Price structure

[Jason Fry]

I'm relatively new to the knife game, both buying and making/selling. I've looked at every knife in the knives for sale forum for probably three months. I've made some pretty good blades and some not so pretty blades, and sold a few. As I think about buying and selling knives, and making knives for sale, here's the question I'd like to pose to this group of collectors and makers. How do you determine the price of a knife? Can you lay out criteria for various price ranges?

Maybe something like this:
Under 100- serious fit finish issues (pins off center, cracks in handle material, obvious scratches on blade), or simple materials and construction (stock removal blades with single material pinned handles), or small knives. Often machine or forge finish on blade.

100-150- minor fit/finish issues, simple construction with upgraded materials, or mid level construction (guard or bolsters).

I haven't looked at many knives above that price range, and I may be off on the criteria I've offered.

Are there any objective guidlelines to determine what a fair price is for a given knife? Is the "internet price" different from the "gun/knife show" price?

 

[Ed Caffrey]

My thought pattern where this type of thing is concerned is that if the knife isn't the very best I can do, it simply is not offered for sale....no matter the price. Its all about your reputation as a knifemaker. That reputation is something that can take many years to build, and if you allow ONE sub-standard piece out the door, at any price, you can wreck it. My belief is that as individual craftsmen, our reputation is everything, and should be guarded jealously.

Knives that have the errors you mentioned are best considered as "experience" pieces, and should never see the light of day. Of course in the beginning, your going to make many mistakes/errors. In my early days, when I created a knife, those type of mistakes were common, and most of those pieces were given away to family or friends. In hindsight, and knowing what I know now, I wish I had never even let those knives out of the shop, and in fact have managed to reacquire a number of them.

The only person you have to compete with is yourself. If, at the end of the day you can look at the man in the mirror and say.... "I did the very best I could today" (on that knife), and be totally honest with yourself, then nobody else has anything to say about it. The problem arises when an individual maker starts letting things go, and thinking "Its good enough." or "I won't charge as much for that knife." If that occurs, your heading down the road of self-destruction.

Only your very best should leave the shop, no matter if its a $100 piece, or a $10,000+ piece. Your future reputation and success as a knifemaker depends on it.

I've had several students who began their careers as makers who would produce 200-300 knives a year, but were selling them for $60-$90 each. My thought is.... do you want to produce 200-300 $60 knives a year, or do you want to produce 60-90, $200-$300 knives per year? With just that change in their thought pattern, several of them have gone from producing/selling $60 knives, to selling the same basic knife for $125-$150...and all it took was an extra hour or two per knife.

 

[Jason Fry]

"several of them have gone from producing/selling $60 knives, to selling the same basic knife for $125-$150...and all it took was an extra hour or two per knife."

That's wisdom right there....

Specifically though, what's the difference between the two? What do you do in that extra hour that makes the knife that much better?

I've got some that won't leave the fold, and the ones I've sold have been the best I can do. I had to make quite a few before I made one worth selling. I'd rather sell $150 dollar knives than $60 dollar ones, but I'd like to be able to explain why this one's 150 compared to that one that's 60.

 

[Lorien]

I'm no knifemaker, but I run my own business, and I have some thoughts for you.

-keep track of your hours, and separate design work, prototyping and research from actual knife building, and keep that just for your own info. Give yourself a rough idea of what you need to make per hour, and decide on an honest hourly rate. If only for your own purposes. Lots of makers probably don't charge out for actual hours spent, but it's good for you to know.

-keep track of your shop expenses. Try and figure out how much you spend yearly on tools, rent/mortgage, supplies, promotion and make sure you write off as much as you can against your income.

-keep track of the actual material cost per knife, and decide on a margin. 20-50% is probably pretty standard. Once you start getting materials in bulk and save money, your margin should increase.

-as your skills allow you to make knives faster, the margin on you hourly rate should also increase.

Good business depends on it making a profit. Give your business 3-5 years of breaking even and reinvest as much as you can into your business, while paying yourself a portion out of that. If you go tits up, you won't be doing anyone any favours, least of all yourself.

One great business tip that I got from someone much smarter than me, which I've been learning the meaning of over the past five years, is "pay yourself first". Great advice, even before you figure out what it really means.

I hope this helps a bit.

 

[tom mayo]

I agree with Ed, you must strive for the utmost of your ability on every knife you make........if they dont come out right........you have a nice gift for a friend or relative, or for the box of junk under your bench!!!!

I have seen a lot of guys make really nice knives right from the get go........however......

Bob Loveless always said youve got to make 200 knives before you have any idea what you are doing.......

In the surfboard industry, I always felt like a shaper had to go thru at least 1000 blanks before I started liking his shapes.

 

[Ed Caffrey]

The $150 knife versus the $60 knife has everything to do with fit, finish, and overall flow/design.
Nothing, I repeat NOTHING, will give a knife more intrinsic value than hand finishing time....meaning taking the time to ensure all the fits, all the finishes, and everything about the knife is pleasing to the eye, and the best it can be. Literally, the difference between a $60 knife, and a $150 knife is that 1 hour+ extra that you spend in making sure everything is just right with it.

Lorien makes excellent points for the business aspect, but be warned...do not confuse the business aspect with the knifemaking aspect. I have seen far too many makers, who could become fantastic, but they were "hour counters", always worried that they had to get a knife done within a specific number of hours, rather than taking the necessary time to ensuring it was the best it can be. Most makers who have been around for a while will tell you that they do not keep track of hours.....only quality. For me personally, it doesn't matter how long it takes, as long as its right. Does it bite me sometimes? Yes. But, I would rather make a little less per hour and keep on making knives, than stop on a knife when it's time limit is reached, and offer a product that is less than it could be.....doing so will ensure your career as a knifemaker is a short one.

 

[Keith Montgomery]

As a buyer, if I am looking for a less expensive knife, I will look at lower cost materials and not as fine a finish on the blade. Accepting poorer fit and finish, or major flaws, is not something I am willing to do.

 

[swilliamf]

As a buyer, if I am looking for a less expensive knife, I will look at lower cost materials and not as fine a finish on the blade. Accepting poorer fit and finish, or major flaws, is not something I am willing to do.

Agreed 100% i do not mind lower cost materials or a less fine finish but i will NOT buy a poorly fitted knife

 

[Michael Lovett]

I agree with Ed, you must strive for the utmost of your ability on every knife you make........if they don't come out right........you have a nice gift for a friend or relative, or for the box of junk under your bench!!!!

I have seen a lot of guys make really nice knives right from the get go........however......

Bob Loveless always said you've got to make 200 knives before you have any idea what you are doing.......

In the surfboard industry, I always felt like a shaper had to go through at least 1000 blanks before I started liking his shapes.

At least 200!!! Do your best work, sell nothing else. Give away what doesn't come up to your standards. And DO NOT MARK the knives that are not up to your standards .Even when given a way!! I don't care how much your friends beg!

Once again, Tom is right on the money!!!

 

[DWinkler]

I saw Jerry Fisk tie a completely finished, Damascus, Ivory handled folder to the end of an arrow and shoot it into a lake last Saturday because it did not come up to his usual standards.

Learn to do time studies and material costs then price your knives based on really knowing what you have invested. I have some forms I use if that would be any help.

Daniel