Pricing Ethics

Chris Crawford · Dec 10, 2005

Here is the situation: I've been making folders for about 5 years now, and about once a year I raise the prices of my knives. After having an article about one of my knives published in Blade I've picked up many more orders than I had ever expected. I'm just a part time knifemaker, and this created close to a two year backlog.

The article listed my knife at $195 which is fine for now. However, I would like to raise the price. I plan on honoring all of my current orders, but even if I raised the price today it would be two years before I would see the change. This is fine with me by the way. So I guess my real question is when is the time to change the price? If someone calls me up to order a knife and tells me that they saw it in Blade listed for $195, and I tell them that the price has gone up to $225 or something, how will that make me look as a knifemaker. Keep in mind that it would likely be 2008 before I would see the price change, and by then I would probably want to raise the price to about $250.

Most of the local knifemakers that I know say that I'm not asking enough for my knives in the first place, which brings up another question. I know that the value of a knife is subjective, but how do you determine a fair price for a good quality handmade slipjoint with a detailed fit and finish?

If anyone has some wisdom that they can share with me, please do.

Thanks -chris

__________________
Chris Crawford Knives

RDT · Dec 10, 2005

Chris, ya gotta do what ya gotta do. I think if you explain that the article was done before the price change and that basically it's really expensive to make custom knives, most customers would be fine. $195. - $225. isn't that big of a jump either, anyone who wants a quality knife made by you will be willing. It's just a fact that at some point with the cost of materials, living expenses, over head in general that we must raise our prices. Good luck, :thumbup:

Rob! · Dec 10, 2005

Your price point is your primary control of supply and demand. If you can't turn out enough quality knives to meet the demand then you have to reduce the demand. That can be done by refusing orders altogether - or by upping the price to a point that reduces the demand. Do you think your customers would rather be told the price has increased - or your knife is not available to them at any price?

Remember, it doesn't matter what you think your knife is worth - or for matter what other makers think it's worth. The real issue is what it's worth to your customer.

The other thing I'd suggest, is to make the jump worthwhile. You don't want to be making price increases every few months. When you do, set it to last a few years.

The other thing you may try is a design or material change - which coincides with the new pricing structure. Your answer to those who saw the blade article is that the knife shown has been redesigned / improved.

Nice problem

Rob!

Tom Buchanan · Dec 10, 2005

Ya know,Chris,in two years the cost of materials is going to be higher too.could eat into the profit that way.i'm no Donald Trump,but i know things ain't gonna get no cheaper!....Tom

Kit Carson · Dec 10, 2005

Chris,
Just be comfortable with the price you charge. Your customers will be too, whether buying from you or on the secondary market.

rlinger · Dec 10, 2005

I would say don't concern yourself except that what has already been agreed upon must stand for orders already in place. Other than that the price published in the mag was the price at the time it hit the stands. Not guaranteed for tomorrow or next month. I take orders and the price at that time for THAT order is the price, regardless. I got to look ahead as best as possible. You are, as you said, not full time. When you go full time things will change. Go full time you won't make knives just because you want to. You'll make'em because you got to. Its different then. My guess is; for your folders - kick'em up another hundred bucks (minimum). With your back log I'd do it starting right now. With a two year back log 25 bucks more for a knife such as yours - to be made 2+ years from now - that'll kill ya. You gotta keep the electric on to be able to grind blades. Much of what I said above is based on my turning full time a bit more than a year ago. When I had the day job I didn't care. Knife making was lazy and laid back. If one took six weeks so what; and I made them only one at a time. Now, the same knife I was making for $400 I would loose my utilties if that all I charge for it today. They, the utilities, would be turned off and I would be on the street making no blades at all - unless under bridge and over a camp fire. Its fun and I love knife making but gratification does not buy many loaves of bread. Don't price yourself into dreading doing it. You make a hell of a folding knife and I am one of the lucky ones to have gotten your video, although I did give it away to an aspiring folder maker.

RL

rhrocker · Dec 11, 2005

Just announce on your web site that one Jan 01, 07, There will be a price increase across the board of $XXX.

Protactical · Dec 11, 2005

I agree with all the good advice.

It depends what the $195 in the article meant. If it is the price of the knife pictured at the time you had it back when the photos were taken, before you got the boost in sales, that is one thing. If it was given as the price "to get one just like it", and you agreed about that, that is another. I'm not saying you are bound either way, but you aren't bound at all in the first case.

MCoughlin · Dec 11, 2005

Hey man,
$195 for a custom folder. Is it even legal to rip yourself off that much??

2 years backlog? You're charging to little in my opinion. I don't know how much time you put into them but your price sure seems low to me. Also keep in mind selling high quality knives at a low price makes all the rest of us look bad! LOL. Just kidding.
Mike

Chris Crawford said:
Here is the situation: I've been making folders for about 5 years now, and about once a year I raise the prices of my knives. After having an article about one of my knives published in Blade I've picked up many more orders than I had ever expected. I'm just a part time knifemaker, and this created close to a two year backlog.

The article listed my knife at $195 which is fine for now. However, I would like to raise the price. I plan on honoring all of my current orders, but even if I raised the price today it would be two years before I would see the change. This is fine with me by the way. So I guess my real question is when is the time to change the price? If someone calls me up to order a knife and tells me that they saw it in Blade listed for $195, and I tell them that the price has gone up to $225 or something, how will that make me look as a knifemaker. Keep in mind that it would likely be 2008 before I would see the price change, and by then I would probably want to raise the price to about $250.

Most of the local knifemakers that I know say that I'm not asking enough for my knives in the first place, which brings up another question. I know that the value of a knife is subjective, but how do you determine a fair price for a good quality handmade slipjoint with a detailed fit and finish?

If anyone has some wisdom that they can share with me, please do.

Thanks -chris

__________________
Chris Crawford Knives

Bigjohn · Dec 11, 2005

Chris, Rob said it the best.....Honor the orders youve taken on, all others have to accept the increase. As already said..make the increase right.....so it will be worth while for a lenght of time you can live with....good luck

jhiggins · Dec 11, 2005

I only charge $375 for my standard Passmore liner-lock folder with ATS-34 or 154CM blade. Thats my standard price with wood or micarta scales. If the customer wants anything fancy the price goes up accordingly.

My wife also keeps a database of every customer. I ask all the particulars about them and how they will carry the knife or display it. I'll shoot them an email when I am working on their order just to prepare them for mustering up the payment when the knife is complete. The end result is top-notch customer service.

The final feelings here is that you need to charge what you need to charge to:

1) satisfy your materials and labor costs
2) keep you enthused enough to continue making the knives
3) keep your customers enthused enough to continue appreciation for your product.

If you want my straightforward honesty, Chris, I think $195 for a small slipjoint like yours is a fair price. There is nothing hi-tech, no rare or expensive materials, and no fancy embellishments. I think $195 for a custom single-blade, nickle sliver and jigged-bone slipjoint is a good pricing point.

I'm happy to hear you have a very long backlog now. Grats! Going to go fulltime, now I suppose?

NorthStarXO · Dec 11, 2005

We had a price increase recently after 4 years at the same price. The price of steel had gone up 210% in the past 18 months. Customers understand that - so far, no one has balked.

NickWheeler · Dec 11, 2005

Pricing work is one of THE HARDEST parts of this for me. Then to try and foresee pricing on future work... even HARDER!!!

I am about 2 years out on my orders. The last few I took, I told the people a price range... it will depend on several variables... materials cost, my living situation, and if I've gotten my Js stamp.

Some people want to lock you in on a price with NO room for error. I'd recommend you thank them for their interest and move on. There are far too many great guys that understand this is a craft that requires all sorts of blood, sweat, and tears... and it's not so cut and dried to say, "This knife is $XXX today and for the next 5 years."

samwereb · Dec 11, 2005

If you advertise your knife for $195, then you are obligated to honor that price. If you someone else writes that your knife costs $195, it isn't a price quote. Just keep giving people good price quotes when they call to order. Congratulations on a full order book.

Dan Gray · Dec 11, 2005

Chris
2 more cent here
You can always discontinue that model and
honor the orders you have now..and bite the bullet you shot your self with.

..

but no one in their right mind would believe the price in an older book.
you should though think ahead, for at least inflation..

The way to doing business is to go up on price when you have to much business and go down when you need business.

a good business man knows the fine line to tip toe on..

I'm not saying that's me..

Dan Gray · Dec 11, 2005

NickWheeler said:
Pricing work is one of THE HARDEST parts of this for me. Then to try and foresee pricing on future work... even HARDER!!!

I am about 2 years out on my orders. The last few I took, I told the people a price range... it will depend on several variables... materials cost, my living situation, and if I've gotten my Js stamp.

Some people want to lock you in on a price with NO room for error. I'd recommend you thank them for their interest and move on. There are far too many great guys that understand this is a craft that requires all sorts of blood, sweat, and tears... and it's not so cut and dried to say, "This knife is $XXX today and for the next 5 years."

OK let see if I can make you mad at me ..but not meaning too mind you..

I don't like to disagree but I do about the advertised price you mention.
that's like saying, hey I found a price you advertised 20 years ago and now guess what, I'm holding you to it.
it just don't make sense, Coke and Micky'ds still show old advertisements
for nostalgia ..
but you are not ever again getting a burger for .25 and a coke for .05 from them because of those old adds.,, right?

and I don't agree that you should go up on price just based on a JS stamp some buyers don't give a hoot about a stamp
I know of only one sale I lost because I don't have a stamp..to bad he felt that way, I think he lost out on a great knife..
stamp are not a guaranty it will be done right.
word of mouth will stomp a stamp in the ground if you compare the two...
you can go up because of a stamp if you want but it can be a double edged sword too, it's not a fix all.
doing business in a business fashion and knowing your market is key..but still it's just my 2 cent..
that stamp is advertisement and advertisement is just that advertising..I'm not saying it won't help..just not a fix all.

and please Guys don't turn a sale away just because the guy wants to know just exactly what he's going to pay, there is a lot of them out there and I don't blame them..
I don't like an open ended check book either when I buy..

if he wants to be that way, add an amount to the job to cover yourself that you feel comfortable with and tell him it won't run over that price but could be less..if it does go over of unforeseen circumstances you will be untitled back any moneys paid..this will give you both a way out..he just wants a fair deal and a way out if needed..

I sure would like to talk about this stuff face to face, I just can't convey business by typing it..again my 2 cents

NickWheeler · Dec 11, 2005

So what is it exactly that you are disagreeing with me about?

I never said you should hold yourself to old prices, in fact, I said the opposite.

And it's fine if you don't want to agree about the stamp. Getting a stamp is all about MY progression as a bladesmith. It means I've climbed further up the ladder. Sure, there are plenty of guys with a high school education that are everybit as smart as a guy with a Masters or PHD. But the fact that you worked to gain that level of education is just proof of your dedication to what you do.

It seems that you somehow took what I said as saying that people without a stamp are beneath those who do get them. Which would be adding all sorts of things between the lines.

fitzo · Dec 11, 2005

NickWheeler said:
But the fact that you worked to gain that level of education is just proof of your dedication to what you do.

Awwww, Nick, now I gotta go clean my shoes...... :jerkit:

(That's a comment regarding the degrees, not stamps, BTW!!)

Dan Gray · Dec 11, 2005

OK lets see if I can screw up some more..

So what is it exactly that you are disagreeing with me about?

it's fine if you don't want to agree about the stamp

well you answered your first question..

I got my foot in my typing again I see,,:foot:

It seems that you somehow took what I said as saying that people without a stamp are beneath those who do get them.

no I meant just what I said, word of mouth is better IMHO and you took it just the way you wanted to..
that was not meant just for you in an insidious way to attack you, it's an opinion to your post. there will be others reading this for some time to come, it's a debate of a sort, don't take things so personal Nick, it's not meant that way..

I never said you should hold yourself to old prices, in fact, I said the opposite.

that was a reply to what Samwereb said..
I didn't get the quote in there.

My humble apologies master Nick..
and that is meant as, master as in young fella...so there no reading between the lines..my wife is 18 hours into her masters for education and it's getting to talk to her too..I think they brain wash students..but That's MHO

samwereb said:
If you advertise your knife for $195, then you are obligated to honor that price. .

got your attention though, just like I said I would..

education?
I guess if no one beeps your horn you have to do it yourself..now theres some reading between the lines..to what I mean,,

hey if I wasn't putting a wife and two kids through collage maybe I could
show proof of my dedication too in education, naw.. I've proved my dedication to them it's all I need for myself, I humble myself for them to be better educated than I, I'm as happy as a clam for my accomplishments...proclaiming nothing more than that..

rugerno1b · Dec 12, 2005

Chris - I manage and am part owner in a Construction Company, Landscape Company, and several other concerns. We receive price increases almost daily, and adjust are pricing accordingly. If we sold our product at cost or below are targeted margins, we wouldn't be in business very long. You should not feel any guilt from pricing your product accordingly. Ie: what the market will bear. Too high and you have no customers, too low and you can't keep up with the demand and/or your business succeeds itself right out of business. Concentrate on what your profit goals are, and how much the consumer is willing to pay for your product. There should be no emotion of guilt due to your pricing structure. (Only pride!) A few questions for you, what do you do when your suppliers notify you of a price increase or fuel surcharge. You either keep on buying, or you look for another supplier with an equal quality. Most of the time, I would wager that if the increase is reasonable you will continue to use the same supplier due to your relationship & history. Your customers should react in the same way. If not, then the market is telling you that $195 is all it will bear, and you have some decisions to make. Anyway, my advise, for what it is worth, decide on your pricing structure, now, and then make the calls to your backlog of customers. See what the reaction is to an increase. You don't have to drive them away, but my gut tells me that if someone is willing to wait for 2 years to get a knife, they probably aren't even going to blink an eye at an reasonable increase. Do yourself & your product justice, and do what you need to make yourself successful in your business as well as your product. Think about 20 years from now and these customers of yours are posting your custom knives for 10 times what they paid you for them. Good luck, whatever you decide.