Market pricing trends compared to collecting trends- for discussion

[J. Doyle]

"There are makers of all different quality levels that offer knives for sale at a fraction of what they are worth in the current market."

What makes you think that? And how do you define "worth?"

I was referring to knives that appear to have decent fit and finish that are priced only very slightly more than the materials that went into them. This leaves almost no room for anything else so the maker is undervaluing (or not putting any value at all on) his time and his craftsmanship.

So I do not think it is prevalent or a big force on the overall market.

I think probably not, I was mostly referring to trends on the exchange areas of forums.

"they want a top tier knife with all the embellishment for a no frills working/using knife with field grade finish price."

Uh, yeah. Where and when do folks not want to get the best possible _____ (fill in the blank: house, car, knife) they can for the least possible money?

I do realize that there are those out there that want that, in any aspect of life. And I do see makers that once in a while help perpetuate that mindset. I for one, can't afford to do that as a full time maker. If they want the details and embellishments, they're going to pay for them. Those extras take me time to do them and my time is very valuable to me. I'm realizing that fact more and more all the time. If someone says "I want that knife but I want it for half the price", the only way to do that is start stripping away the extra details.

I have seen a few makers take an order for a knife then have the collector say, "I want to order a knife like this. Oh, I want to add that, and do this different, and add a spacer here and some filework here." Sometimes they expect that it should be the same price as the base knife and that's wrong. And sometimes the maker has said that they'll throw that extra stuff in for the same price and that's equally as wrong.

"Knives of similar quality, should be similarly priced in a perfect world.

If you are talking about "using knives" then maybe that makes sense.

I was talking about using knives in this statement. Forgot to clarify that.

The "worth" of a collectible item depends on a huge host of factors beyond intrinsic quality. That applies to cars, watches, guns, books, knives . . . anything folks collect. Give me an original Loveless knife from Riverside and set it next to a beautiful Loveless-style knife by any of a half dozen excellent makers. I can assure you that in many cases the knives by these other makers will be of superior quality to the knife from Loveless himself. But all other things being equal, the Loveless "original" still will be "worth" more. A lot more.

When it comes to knives, do not discount the importance of a maker's name, fame and reputation on the "worth" of his knives to collectors. In some sectors of the market, it is the most important factor - almost the only factor. There are reasons that some makers have a very difficult time making ends meet, and a few select makers have collectors climbing over each other to spend $10K, $20K, $30K and more for one of their knives. And those reasons cannot always or completely be explained by intrinsic quality.

I understand what you're saying and I've seen that too. I don't always understand why, about the Loveless example particularly, but I do know what you mean.

"In any trade, like construction for instance, bids are close and competitive and no one likes to have their bid cut in half by anyone."

No. But buyers love it and will take advantage of it every time the opportunity is presented. It's a tough world out there! Good luck!

I know that they will. I was just wondering if collectors come to expect that from everyone. Does that scenario set the bar for everyone? I do realize that we have an exception to the rule around this forum. You guys are some very educated and knowledgeable collectors. I hope that others can realize that not every maker can sell a knife at slightly more than material costs.


Thanks for your input and perspective Ken.

 

[brownshoe]

There is no intrinsic worth to a custom knife or a maker's time. Whether it is a "using" knife or not, most people (95%) think anyone who pays more than $250 for any knife is insane. Artists make art for fun, not profit, don't begrudge the part-time maker who is critical of his work and prices it low to pay for his on-the-job training. However, in my opinion, there are more delusional hobby makers trying to sell crap than true sweet deals, particularly in the straight knives section of the maker for sale subforum. There also is a host of makers who just copy others...not very well either.

When it comes to collectors, they sell for a variety of reasons. Hard luck cases will drop prices quick because they need the money. Some collectors are rich or adicted, thus losing 20-50% of the value of a knife in order to get cash for something new or please a spouse is no sweat. The reverse is true as well, they have the cash and will gladly pay 50% more for the flavor of the month.

 

[J. Doyle]

Thanks for contributing, brownshoe.

There is no intrinsic worth to a custom knife or a maker's time.

I agree to a point and know what you're saying. But some of us have been fortunate enough (at least so far) to make a legitimate living at making knives so, at least for me, my time does have value.

Whether it is a "using" knife or not, most people (95%) think anyone who pays more than $250 for any knife is insane. Artists make art for fun, not profit, don't begrudge the part-time maker who is critical of his work and prices it low to pay for his on-the-job training. However, in my opinion, there are more delusional hobby makers trying to sell crap than true sweet deals, particularly in the straight knives section of the maker for sale subforum. There also is a host of makers who just copy others...not very well either.

I agree completely.

 

[J. Doyle]

John, I approach this more from a collector's perspective, but I feel that some of the same methods can work for either the collector or maker selling knives.

Some makers have been successful working with purveyors, especially early on in their careers. A good purveyor has the ability and contacts to promote you and get your knives in front of buyers who want to and are able to purchase them. Some purveys can help find these buyers thus cultivating a market for you. Even though the purveys are going to take a percentage, it's important IMO that a knifemaker have a consistent and thought out pricing structure. I feel a maker is often better off working with a purveyor to establish a pricing structure acceptable for both maker and buyers as opposed to selling a particular model knife on a forum for a different price every time they list it.

I feel a maker needs a successful business, marketing and sales plan to be successful. Makers need to offer their knives via a good, informative, exciting and up to date website and have a mailing list of collectors who are interested in their work. Go to as many shows as possible that cater to the type knives you create. Also go outside the box to create knives that have potential to broaden your customer base.

Don't just look at a show as an opportunity to sell the knives on your table but to more an opportunity promote yourself and your knives. Network as it's all about increasing contacts and putting you and your knives 'out there'.

Kevin, I wanted to say thanks for this post. There is a TON of wisdom and value in this. I was just talking to a close friend of mine and he mentioned this post was worth printing and hanging in our shop or above our desks. I totally agree.

 

[Shaw Blades]

I'd like contribute to the discussion. My path (as a part time maker) has been me not publicizing my work, visiting knifemakers, taking notebooks full of notes, testing edge thickness, testing heat treat, breaking knives, testing glues. But I didn't document each step on the forum and take step by step pictures. Now I'm to the point where I feel comfortable selling my work and no one knows who I am. Now I've been told I need to market myself because people buy the maker more so than the product. Now I'm trying to do the website thing and maybe go to some local shows.

My pricing is based on being a frequent custom knife buyer, now a knife maker with a full time day job. I ask myself what would I have been comfortable paying for this knife? It seems lower than other full time makers for sure, but it isn't intentional. Also if someone asked me how much I would want for a hidden tang hand sanded blade last year it would have been much more than now because I know how to not spend as much time overworking things.

I also feel the custom knife user market is way different than the custom knife market. I like the user side now but I would never be naive enough to put out some Kyle Royer quality work for $150.

Great topic.

 

[mwschilling]

Interesting topic. I can only comment from a collector’s perspective and likely only apply to collector knives (non users). Like others have said, knife maker’s name has a lot to do with value, especially with collector knives. I collect knives purely as hobby/enjoyment rather than considering them an investment. I have never sold a custom knife from my collection. However, IMO it’s the secondary market (value and demand) that drives the price collectors are willing to pay. Even if a buyer never plans to sell the knife, most want to know that they could sell it for at least what they paid if circumstances change (financial needs, change in taste, or to raise funds for new knife). They would rarely pay the same price even for equal quality, fit and finish, materials from a maker with no secondary market, unless perhaps they felt the maker will eventually build that market, which is a fun form of collecting of its own; discovering the new up and coming makers.

People ask, how can you spend that much money on a knife? Easy, with a collectible knife (never or rarely going to be used), the collector is not really “spending” the money, just changing one asset (cash) for another (collectible knife), which if you’re a knife enthusiast is more enjoyable than looking at cash balance in a bank account. Even if it’s not intended as an investment (plan to increase in value) the idea that you can always get your cash back allows a collector to spend more money on a knife than if they bought a knife with no secondary market or one they plan to use (decreasing its value). Now, I'm not suggesting this is always true, as I do use some of my expensive knives knowing I would never get back what I paid. That is also part of the enjoyment of knives for me. However, expensive custom non users to expensive custom users is about 10 to 1.

I’m not sure knife makers do well to chase the secondary market price, certainly not to get out front of it. However, I think it is critical to establish demand for your knives if you want to increase price beyond materials plus time. You can’t do it with great fit and finish alone. The secondary market is what creates that demand for the knives direct from the maker. During the ABS Expo seminar, Les George made a great point about never trying to increase his prices to the secondary market. He said; that secondary market demand/value is what allows me to sell all the knives I can make a price I think is reasonable. Why would I want to diminish that? He makes tactical knives so perhaps it’s not the same market forces.

I’ll close with a recent experience I had. I saw a maker at a recent show that I have bought from in the past. He is a talented maker and had a folder that I really liked, but he raised his prices 40% from the last time I saw him less than a year ago. I looked at the knife and came back to it several times but couldn’t get past the increased price. I asked him about it and he said “the purveyors were selling his knives at this price so he wanted to get all the money he could.” I told him I understood and would have to think about it. However, when I tried to verify that secondary market price I could not find any of his knives being sold or even posted for sale at that new price. I passed on the knife. Even though I personally felt his knife was worth that, I didn’t want to be the only person willing to pay that price or risk taking a loss if I ever needed/wanted to sell it. I still regret not buying it and for perhaps offending a talented maker by passing on it because, although he didn’t make it specifically for me, he knew from past conversations it was exactly what I was looking for.

The issue for me wasn’t about the money but about the market value relative to asking price. During a prior show I bought another folder with similar materials direct from maker that cost almost four times as much but I was confident that the secondary market value was more than what I paid. Even though I never plan to sell it, I feel comfortable knowing I could if necessary. So, for me secondary market value provides a level of comfort to spend what others may see as unreasonable sums for custom knives.

 

[The Amazing Virginian]

I think probably not, I was mostly referring to trends on the exchange areas of forums.

Yeah, sorry. Not a market I generally play in. So I don't have any insight on that at all. However basic human nature suggests to me that you are probably right.

If they want the details and embellishments, they're going to pay for them. Those extras take me time to do them and my time is very valuable to me. I'm realizing that fact more and more all the time. If someone says "I want that knife but I want it for half the price", the only way to do that is start stripping away the extra details.

I think a reasonable knife collector would understand all that. Of course, not everyone is reasonable. I try to avoid doing business with unreasonable people. Just a waste of time.

I have seen a few makers take an order for a knife then have the collector say, "I want to order a knife like this. Oh, I want to add that, and do this different, and add a spacer here and some filework here." Sometimes they expect that it should be the same price as the base knife and that's wrong. And sometimes the maker has said that they'll throw that extra stuff in for the same price and that's equally as wrong.

Same comment as above. However I cannot agree with the statement I highlighted. I like personal freedom. If for whatever reasons some maker decides he is willing to let all that happen, who am I to tell him "that is wrong!"?

I don't always understand why, about the Loveless example particularly, but I do know what you mean.

The Loveless example is intrinsic to ANY kind of collectible. The heart wants what the heart wants . . . and lots of times that would be what the brain thinks that OTHER folks' hearts' want. :love_heart: LOTS of human psychology involved here. Da Vinci will always be more desirable than Da Nobody - even if 99.9999% of folks could never tell the two apart.

I was just wondering if collectors come to expect that from everyone. Does that scenario set the bar for everyone? I do realize that we have an exception to the rule around this forum. You guys are some very educated and knowledgeable collectors. I hope that others can realize that not every maker can sell a knife at slightly more than material costs.

I can't answer that. Pretty much all the knives I buy sell for a high multiple of the material costs. If they didn't . . . I probably would not find them to be worth collecting. Isn't that funny?

Thanks for your input and perspective Ken.

More than welcome. Thanks for starting a thread here that got folks participating!

There is no intrinsic worth to a custom knife or a maker's time. Whether it is a "using" knife or not, most people (95%) think anyone who pays more than $250 for any knife is insane. Artists make art for fun, not profit, don't begrudge the part-time maker who is critical of his work and prices it low to pay for his on-the-job training. However, in my opinion, there are more delusional hobby makers trying to sell crap than true sweet deals, particularly in the straight knives section of the maker for sale subforum. There also is a host of makers who just copy others...not very well either.

When it comes to collectors, they sell for a variety of reasons. Hard luck cases will drop prices quick because they need the money. Some collectors are rich or adicted, thus losing 20-50% of the value of a knife in order to get cash for something new or please a spouse is no sweat. The reverse is true as well, they have the cash and will gladly pay 50% more for the flavor of the month.

Great post. Except I think that instead of 95% it is probably closer to 99.99%. :highly_amused:

Interesting topic. I can only comment from a collector’s perspective and likely only apply to collector knives (non users). Like others have said, knife maker’s name has a lot to do with value, especially with collector knives. I collect knives purely as hobby/enjoyment rather than considering them an investment. I have never sold a custom knife from my collection. However, IMO it’s the secondary market (value and demand) that drives the price collectors are willing to pay. Even if a buyer never plans to sell the knife, most want to know that they could sell it for at least what they paid if circumstances change (financial needs, change in taste, or to raise funds for new knife). They would rarely pay the same price even for equal quality, fit and finish, materials from a maker with no secondary market, unless perhaps they felt the maker will eventually build that market, which is a fun form of collecting of its own; discovering the new up and coming makers.

People ask, how can you spend that much money on a knife? Easy, with a collectible knife (never or rarely going to be used), the collector is not really “spending” the money, just changing one asset (cash) for another (collectible knife), which if you’re a knife enthusiast is more enjoyable than looking at cash balance in a bank account. Even if it’s not intended as an investment (plan to increase in value) the idea that you can always get your cash back allows a collector to spend more money on a knife than if they bought a knife with no secondary market or one they plan to use (decreasing its value). Now, I'm not suggesting this is always true, as I do use some of my expensive knives knowing I would never get back what I paid. That is also part of the enjoyment of knives for me. However, expensive custom non users to expensive custom users is about 10 to 1.

I’m not sure knife makers do well to chase the secondary market price, certainly not to get out front of it. However, I think it is critical to establish demand for your knives if you want to increase price beyond materials plus time. You can’t do it with great fit and finish alone. The secondary market is what creates that demand for the knives direct from the maker. During the ABS Expo seminar, Les George made a great point about never trying to increase his prices to the secondary market. He said; that secondary market demand/value is what allows me to sell all the knives I can make a price I think is reasonable. Why would I want to diminish that? He makes tactical knives so perhaps it’s not the same market forces.

I’ll close with a recent experience I had. I saw a maker at a recent show that I have bought from in the past. He is a talented maker and had a folder that I really liked, but he raised his prices 40% from the last time I saw him less than a year ago. I looked at the knife and came back to it several times but couldn’t get past the increased price. I asked him about it and he said “the purveyors were selling his knives at this price so he wanted to get all the money he could.” I told him I understood and would have to think about it. However, when I tried to verify that secondary market price I could not find any of his knives being sold or even posted for sale at that new price. I passed on the knife. Even though I personally felt his knife was worth that, I didn’t want to be the only person willing to pay that price or risk taking a loss if I ever needed/wanted to sell it. I still regret not buying it and for perhaps offending a talented maker by passing on it because, although he didn’t make it specifically for me, he knew from past conversations it was exactly what I was looking for.

The issue for me wasn’t about the money but about the market value relative to asking price. During a prior show I bought another folder with similar materials direct from maker that cost almost four times as much but I was confident that the secondary market value was more than what I paid. Even though I never plan to sell it, I feel comfortable knowing I could if necessary. So, for me secondary market value provides a level of comfort to spend what others may see as unreasonable sums for custom knives.

Another great post. I found myself shaking my head in agreement with a lot of this.

 

[Kevin Jones]

Interesting topic. I can only comment from a collector’s perspective and likely only apply to collector knives (non users). Like others have said, knife maker’s name has a lot to do with value, especially with collector knives. I collect knives purely as hobby/enjoyment rather than considering them an investment. I have never sold a custom knife from my collection. However, IMO it’s the secondary market (value and demand) that drives the price collectors are willing to pay. Even if a buyer never plans to sell the knife, most want to know that they could sell it for at least what they paid if circumstances change (financial needs, change in taste, or to raise funds for new knife). They would rarely pay the same price even for equal quality, fit and finish, materials from a maker with no secondary market, unless perhaps they felt the maker will eventually build that market, which is a fun form of collecting of its own; discovering the new up and coming makers.

People ask, how can you spend that much money on a knife? Easy, with a collectible knife (never or rarely going to be used), the collector is not really “spending” the money, just changing one asset (cash) for another (collectible knife), which if you’re a knife enthusiast is more enjoyable than looking at cash balance in a bank account. Even if it’s not intended as an investment (plan to increase in value) the idea that you can always get your cash back allows a collector to spend more money on a knife than if they bought a knife with no secondary market or one they plan to use (decreasing its value).
Now, I'm not suggesting this is always true, as I do use some of my expensive knives knowing I would never get back what I paid. That is also part of the enjoyment of knives for me. However, expensive custom non users to expensive custom users is about 10 to 1.

I’m not sure knife makers do well to chase the secondary market price, certainly not to get out front of it. However, I think it is critical to establish demand for your knives if you want to increase price beyond materials plus time. You can’t do it with great fit and finish alone. The secondary market is what creates that demand for the knives direct from the maker. During the ABS Expo seminar, Les George made a great point about never trying to increase his prices to the secondary market. He said; that secondary market demand/value is what allows me to sell all the knives I can make a price I think is reasonable. Why would I want to diminish that? He makes tactical knives so perhaps it’s not the same market forces.

I’ll close with a recent experience I had. I saw a maker at a recent show that I have bought from in the past. He is a talented maker and had a folder that I really liked, but he raised his prices 40% from the last time I saw him less than a year ago. I looked at the knife and came back to it several times but couldn’t get past the increased price. I asked him about it and he said “the purveyors were selling his knives at this price so he wanted to get all the money he could.” I told him I understood and would have to think about it. However, when I tried to verify that secondary market price I could not find any of his knives being sold or even posted for sale at that new price. I passed on the knife. Even though I personally felt his knife was worth that, I didn’t want to be the only person willing to pay that price or risk taking a loss if I ever needed/wanted to sell it. I still regret not buying it and for perhaps offending a talented maker by passing on it because, although he didn’t make it specifically for me, he knew from past conversations it was exactly what I was looking for.

The issue for me wasn’t about the money but about the market value relative to asking price. During a prior show I bought another folder with similar materials direct from maker that cost almost four times as much but I was confident that the secondary market value was more than what I paid. Even though I never plan to sell it, I feel comfortable knowing I could if necessary. So, for me secondary market value provides a level of comfort to spend what others may see as unreasonable sums for custom knives.

Good post. I especially agree with the bolded section. That's one of the great things about collecting custom knives. Being that I display all my knives, after a few years I sometimes grow tired of looking at one so I sell it to another collector and replace it with something new. Everyone wins, I generally make about 20% on the sale, get a new knife and the buying collector gets a great knife that's new to him/her that will most likely show them a profit if they choose to sell it in a few years. Like Mark said, it's more like trading one asset for another than spending money. Good thread John. :thumbup:

 

[J. Doyle]

There are some really good posts and insights into how this all works. It's great for me (and other makers I'm sure) to get some perspective from some serious collectors.

Thanks for all the replies guys.

 

[Ben Seward]

"Standing out making one of mans earliest and favorite tools is certainly a difficult endeavor"

I completely agree with Joe P's statement. This IMO is one of the greatest challenges of a new maker. As one successful maker told me, it's root, hog or die in this market. From what I've seen in my relatively short time in the market, there are a lot of good makers out there for folks to buy from. You have to give them a reason to buy from you...innovation, execution, performance, value, etc. You have to deliver a product that people want more than your competition's. If the demand is on the increase I believe the price will follow. I personally tend to let the pricing trail a bit behind the demand. I'm still able to deliver my clients value, while making a fair profit. I think the market is usually fair in which makers it supports. Great discussion and some real wisdom from some experienced players...unlike me

 

[PoetSnipe]

Interesting topic. I can only comment from a collector’s perspective and likely only apply to collector knives (non users). Like others have said, knife maker’s name has a lot to do with value, especially with collector knives. I collect knives purely as hobby/enjoyment rather than considering them an investment. I have never sold a custom knife from my collection. However, IMO it’s the secondary market (value and demand) that drives the price collectors are willing to pay. Even if a buyer never plans to sell the knife, most want to know that they could sell it for at least what they paid if circumstances change (financial needs, change in taste, or to raise funds for new knife). They would rarely pay the same price even for equal quality, fit and finish, materials from a maker with no secondary market, unless perhaps they felt the maker will eventually build that market, which is a fun form of collecting of its own; discovering the new up and coming makers.

People ask, how can you spend that much money on a knife? Easy, with a collectible knife (never or rarely going to be used), the collector is not really “spending” the money, just changing one asset (cash) for another (collectible knife), which if you’re a knife enthusiast is more enjoyable than looking at cash balance in a bank account. Even if it’s not intended as an investment (plan to increase in value) the idea that you can always get your cash back allows a collector to spend more money on a knife than if they bought a knife with no secondary market or one they plan to use (decreasing its value). Now, I'm not suggesting this is always true, as I do use some of my expensive knives knowing I would never get back what I paid. That is also part of the enjoyment of knives for me. However, expensive custom non users to expensive custom users is about 10 to 1.

I’m not sure knife makers do well to chase the secondary market price, certainly not to get out front of it. However, I think it is critical to establish demand for your knives if you want to increase price beyond materials plus time. You can’t do it with great fit and finish alone. The secondary market is what creates that demand for the knives direct from the maker. During the ABS Expo seminar, Les George made a great point about never trying to increase his prices to the secondary market. He said; that secondary market demand/value is what allows me to sell all the knives I can make a price I think is reasonable. Why would I want to diminish that? He makes tactical knives so perhaps it’s not the same market forces.

I’ll close with a recent experience I had. I saw a maker at a recent show that I have bought from in the past. He is a talented maker and had a folder that I really liked, but he raised his prices 40% from the last time I saw him less than a year ago. I looked at the knife and came back to it several times but couldn’t get past the increased price. I asked him about it and he said “the purveyors were selling his knives at this price so he wanted to get all the money he could.” I told him I understood and would have to think about it. However, when I tried to verify that secondary market price I could not find any of his knives being sold or even posted for sale at that new price. I passed on the knife. Even though I personally felt his knife was worth that, I didn’t want to be the only person willing to pay that price or risk taking a loss if I ever needed/wanted to sell it. I still regret not buying it and for perhaps offending a talented maker by passing on it because, although he didn’t make it specifically for me, he knew from past conversations it was exactly what I was looking for.

The issue for me wasn’t about the money but about the market value relative to asking price. During a prior show I bought another folder with similar materials direct from maker that cost almost four times as much but I was confident that the secondary market value was more than what I paid. Even though I never plan to sell it, I feel comfortable knowing I could if necessary. So, for me secondary market value provides a level of comfort to spend what others may see as unreasonable sums for custom knives.

This was one of the best posts for a long time. "[...] the collector is not really “spending” the money, just changing one asset (cash) for another (collectible knife) [...] Even though I never plan to sell it, I feel comfortable knowing I could if necessary [...]" Nothing to add!