Role of makers in secondary market?

[Joss]

All,

This is to be an open discussion on what could or should the role of makers on the secondary market of their knives. By secondary market I mean from one collector to another, whether the seller was the initial buyer or not.

I feel very strongly that the maker doesn't owe anything to a collector trying to sell their piece. With this said, I am appreciative of anything a maker might be willing to do, and I actually believe that it might be a very shrewd business tactic for a maker to help collectors sell their work. Beyond the long term strategic benefits of establishing a dynamic market for one's knives, it would be fair for the maker to request a commission on any such deal (10% - 20% seems right).

Personally, I have had the full range of experiences, including in one case a deal that was fully brokered by the maker. I have also had one case of a maker who owed me a favor and yet did nothing (that I could see) to help me sell one of his knives. This was a very disappointing experience.

Makers, collectors, what do you guys & gals think?

 

[Win Heger]

In my opinion the maker shouldn't be influenced by or care about the secondary market. That market is sometimes driven by factors out of the makers control and to get caught up in it might be a painful experience.

Painful Experience: Makers knives are selling for x times his table price. Maker continues to raise his prices to capture some of the secondary profit. Maker goes out of favor, sales tank. Maker is forced to reduce prices, sales continue to tank. Maker gets full time job.

I believe a maker helping you sell one of their pieces is not really participating in the secondary market, they're merely helping out a client. I would hope a client wouldn't keep coming to the well. I don't want makers I have orders with spending time brokering knives, give that 20% to a good dealer!

Win

 

[Kohai999]

I don't want makers I have orders with spending time brokering knives, give that 20% to a good dealer!

Win

I think that makers should help their customers any way that they can....there are many stipulations and modifiers to this, though.

Win, if the maker is at a show like Plaza, and is a popular maker(most of them are) and they have 10 knives for the show-Friday/Saturday...it should be no sweat for them to add a knife to the table, ESPECIALLY if you are going to kick down.

If the maker is a sucky salesman(worse than you), why would you ask them to help you sell it in the first place?

The maker shouldn't be wasting time helping your lame ass when they need to be making knives, but if there is a potential buyer for a specific piece(the one you are selling) and the maker has no intention of making that model for 5 more years, or has discontinued it...it would do both maker and seller a world of good to come to an arrangement.

IMO, kumbaya.

Best Regards,

STeven Garsson

 

[jujigatame]

I agree that a maker is not obligated to get involved in the secondary market on a collector's behalf. A maker may help sell someone's knives as a favor to a friend, or as a business transaction for which they receive a fee, or under some other circumstance in between.

However, there is a risk that if they do it for one person others may piggyback on to that and have an unrealistic expectation of getting the same treatment. I've seen some collectors act very bitterly because they perceived a maker was slighting them for not "helping" them with the sale of knives. Perhaps it's because the custom knife world is one where it's relatively easy for collectors to be in touch with makers in casual, friendly environments like internet forums, but some folks seem to assume I have one of your knives, you seem like a cool guy, why don't you help me out with this? is a given condition of the relationship, so to speak, between the two parties.

 

[moblues]

If you seek a maker to give you information on a blade you sell, you ought to give something to the maker for a consult.

If a maker gives you info free, thank them and press on.

I have had a great maker offer his info to mr gratis and I appreciated his info as I had little from the seller. That raised the maker in my eyes.

 

[Shing]

There is going to be conflict of interest for a maker to help sell a knife for a client. The maker needs to move knives he has for his current prices, if the client has a knife that is priced differently to the makers current price for the same knife then he is putting himself in a difficult position, either undercutting his current price or priced over his current price.

As a maker, I do not want to re-sell knives I have already sold because that is not a skill I have and if I don't get as much as the client expects, both parties will feel let down.

If a client really want to sell a knife there are many dealers who I'm sure can help.

 

[Win Heger]

I believe a maker helping you sell one of their pieces is not really participating in the secondary market, they're merely helping out a client. I would hope a client wouldn't keep coming to the well.

Win

STeven, I think we actually agree. And believe me as a salesman I need all the help I can get.

Win

 

[SharpByCoop]

I was really hoping this thread would be about the role of makers sustaining value for collectors in the secondary market, and not just incidents of selling a specific piece.

THAT'S a topic that deserves more discussion.

First: Does a maker have an obligation of some form to keep their values up?

Second: If so, what would be some of the objectives?

This topic would be of interest to anyone who has 'lost' money selling a knife. Some moreso that others. The obvious resale value is desireability.

The key questions are what makes and continues to perpetuate desireability.

#### The original question is valid, too. I'm simply adding more complexity into the thread.

Coop

 

[Keith Montgomery]

I think a maker's role in the secondary market is to keep making the best knives he/she can for the primary market. Along with that, makers should promote their work, and give great customer service to anyone that owns one of their knives. If they want to help their customers sell older knives, that is up to them. It is not something that I would expect them to do.

 

[Joss]

I was really hoping this thread would be about the role of makers sustaining value for collectors in the secondary market, and not just incidents of selling a specific piece.

Sure, this is the broader picture.

 

[ptgdvc]

The decision is completely up to the maker, and I would respect his choice 100%.

I would only consider asking a maker to put a piece on his table IF I was spending the proceeds of the sale on another knife from that maker.

The maker deserves to be paid for his trouble if he sells the knife.

The knife should be in "as new" condition and priced realisically.

P

 

[Kohai999]

The role of a knifemaker is to make knives.

The role of a professional knifemaker is REALLY more difficult to define, because there is no handbook, especially today, when people think as individuals, their responsibility is to themselves, ONLY.

IMO, as I wrote before, a knifemaker should do anything they can to help their customers…..within reason.

As a collector…I would like to have a good indication that the maker is a) going to be making knives for a long period of time(Ken Steigerwalt, R.J. Martin, and Butch Vallotton were all new makers when I started collecting) OR b)are going to come on like gangbusters, and leave a very big impression on the community(Nick Wheeler, John Young).

So, the gamble is made on any maker you choose, and hopefully, you were smart, and lucky, and still happy with your knife, and you need to sell it.

If the maker has satisfied criteria A and/or B….they are already WELL on their way to helping to keep their values up…..but obviously, if they are not in the game, that is hard to do….in the case of Nick, posting on the Forums helps keep his values up…because people are interested…but he is a real rare case.

Things like active marketing, using the media(magazines, online pubs, news…..) all these HELP the makers value…AND in turn, keep those pieces that are worthy(REMEMBER, piece first!)at the highest possible value.

In answer to Coop’s question of what gets a maker enduring “hotness”…..unique designs/fantastic execution(generally expected), top-notch customer service, personal willingness to “invest” in marketing/following through….and the commitment to see the business AS a business, and not some long-term hobby until the kids grow up.

The makers who make the effort to excel are often rewarded for those efforts, and this often rewards the customers who "invest" in them, and their efforts.

IMO, kumbaya.(tm)

Best Regards,

STeven Garsson

 

[RogerP]

First: Does a maker have an obligation of some form to keep their values up?

I don't know that I would put it as high as an obligation - some makers take the "I don't care about the secondary market." approach and I'm not sure that this runs contrary to any requirement on their part.

But the collector who does care - at least to some degree - about the retained value of their collection will likely factor in such indifference on the maker's part when considering whether to spend money on his knives, and if so, how much. Personally, I wouldn't want $3-5k worth of a maker's knives if he didn't give a fig about their retained value post-sale. But that's me. Others will choose differently.

Certainly, the more "professional" makers - the ones who a) have at least some concept of their knifemaking as a business and b) have identified long-term goals and at least given some consideration as to how they might be achieved, will be concerned about this and will do what they can to maintain and increase the value of their knives.

Fisk is an industry leader in this regard, IMHO, though he is not alone.

Roger

PS - On the more narrow question asked - I'm with Peter - I probably wouldn't feel comfortable asking a maker to put one of my knives on his table unless it was to fund the purchase of another knife from that maker. Not saying it is wrong to do otherwise, just not my approach. Of course, circumstances of illness or dire financial hardship are in a different category.

 

[ptgdvc]

Originally Posted by SharpByCoop
Does a maker have an obligation of some form to keep their values up?

None whatsoever. However his own self interest may be involved, in some manner.

Out of perverse curiosity: What EXACTLY would a maker DO in order to support prices of his work in the secondary market?

An inquiring mind would enjoy hearing some examples of how this is done.

P

 

[SharpByCoop]

Peter, I sure don't have an EXACT answer, but STeven's sentence above:

what gets a maker enduring “hotness”…..unique designs/fantastic execution(generally expected), top-notch customer service, personal willingness to “invest” in marketing/following through….and the commitment to see the business AS a business, and not some long-term hobby until the kids grow up.

...describes nicely some of what I was alluding for.

Rare incident: I once had a small hunter I was selling on eBay and I was asking about 1/2 of the purchase price. The maker was Frank Bradley. I asked a question to Frank about the knife for the listing info, and when he watched the listing, he ended up buying it himself. He claimed he could easily sell it and at the time he didn't want his work languishing for cheap. That went above and beyond.

Coop

 

[Kevin Jones]

Originally Posted by SharpByCoop
Does a maker have an obligation of some form to keep their values up?

None whatsoever. However his own self interest may be involved, in some manner.

Out of perverse curiosity: What EXACTLY would a maker DO in order to support prices of his work in the secondary market?[/U]

An inquiring mind would enjoy hearing some examples of how this is done.

P

He simply promotes himself and his knives. Or even more simply, he does everything he can to make people want to purchase his new and previously sold knives.

He goes to shows, has a website and keeps it interesting and up to date, he does demos, belongs to organizations, he tries to get his knives in magazines/publications, he participates on forums, he teaches classes, he judges shows, he keeps in touch with collectors, he supports activities that support knives (hunting, camping, fishing), he writes and gets quoted in knife publications, he works with production knife companies to promote his his knives, he displays his knives at galleries and art shows, he pursues awards and public recognition, he has his knives photographed, he maintains his new knife production at a point so as his previously sold knives don't become permanent fixtures on dealer websites, he gradually increases the prices on his new knives as his market position increases thus raising value in his secondary market knives.

Should I go on?

 

[Don Hanson III]

He simply promotes himself and his knives. Or even more simply, he does everything he can to make people want to purchase his new and previously sold knives.

He goes to shows, has a website and keeps it interesting and up to date, he does demos, belongs to organizations, he tries to get his knives in magazines/publications, he participates on forums, he teaches classes, he judges shows, he keeps in touch with collectors, he supports activities that support knives (hunting, camping, fishing), he writes and gets quoted in knife publications, he works with production knife companies to promote his his knives, he displays his knives at galleries and art shows, he pursues awards and public recognition, he has his knives photographed, he maintains his new knife production at a point so as his previously sold knives don't become permanent fixtures on dealer websites, he gradually increases the prices on his new knives as his market position increases thus raising value in his secondary market knives.

Should I go on?

Well Kevin, that sums it up right nicely

 

[ptgdvc]

He simply promotes himself and his knives. Or even more simply, he does everything he can to make people want to purchase his new and previously sold knives. He goes to shows, has a website and keeps it interesting and up to date, he does demos, belongs to organizations, he tries to get his knives in magazines/publications, he participates on forums, he teaches classes, he judges shows, he keeps in touch with collectors, he supports activities that support knives (hunting, camping, fishing), he writes and gets quoted in knife publications, he works with production knife companies to promote his his knives, he displays his knives at galleries and art shows, he pursues awards and public recognition, he has his knives photographed,

All reasonable courses of action to enhance the maker's postion in the market place and to sell new knives, and I would agree that older works may benefit from these actions, to a lesser degree.

he maintains his new knife production at a point so as his previously sold knives don't become permanent fixtures on dealer websites,

I frankly don't understand what you are saying. What is the connection?

he gradually increases the prices on his new knives as his market position increases thus raising value in his secondary market knives.

This is fine, if you take the view that a maker's work is a mere commodity. It is the tide lifts all boats theory. I don't. I think there will always be wide variations based on the desirability of the individual pieces. Not all examples are created equal. Also your model works only as long as the market is willing to pay ever increasing prices for new work. There are no guarantees in life.

The secondary market price is whatever the buyer and seller agree that it is.

P

 

[Kevin Jones]

Originally Posted by Kevin Jones
He simply promotes himself and his knives. Or even more simply, he does everything he can to make people want to purchase his new and previously sold knives. He goes to shows, has a website and keeps it interesting and up to date, he does demos, belongs to organizations, he tries to get his knives in magazines/publications, he participates on forums, he teaches classes, he judges shows, he keeps in touch with collectors, he supports activities that support knives (hunting, camping, fishing), he writes and gets quoted in knife publications, he works with production knife companies to promote his his knives, he displays his knives at galleries and art shows, he pursues awards and public recognition, he has his knives photographed,

All reasonable courses of action to enhance the maker's postion in the market place and to sell new knives, and I would agree that older works may benefit from these actions, to a lesser degree.

he maintains his new knife production at a point so as his previously sold knives don't become permanent fixtures on dealer websites,

I frankly don't understand what you are saying. What is the connection?

The connection is; if a maker is producing enough new knives to fill demand (or more) then collectors will most likely not buy his old knives from dealers/secondary market. It's been my experience that collectors will most always buy a maker's new knives before old ones. I don't know why.

he gradually increases the prices on his new knives as his market position increases thus raising value in his secondary market knives.

This is fine, if you take the view that a maker's work is a mere commodity. It is the tide lifts all boats theory. I don't. I think there will always be wide variations based on the desirability of the individual pieces. Not all examples are created equal. Also your model works only as long as the market is willing to pay ever increasing prices for new work. There are no guarantees in life.


The secondary market price is whatever the buyer and seller agree that it is.

Yes true, and if the maker has promoted himself and his knives to increase his market position then the seller will most likely be able to ask more and the buyer will most likely be willing to pay more

**************************

 

[NickWheeler]

Interesting and thought provoking thread

I have been EXTREMELY fortunate to have built a lot of good relationships with other makers and collectors and also have a crazy strong drive to produce knives to the very best of my abilities. That has helped get the few knives I do make into the hands of collectors that have faith in me to do solid, clean work, and not feel any negative reservations when it comes time to sell a piece.

I think the biggest thing I can do to help the secondary market is to keep making knives and try to get better with each one.

I think “my” secondary market came close to suffering a harsh blow when I took on my current job. But staying in touch with people through the forums and the phone kept me from totally fading out of people’s knife minds.


Getting my Js further established my desire to not only make knives but keep progressing, and winning the Peck award gave a little extra boost to that as well (I think/hope).

I was never a professional maker. I made knives full-time, and I always did my best, and tried to treat people right… However, I did NOT have the basic, strong bones of a structure and foundation like guys such as Jerry Fisk, Don Hanson, Daniel Winkler, or RJ Martin, etc… do. I think a great deal of that was the ADD keeping me from focusing and organizing myself like I needed to. But I have started down a path of harnessing the good and bad aspects of a creative ADD mind and feel I can work toward being a truly professional knife maker much like the four I just mentioned... with more time, structure, dedication, and passion.

As I do that… I will also work toward my Master smith stamp… which I think will further help my secondary market as it will place me among an established group of great makers.

And as far as selling a knife for a customer, I’ve done it a few times… Right off my table at shows, and never asked for anything for it. I figured I got paid once already for those knives. So long as it wasn’t a regular habit and the customer wasn't just marking them way up to make a buck, I don’t have a problem with it. The only time I wouldn’t want to do that is if the knife is from way way back and so far removed from my current standards for fit&finish that it embarrasses me!

Otherwise.... ALL good