profit on knives

[Jay_Wyatt]

I have been looking over many of my knives. I am looking at Benchmade, CRK, Spyderco and a few others. It makes me wounder how much profit a knife maker gets after makeing the knife. I can understand the higher end knife maker's being able to stay in bussiness, but what about the ones with a much lower profit margin? Even on the kabar Dozier that runs about 20$ ; finish and quality seem to be pretty good for such a low priced knife. It makes me wounder if there will be other knife companies that go the way of Schrade.

 

[illumination]

I don't think its that simple. There are a few things that I think need be considered:

Volume. Some of the big producers may not make much per knife, but they sell so many of them (e.g., Buck 110). Buck has probably sold hundreds of thousands of them (if not more). As far as I know, they are still US made (hurrah for Buck). Total profit earned selling thousands of knives at a low profit/knife can vastly exceed total profit selling a relatively small number of knives at a high profit/knife.

Economies of scale. The big manufacturers can make decent quality knives efficiently, driving down the cost/unit. The small manufacturers often don't even produce their knives themselves, or have to run frequent tool/die changes to produce small batches of specialized knives so they are less efficient and have to charge more per knife.

Materials. You can produce some pretty good knives with some pretty cheap materials. The higher end shops use materials that are much more costly (e.g., S30, VG-10, G10, etc.); hence, the knives must be priced much higher.

Place of manufacture. Many cheap knives are now made in China (or other low cost overseas locations), where the labor is dirt cheap, the environmental laws non-existant, etc. so the manufacturer can produce (sometimes pretty good knives) cheaply. Nothing to be proud of, though.

Quality. Quality is very expensive. It is far more costly to produce something of very high quality than something of "ok" quality. Many of the small shops spend a lot on quality, which once again increases cost and therefore the cost they have to charge to make a profit.

From what I understand, Schrade collapsed primarily because they didn't change with the times. They kept producing "Old Timers" until they became an old timer. Meanwhile the rest of the industry successfully introduced new products (e.g., Axis locks, S30 steel, assisted opening, etc.), taking market share.