Pricing questions...

[AVigil]

Aaron,

If it takes about 10 hours to make the knife you described you might want to look at finding more efficient methods to cut down that time.

Also give the customer a price for the knife without a sheath that give them a chance to think about what it would cost for them to make a sheath or buy one.

With the knife you described without a hand sanded finish I bet you could get down to 6 hours or less of hands on time.


Also things like cerakote do raise the $$$.

 

[aarongough]

Aaron, I will give you some knifemaking business and knifemaking hobby advice combined.

Overhead only applies to running a business. In a hobby, it is the cost of having fun. Few...very few....knifemakers make knives as a true business. Most like to make knives, and selling them allows them to buy more tools and materials. You can't expect the customer to support your hobby any more than you can expect your employer to give you a raise because you bought an bigger house and a luxury car. Those expenses are your responsibilities, not his.
Materials are very low on most knives. Tools are expensive. You can charge for the materials, and add supplies like belts to the cost when pricing a knife as a hobby maker, but your time and the amount of tools and overhead sadly can't be compensated fully.
Most knives have less than $10 in the steel and about $10-30 in the handle. Add a few supplies like rivets, a couple belts, and some Kydex, and the whole knife cost is probably $50-70. You should expect to get double that for selling it..... If you make a very nice knife, triple. That is all the payment you will get for your time. Profit, just like overhead, is not really an issue for the hobby maker.

As to getting paid for the time you put into a knife as a hobby maker, it ain't gonna happen. I often use the example of a sword I made. It was a nice 16" damascus wakizashi with a lacquered saya, and I priced it at $800. Someone said that was a lot of money, and I said if I only considered the time to make the sword, and gave the steel and saya to them for free, it was selling for about $3 per hour.


The knife you describe would sell for as low as $100 from some makers, and as high as $300 from a known maker with many years of experience.
I think about $200 would be the max for your level ( from what I have seen and read).

Make knives for fun and don't make a business out of them...and you will enjoy knifemaking much longer. The quickest way to end the joy for 99% of knifemakers is to make it a business.
Budget your expenses just as you would for any hobby or pastime. Buy what you can afford, and don't overspend. Consider what you get back from sales as free money, not profit, or income.

Hey Stacy!
The main thing is that I'd actually quite like to make knives full-time, so to an extent I need to think about this from a business perspective.

I've found with other things I've done in the past that if I approach it purely as a hobby, and I get to do whatever I want then my output and quality overall drop simply because I'm not being challenged. I agree with you that there's a risk of it becoming 'just a job', but it's that's a chance I'm going to have to take I think. I really am passionate about making great user knives, and that's no insubstantial challenge! So hopefully there's enough there to keep me busy for years to come.

 

[james terrio]

The main thing is that I'd actually quite like to make knives full-time, so to an extent I need to think about this from a business perspective.

It's a long way to the top if you wanna rock'n'roll. My mortgage is paid by doing custom work - often because I'm willing to make stuff no sane maker would touch. I'm lucky enough to have a core client base that continues to re-order customs from me because they like what I'm doing, and they're confident that my "brand value" will increase. That rep has taken several years to develop.

When I figure out how to do it more efficiently with my own designs, I will be sure to share the "secret".

$300 is pretty dang high for what I consider to be a very basic EDC/hunter/utility knife in a plastic sheath.

At that price-point for a 4" monosteel stock-removal blade wrapped in Kydex (or even a damascus forged one wearing leather pants), you better have a serious "name recognition" factor going on, which means most people are going to buy your stuff to put away for a rainy day, not necessarily use it. I don't know who the heck you are, and no one else probably does either (no offense meant, the same goes for me).

Pro or hobbyist, we are not paid an hourly wage. Put that idea straight out of your head. We would all be much better off working in a machine shop or supervising a factory floor, if that's a main concern.

On the other hand, there are factory knives that size/style (Survive!, BRKT, Busse, etc) selling for $200+ and they can hardly make enough of them to keep up with demand. Marketing and "buzz" is hugely important.

Also, pricing too low makes you look unconfident and may make people wonder if there's something wrong. I've been very guilty of that.

Confused yet? Me, too.

The only "rule" I know of for sure was said by Tracy Mickley (a guy who knows a thing or two about selling stuff for a living)... "If it sells immediately, it's priced too low. If it doesn't sell at all, it's priced too high."

 

[aarongough]

You may consider having blanks waterjet cut and sending out for heat treat, I find that the cost for these two steps is less than what I want to make per hours so I can produce more blades at a lower cost but keep quality up.

Definitely a good point! I really enjoy the heat-treatment step so that's something I'd like to keep in house. Water-jet cutting the profiles is something I've been thinking about for a while and probably warrants a second look.

Ask whatever you want for it, but for a stock removal knife that looks like a factory piece I wouldn't expect to sell a lot of them for over $100. I looked at your website, and yes, the grind is clean, it looks like all the parts fit together well, but it looks like it came straight out of a factory anywhere in the world. There is nothing other than your marketing claims to distinguish it from any of hundreds of knives in sporting goods stores on Main Street of any decent sized town. when you have an established name and reputation, and an order backlog you can sell for big money, but there is a lot of work before you get there. I am sure that a guy like Nick Wheeler could sell a basic knife like that for $300 as soon as he made it because he is known for making some really nice knives, for an unknown maker, not so much.

Good luck,
-Page

Hey Page,
To be clear I haven't had any issue selling knives at my current prices. In fact I've had to close my order list because things were getting out of hand.

I think part of the reason everyone's ideas of reasonable pricing is different is because we all live in geographically diverse areas, with different costs for rent and other basic expenses. For $100 for that knife I wouldn't even be covering my base costs...

Perhaps one of the things I look at if I'm ever to go full-time is to move to a different area where the cost of living is much lower than where I am now.

-Aaron

 

[aarongough]

It's a long way to the top if you wanna rock'n'roll. My mortgage is paid by doing custom work - often because I'm willing to make stuff no sane maker would touch. I'm lucky enough to have a core client base that continues to re-order customs from me because they like what I'm doing, and they're confident that my "brand value" will increase. That rep has taken several years to develop.

When I figure out how to do it more efficiently with my own designs, I will be sure to share the "secret".

$300 is pretty dang high for what I consider to be a very basic EDC/hunter/utility knife in a plastic sheath.

At that price-point for a 4" monosteel stock-removal blade (or even a damascus forged one), you better have a serious "name recognition" factor going on, which means most people are going to buy your stuff to put away for a rainy day, not necessarily use it. I don't know who the heck you are, and no one else probably does either (no offense meant, the same goes for me).

Pro or hobbyist, we are not paid an hourly wage. Put that idea straight out of your head. We would all be much better off working in a machine shop or supervising a factory floor, if that's a main concern.

On the other hand, there are factory knives that size/style (Survive!, BRKT, Busse, etc) selling for $200+ and they can hardly make enough of them to keep up with demand.

Also, pricing too low makes you look unconfident and may make people wonder if there's something wrong. I've been very guilty of that.

Confused yet? Me, too.

The only "rule" I know of for sure was said by Tracy Mickley (a guy who knows a thing or two about selling stuff for a living)... "If it sells immediately, it's priced too low. If it doesn't sell at all, it's priced too high."

Good points well put James...

As you said, confusion is the order of the day for me at the moment. The main thing is that I'm giving this all some serious thought again now, in the face of a lot of new information as well. I think that's important one way or another...

It's been very interesting to see the ways that different people approach the issue of pricing! I tend to think about the costs/time involved in a fairly comprehensive way because I grew up in a family supported by my parents running small businesses. Having seen that it makes it very hard to put the blinkers on and think of 'costs' as just the steel and handles, as opposed to rent, llabor, materials, machinery, etc...

-A

 

[kc custom]

I don't want to break anyone's bubble but let see. I've been what I consider a full time maker
for 6ish years. That means all the money I take in is from what I make on knives. That means
the house, and vehicle payments and any fun or vacation money. My wife is retired (I'm not yet)
and she contibutes greatly to the monthly bills. My first knife sold in 1977 as a hobby maker.
My health care is covered by VA. Do you still want to be a full time maker? After a lifetime of
gathering tools I've pretty much got what I consider a dream shop as far as stock removal
goes. Like WG said in his book don't forget to pay you're taxes.
Ken.

 

[aarongough]

Aaron,

If it takes about 10 hours to make the knife you described you might want to look at finding more efficient methods to cut down that time.

Also give the customer a price for the knife without a sheath that give them a chance to think about what it would cost for them to make a sheath or buy one.

With the knife you described without a hand sanded finish I bet you could get down to 6 hours or less of hands on time.


Also things like cerakote do raise the $$$.

Agreed on the excess of time. Getting the time down without sacrificing quality has been something I'm working on, I'm sure the time will come down a decent amount during the course of the next batch or two.

 

[HallHandmade]

I'm just going to do stream of thought here, just some random points about where I'm at, that might apply to you as well. I'll try to keep away from too much autobiographical content.

I'm still really new to this, at least Knifemaking. I've built customs professionally for quite a few years (aerospace r&d/prototyping).

When I first started, I was laid off from my job, and wasn't sure if I still wanted to pursue a career in aerospace, at least as a technician. I started moonlighting doing business telecom service and installation, to keep the bills paid while I figured out what the heck I was going to do.

I'm an artistic/creative person. I was superb at my job in aerospace, but I hated it. I liked a lot of the people, but most everything else had grown into a disease for me. I hadn't really done anything "fun" in quite a few years, so when I was laid off I decided to take up Knifemaking. When I first started doing it, I was just trying to fill in time between telecom jobs.

Then, I realized that I hadn't been challenged to this level since my first years working in aerospace. I realized that I was enjoying this more than almost anything I've done.

After that happened, all of the questions/confusion evaporated. This is what I'm doing.


^^^ I actually planned on typing out a lot more than this. Rationalizations, etc. I realized that the important part had already been said. All of us have different financial concerns, and our own ability to produce in relation to our financial load determines out individual ability to do this for a living. I think that part of the confusion can only be solved by trial and error.

Aaron, I have a good bit of small business experience myself, and I was still hopelessly confused about this when I was in the process of decision regarding what I was going to do.

As far as your testing, it is painful, I know. That would really be written under "internal r&d", so basically you just have to eat the cost.

 

[aarongough]

I don't want to break anyone's bubble but let see. I've been what I consider a full time maker
for 6ish years. That means all the money I take in is from what I make on knives. That means
the house, and vehicle payments and any fun or vacation money. My wife is retired (I'm not yet)
and she contibutes greatly to the monthly bills. My first knife sold in 1977 as a hobby maker.
My health care is covered by VA. Do you still want to be a full time maker? After a lifetime of
gathering tools I've pretty much got what I consider a dream shop as far as stock removal
goes. Like WG said in his book don't forget to pay you're taxes.
Ken.

If you feel that your time has been well spent doing something that you love, then I'm still in.

If on the other hand you told me that it wasn't worth the time OR the money, then I would possibly be having second thoughts.

 

[aarongough]

I'm just going to do stream of thought here, just some random points about where I'm at, that might apply to you as well. I'll try to keep away from too much autobiographical content.

I'm still really new to this, at least Knifemaking. I've built customs professionally for quite a few years (aerospace r&d/prototyping).

When I first started, I was laid off from my job, and wasn't sure if I still wanted to pursue a career in aerospace, at least as a technician. I started moonlighting doing business telecom service and installation, to keep the bills paid while I figured out what the heck I was going to do.

I'm an artistic/creative person. I was superb at my job in aerospace, but I hated it. I liked a lot of the people, but most everything else had grown into a disease for me. I hadn't really done anything "fun" in quite a few years, so when I was laid off I decided to take up Knifemaking. When I first started doing it, I was just trying to fill in time between telecom jobs.

Then, I realized that I hadn't been challenged to this level since my first years working in aerospace. I realized that I was enjoying this more than almost anything I've done.

After that happened, all of the questions/confusion evaporated. This is what I'm doing.


^^^ I actually planned on typing out a lot more than this. Rationalizations, etc. I realized that the important part had already been said. All of us have different financial concerns, and our own ability to produce in relation to our financial load determines out individual ability to do this for a living. I think that part of the confusion can only be solved by trial and error.

Aaron, I have a good bit of small business experience myself, and I was still hopelessly confused about this when I was in the process of decision regarding what I was going to do.

As far as your testing, it is painful, I know. That would really be written under "internal r&d", so basically you just have to eat the cost.

Ian, glad to hear your experience has been positive! I think your passion shows up in your knives too. That last oak hunter was exceptionally nice.

The cost of the testing isn't factoring into my pricing at all to be honest. As you said, some amount of r&d you just end up having to eat... It was a fun process anyway, would have done it even if I wasn't making knives for others!

 

[12345678910]

Definitely a good point! I really enjoy the heat-treatment step so that's something I'd like to keep in house. Water-jet cutting the profiles is something I've been thinking about for a while and probably warrants a second look.



Hey Page,
To be clear I haven't had any issue selling knives at my current prices. In fact I've had to close my order list because things were getting out of hand.

I think part of the reason everyone's ideas of reasonable pricing is different is because we all live in geographically diverse areas, with different costs for rent and other basic expenses. For $100 for that knife I wouldn't even be covering my base costs...

Perhaps one of the things I look at if I'm ever to go full-time is to move to a different area where the cost of living is much lower than where I am now.

-Aaron

That's a big problem.

In Canada we pay more for everything.
They call that a Country Factor
More taxes
Every package of supplies has $50 or more in postage and fees.

Shop space, heat and power cost more especially compared to those in the warm states that can work outside in a leanto year round

but on final pricing we have to compete with everyone else



If you can sell it for that price, it's not too much.
It's much easier to reduce prices than to increase them.

 

[HallHandmade]

That's a big problem.

In Canada we pay more for everything.
They call that a Country Factor
More taxes
Every package of supplies has $50 or more in postage and fees.

Shop space, heat and power cost more especially compared to those in the warm states that can work outside in a leanto year round

but on final pricing we have to compete with everyone else



If you can sell it for that price, it's not too much.
It's much easier to reduce prices than to increase them.

I've thought about the location thing quite a bit.

I am in So-Cal, but in the high desert area, so it's not quite the sunny So-Cal that people think of in the movies. I'm actually a bit closer to Death Valley than Los Angeles. We get triple digit summers, and sometimes single digit winters.

This last few days have been some of the first cold days of the season, and I've been a total sissy when it comes to going out to the shop and working. Every time I am taking the "walk of shame" I think about how lame I am compared to all of these mountain man knifemakers we have here, posting pictures of stuff with icicles frozen all over it

Even so, I live in a somewhat mild climate compared to some, and I'm still looking at numerous tanks of propane over the winter, and at least 3-4 months of nonstop swamp cooler usage during the summer. I can't even imagine what it must be like for knifemakers that live in truly harsh climates.

Although, living in a colder climate is a superb excuse for a large forge

Ian, glad to hear your experience has been positive! I think your passion shows up in your knives too. That last oak hunter was exceptionally nice.

The cost of the testing isn't factoring into my pricing at all to be honest. As you said, some amount of r&d you just end up having to eat... It was a fun process anyway, would have done it even if I wasn't making knives for others!

Thanks!

If it makes you feel any better, I spent probably in excess of 3 shop days on that hunter, and sold it for $240, and I had a $33 block of stabilized wood, $5 in 416ss, and at least $30 in blade and HT. I'm guessing I was clearing something around $50 a day on that one.

BUT, I had a blast making it, and I'm happy.

Luckily I have a relatively light load on bills, because if you think 10 hours is bad, you should start counting in days like I do

 

[Willie71]

The forge was nice and warm last night. We had -29c earlier this week. Definitely not working outside.

 

[AddictedToGear]

I think that is fair when getting a quality product from an experience maker. I myself am starting in the $100-250 range for various customizations, but I am still more of a hobbyist and am learning many of my knives are not near the quality of yours yet, but that is why I price them much lower around the $100 range. Your pricing is reasonable, and many people do not understand the amount of work that goes into making a knife from a custom maker as most of it is done by hand. Your price is fair.

 

[Huntsman Knife Co. LLC.]

Aaron,

Price isnt just about materials and time, its also about what the customers will pay and the demand you get. Not all knives made from 01 with a walnut handle and good fit an finish cost the same. Some designs are better than others and the market will dictate the price those designs go for. I think your knives will be very popular with customers, list it for 300 and if it doesnt sell lower the price. I for one think 300 is a great price for that knife.

 

[kc custom]

My best reply is the same as Salem's. Lovin every minute.
Ken.

 

[Machinist Dude]

Pricing is very crucial when selling a knife, but one thing that I have noticed is ( just my two cents ) once you start selling your brand cheap. It will be branded as a cheap knife for the rest of it's life. Now a days you could see quality customs at less than $100 :thumbdn: :thumbdn: :thumbdn: ....better start at mid range

 

[GTH11]

300 seems a bit high with minimal brand recognition, and having only introduced a handful to market. On the other hand... if you can create the market demand for your heat treated A-2, and sell the heat treat as better than usual, and back that up with demos, and pass around testings, more power to you, it can be done. As a newer maker myself, Ive sold several hunter style knives for over 300 dollars, however they were very dressed up, had customer input, and came with hand made leather sheaths. Your work is clean Aaron, imo you should get a table at a decent size show, and see what happens! Give a few away to friends that have friends!!
Greg

 

[james terrio]

Having seen that it makes it very hard to put the blinkers on and think of 'costs' as just the steel and handles, as opposed to rent, labor, materials, machinery, etc...

Of course we have to be concerned about all that. The tricky part is, most clients neither know, want to know, nor give a hoot about all that stuff. In most eyes, the gap between a $20 bar of steel and a $300 knife is mind-boggling.

Working almost exclusively through forums like this one is tremendously helpful, because a high percentage of the potential customers here do have a grasp on what actually goes into making a fine handmade knife, and what makes them special. It's just a matter of targeting your marketing effectively. Your average Joe picking up a hunter, folder or kitchen knife at Wally World thinks we're all completely bonkers

 

[aarongough]

Pricing is very crucial when selling a knife, but one thing that I have noticed is ( just my two cents ) once you start selling your brand cheap. It will be branded as a cheap knife for the rest of it's life. Now a days you could see quality customs at less than $100 :thumbdn: :thumbdn: :thumbdn: ....better start at mid range

Agreed, and an interesting point!

300 seems a bit high with minimal brand recognition, and having only introduced a handful to market. On the other hand... if you can create the market demand for your heat treated A-2, and sell the heat treat as better than usual, and back that up with demos, and pass around testings, more power to you, it can be done. As a newer maker myself, Ive sold several hunter style knives for over 300 dollars, however they were very dressed up, had customer input, and came with hand made leather sheaths. Your work is clean Aaron, imo you should get a table at a decent size show, and see what happens! Give a few away to friends that have friends!!
Greg

I'm working on the brand recognition part, slowly but surely. Getting more to market is happening shortly! I've been holding off on order for the last few months as I wanted to refine the design and my heat-treatment process to my satisfaction. I'm happy with where I'm at now so it's full steam ahead! 5 new knives will hopefully be largely ready by the end of this week, been working on them for a little while now.

I keep hearing about these pass-around testings, but haven't actually seen a thread discussing one directly. The concept sounds interesting though, I'll have to go looking on the forum for more details!

Of course we have to be concerned about all that. The tricky part is, most clients neither know, want to know, nor give a hoot about all that stuff. In most eyes, the gap between a $20 bar of steel and a $300 knife is mind-boggling.

Working almost exclusively through forums like this one is tremendously helpful, because a high percentage of the potential customers here do have a grasp on what actually goes into making a fine handmade knife, and what makes them special. It's just a matter of targeting your marketing effectively. Your average Joe picking up a hunter, folder or kitchen knife at Wally World thinks we're all completely bonkers

Yeah I've had comments of that nature on my videos a number of times: "Why make one when I can buy one that's just as good for $12 at Walmart". I think more videos are in order to show people all the work that goes into a knife... I also enjoy the process of making the videos, so it's two birds with one stone!