This is an excellent question and it is important to take the right apporach from the beginning.
It is very difficult to make a "profit" at this, (and very often not the goal.) You should, however, plan to recover your costs along the way, through positive cash flow to fund additional investments and the purchase of your supplies. Under no circumstances should you take a loss on any single knife.
That was the easiest part of pricing your product. What is far more difficult is pricing your time and labor. How much time are you spending per knife? How much is that time worth to you, otherwise, e.g. would you instead spend it reading a book, or enjoying that time with your family, or working on another busniess venture? Certainly your time/labor is worth a minimum of $20.00 per hour. It is very likely that you should charge much more.
The last consideration is the quality of your workmanship. You will have to value that yourself, with the input from your existing and prospective customers. Fortunately, that valuation can be adjusted as you get better at knifemaking.
Always keep in mind that is it infinitely more difficult to raise your prices to the market than it is to lower them. It is not a mistake to charge too much. You can lower the prices later, if you must. Your opinion of the knife is the "real" value. The customer's opinion is the "perceived" value. The perceived value is the most important to know.
I know a good example: There is a highly skilled winemaker in Napa Valley making ultra-premium wines. He makes truly excellent wine. Because he was able to innovate, he has lower costs than his competitors. Mindful of his lower costs, he went to market at a discount from all of his ultra-premium wine competitors. To his great suprise, he could not sell much of his wine, because he had priced it too low. The customers' perception was that his wines could not command the same price as the other ultra-premium wines because they weren't as good. The customers stayed away from the wine - in droves. Once he raised his prices to the same level of his competitors, he affected the "perceived value," sold it all, got the attention of the marketplace and won several winemaking awards, all of which served to sell more wine at a good profit, and allow him to grow. Nothing about the wine changed, except the price.
I said at the beginning that it is very often not the goal to make money knifemaking. This type of endeavor is most often a "labor of love," and many makers simply don't give a damn whether they make money or not. They aren't in it to make money, primarily. They are compensated in many other ways. The irony is that those who are not in it for the money, primarily, seem to make the most money - - and the "best" knives. The ultimate objective is to have each party walk away from the transaction thinking he got the better end of the deal.
I hope this helps. Keep trying and don't give up. If you love it, you'll make some money.
[This message has been edited by samwereb (edited 08-19-2000).]
[This message has been edited by samwereb (edited 08-19-2000).]
[This message has been edited by samwereb (edited 08-19-2000).]
[This message has been edited by samwereb (edited 08-19-2000).]
[This message has been edited by samwereb (edited 08-19-2000).]
[This message has been edited by samwereb (edited 08-19-2000).]
[This message has been edited by samwereb (edited 08-19-2000).]
[This message has been edited by samwereb (edited 08-19-2000).]
