Realistic discounts to Dealers

Mark Williams

Mark Williams

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What percentage of doing the following is okay with You guys. Especially makers that really on their knife income as their sole income.

*buying equipment to work on parts
*Ordering parts
*working and on parts for many, many hours to produce knives and sheaths.

Now here we have a person that comes along and wants you to pretty much give him a 1/3 off discount.

Does that seem to be an appropiate discount to You Guys ?

What percentage do you as a maker think should be the standard discount to a reseller of custom knives.

No dealer input please !!!

Mark
 
25% max to me seems reasonable. But when he buys them he owns them this is not Walmart.
 
That is a tough one Mark. 1/3 is a reasonable discount for a cash buyer. However if the secondary market will absorb double or triple your original asking price than that is unreasonable to some folks. If it is a consignment than 1/3 off the sale price than that also is very reasonable.

What quantity the buyer sales for the maker has a lot to do with it. One knife a year wouldn't give me much confidence so it really depends on what a makers needs and wants.
 
He better be moving a lot of stuff for a 1/3.I had a guy sell 10 of my custom bits since christmas,his kid wanted a personalized piece,thats when he got his discount.
 
30% discount is pretty standard with custom knife dealers. I have sold many, many knives to dealers in the last 15 years and the dealers helped a lot in getting my name out there. It was well worth the price. I don't sell many to dealers any longer, just can't make enough and I do 20% now.
 
The dealer may need you more than you need him in some cases. Not putting down anyone at all so dont get me wrong. If I cant keep knives in my shop, why would I want to loose 20% at all when I can sell to the customer.
With that said.......

I can see where you would make your money selling to dealers since there isnt any customer relationship, which takes time, might have a custom 1 of job, which takes time and added effort.

I think If I were to sell to dealers it would be agreed that I would make x number of said pattern and what I delivered is what he pays for. Keep it simple so I can knock them out faster and wont need to market a specific knife to a specific customer.

I think 30% is too much to discount. I would not want to even go as much as 25% but I would want to agree to more than 5 knives so I can just get rolling and make my loss up that way. If that makes since at all....
 
If the knife is "hot"...then there is no need to go to a dealer...

20-30% is typical.

Depends on how bad you need the dealer or how bad the dealer needs you.


Personally, I have no problem with selling to dealers...but my preference is to be my own dealer. :D


Honestly, making 30 of one knife style (in one batch) takes a lot less time than making 30 knives individually. Better yet if they are all the same materials.

I've done a few deals with dealers and they've turned out good...and hopefully will have a few more coming up soon.


More than 30% is too much to ask....and the quantity should be over 10.





Mark, can you explain this more?

*buying equipment to work on parts
*Ordering parts
*working and on parts for many, many hours to produce knives and sheaths.
Click to expand...
 
My policy is the same for all regular customers, dealers, and all others. If you buy 1 you pay the full retail, if you buy 2 I may give you a bit of a break, if you buy lots you get a big discount. The more you buy the more you save. If you pay with cash I may give you a discount, but it will be a small one. Customers who routinely buy from me can expect a break in price, even if they only buy one. This policy applies to everyone, a dealer who walks up to me for the first time(no matter who) and asks for a 33% discount on 1 knife, will be told the policy, and if they are insistant will be told to sod off.
Del
 
I'm not saying dealers dont serve a purpose.

I'm just thinking that 30% is enough to make you cuss. :)
 
In my case I try to deal direct with my customers, that way I can give them the best price possible.

If I were to deal with dealers my selling price would have to increase by 30% in order to give the dealer his discount. The result is that my regular customers would be upset.

Is it worth it?

The big determining factor is whether or not you have a web site that works for you and whether or not you have a great desire to send the dealer's children to college.

George
 
There's a couple factors that come into play here, are the knives your making/selling the more common every day knives or are they more in the lines of collector pieces. Most common knives are sold at lower prices and gain response from bigger audience, collector pieces in the higher price ranges on the other hand have a much smaller audience. A good dealer can/will help you get your name to all audiences and when it comes to collectors he can get your work to many that would not otherwise see it.
I've sold some pieces using a purveyor and it has helped me a great deal, their web site will get hits from all types of knife enthusiasts and usually this is where collectors will go to become familiar with other makers, especially new makers work, here they can watch a maker progress also. Dealers are good for this business.
All that being said, I haven't paid more then 20% to a dealer/purveyor, but those sales were also on consignment to where the purveyor had no out of pocket expense to obtain my work. Depending on the purveyor/dealer I would consider paying more depending on what he offered, if a dealer offered to buy outright I would consider a higher % discount, they have to make a living also + their going to try harder to sell your knives because they want to regain their out of pocket expense as quickly as possible. This will mean more of your knives sold and in the hands of the buying public, which will help others become familar with you and your work = a very good thing. As the old saying goes, " it takes money to make money" and a good dealer is a very good form of advertising.

Bill
 
Good post, Bill.

I started selling to dealers before the internet was big. Nobody knew who I was but the dealers liked what I was making and they had the customers. My knives were at all the shows across the country, while I was in the shop making more. A cheap price for that kind of advertising. Then the websites came along and my knives were all over the net, probably too much, but again, the advertising was strong.

Also dealers talk to a lot of folks including Knife mag editors. They are usually talking about custom knives and the makers who make them. If they don't know who you are, they wont talk about your knives.

I figured my prices at the lowest I could live with and added 30%. You can't price your stuff at the bare minimum and then give a 30% discount. Unless you want to loss money.

Makers who do this for a living, tend to look at things a bit different. Nothing wrong with not selling to dealers but they do provide a good service for custom makers. It is easier to sell knives if you are well known with the knife buyers.

Great thing about being a knife maker is, a maker can sell to anyone he wants to, or give them away, or just keep them. Have it anyway you want it :D
 
At some shows when retail sales are slow, the dealers can be a big help! I would rather sell a knife to a dealer at a discount rather than take it home, it's money in your pocket. If you take the knife home you run the risk of taking the same knives to multiple shows and customers see the same knives over and over. You can always make another knife.
 
For someone like me, I think that a dealer can be invaluable for purposes of promotion. The only problem is that anything sold to a dealer is essentially a "loss leader" for many of us anyway. As I am a new maker, my knives will bring X. In the case of a forged hunter with an exotic wood handle, I have been told that the price should be in the $175 range. Unfortunately, as I do not make my own sheaths, I have $45 invested in a Treestump pouch sheath and most people expect a knife t come with a "free" sheath, no matter how much it cost the maker. Ad to that the cost of the wood and I am already maybe $60+ into the knife. I can't really charge extra for wood unless it is something like ironwood burl and even then, I doubt that I can charge the extra $30-35 extra that it cost over say maple or walnut. Now, lets say that the dealer is kind and only wants a 25% discount on my walnut handle hunter, even though this is a small, inexpensive knife. So take out what? $43.75. That means that I have less than $75 left over to cover all of the rest of my raw materials, consumables, energy costs, labor, etc. Now as long as I am buying sheaths for others, I will always take a haircut, but you see what I mean about knives sold to a dealer being even more of a loss leader than normal...lol.
 
You think it's bad when a dealer gets $43.75, try taking the hit on a $4000 knife to a dealer, that's a grand discount!

At your price point there is a lot of competition. So your choices are to make a better knife, raise your prices or have cheaper sheaths made.

You also have to be a savvy shopper and buy materials at the best price you can so you have the lest initial investment in your knife.

As you make more knives and become more efficient at it, the time it takes to make one goes down. You can make more knives with less time invested in each one. If you can make 3 knives in a day as opposed to 1 you raise your daily profit.
 
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