yesterday you didnt know their names. And at this point i am so utterly sick of the word midtech that i lurch everytime i read it.... See i just puked in my mouth a little. Just do me a favor, if you do join in this modern day gold rush make sure you have a product worth buying. I really am tired of prison shank customs.

Indeed.

 

[popedandy]

There have been several threads on this "general" sub forum that seem like people have no schooling in business, or real world experence running a business. Having done that for about 25 years. I understand making a product, or providing service is or was fun. But there is in many cases a huge investment in time, equiptment, and money.

MONEY FOR:

Permits, licences, and just getting the city, county, or state were you want to operate to give you the OK.

Than add Rent or Cost of Building to run the business out of.

Than add equiptment, small tools, supplies, etc.

Than add telephone, fax, internet, web-page, computers, telephone, copy machine, printer, plus maybe some stationary supplies. Printer cartridges, paper, pencils, business cards, and the list goes on.

Utilities, for light, heat, telephone, and of course water.

Now business insurance, and if you manufacturer anything were you ever repackage. BUSINESS LIABILITY INSURANCE. Should someone do something like cut them selves, because you forget the WARNING STICKER IN. Fill in the blank , for the launguage your forgot to print on your warn sticker.

Lawer on call, or retainer. Good accountant to keep you straight with your "silent partners" (city, state, and federal government) Who all want their share of your profits. TAXES.

I am sure I have not cover it all, but if you have employees. Worker compensation, pay their Social Security, and other expences of having paid staff.

Those cost are passed along to the consumer in the price of that expensive knife.

I understand all that, and I am willing to pay more to support my area knife store. However, the internet retailers that I do business with also have brick-and-mortar stores - I have been in those stores so I know they are legitimate stores - and have the same costs. I also have to drive an hour to go to my area knife store. That isn't their fault, it is my choice and one I am happy to make because they are a great outfit to do business with. Tax on the knives is generally not much different than the shipping cost from the internet retailer, so that isn't a factor.

What really gets me to drive to the store is that it is run by knowledgeable folks who enjoy talking knives and really enjoy helping customers find something that will suit them, and they have an excellent selection of knives so I can actually handle something before buying it. That last factor is key - although I have spent a fair bit of money on knives, my overall knife expenditures have probably been less than they would have been because I have decided against buying several very popular knives after handling them. These days my decision-making process is pretty simple - I call them to see if they have what I am looking for. If they have it, I go in and check it out. If I like it, I buy it from them. Do I pay more? Sometimes, but not always, and never enough to make me go elsewhere.

This is in contrast to a knife store that is a bit farther away, but has a great selection of knives and very knowledgeable staff. It is a family-run store that is attached to their home. I purchased from them a couple of times, but the next couple of times I drove an hour and a half to find that they had decided to close that Saturday because they had some family stuff to do. I also realized that they charged full retail price for their product. So they had two of the things I was looking for - great selection and knowledgeable staff, but two things that pushed me away - unjustifiably (to me) high prices and unpredictable hours. After driving up there two times in a row to find that they were closed during their normally scheduled hours, I swore I would never do business with them again.

It is interesting to note that the store I frequent probably has significantly higher business expenses than the other one, so it is obvious, as I am sure you know from running businesses for so long, that once you get beyond the expenses there are things you can do to build a loyal customer base.

 

[whp]

I don't think this is a good business practice but a manufacturer has a right to do it.

Agree.

 

[whp]

I love when people complain about the cost of a knife relative to a gun.
You buy a knife once and if properly maintained, it may last you a lifetime.
How many more thousands of dollars needs to be spent on ammunition and range time to enjoy that gun? I'm not kidding when I say I could nearly buy a Sebenza every time I go to the range, so in that regard I find it very easy to justify the price of some knives.

That s some seriouus range time.

 

[cncpro11]

Yeah, when my wife and two sons go, it's easily 1,000 - 1,500 rounds in an afternoon.