Some price increases are inevitable

Nathan the Machinist

Nathan the Machinist

KnifeMaker / Machinist / Evil Genius
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Knifemaker / Craftsman / Service Provider
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Feb 13, 2007
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Some price increases are inevitable. I try to adjust costs over time during the release of new patterns, but current cost pressures will dictate some increases to existing patterns.

My materials are up a whopping 15-20%. Some carbide and other consumables (such as abrasives and tumbling chemicals and media) are worse. Labor is similar as are secondary processes. The cost of capital is about to go way up. The only things not being affected are rent (I own) electricity and my (arbitrary) machine spindle rate. <--- and I ought to increase that because, while I own them, my machines aren't going to last indefinitely and the new machines are getting spendy. (Go price a new Mori Seiki, it's staggering)

Obviously, the existing pre-orders are not affected by this. I added 5% to those patterns for the sale but the Friday sales of those patterns will be 10-15% over the original price from a couple years ago.

I'm posting this for you guys because I want you to understand this isn't greed. Even though the inflation you see may only be accumulative 7.7% over this time period, your inflation includes things like food prices and clothing that are not cost drivers for my expenses. My inflation is worse than yours. Our business model has always been high-performance knives made for you with the best bang-for-your-buck in the high-end area of this industry. I believe that we dominate bladesports because we are the best high performance knife shop in the entire industry. Our K18 sword can do things that no historical sword could have ever hoped to do. Part of that kind of performance at a (somewhat) reasonable cost has been possible by relatively slim margins here and you're buying direct. There are aspects of this high-performance that cost me more than others operating in this industry and some of these cost increases are hitting me particularly hard. I don't have the wiggle room to absorb them.

I hope that folks don't become discouraged as we adjust our prices going forward. The rest of the industry is also going to have to adjust (or die) but we're a small and lean outfit, we need to make this adjustment sooner than later. Thank you for all of your continued interest in our work.

Nate
 
We've seen rates go up on most everything including other brands of cutlery also. I think the extreme value we get from your knives is truly a bargain in the industry. I think your openness about everything is another reason your customer base stays so loyal also. I think most if not all will understand the need for an adjustment. Thanks for letting us know up front ... very standup.
 
Thanks for the transparency, Nathan. I always thought your knives were underpriced. Also, personally, many of us see more inflation than what the CPI shows.

That being said, I'm very happy that we refinanced in Dec :) You win, you loose .... Won't see these 2.2% for quite a while in the future ....
 
patrickguignot said:
Thank you for the explanation and the transparency. Could you please elaborate on the quoted sentence? Is it because of the slow wet grinding? The special attention to geometry? Is it a specific factor or a lot of details?
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Heat treat (which is not just the hardening and tempering) is just one small example. It's a critical aspect of a knife and is a relatively small part of the cost of a knife (all things considered) so spending twice as much on it has always been a no-brainer. This is one area that can not be compromised.

For example, compared to another North Carolina manufacturer of relatively expensive tactical fixed blades, our heat treat costs us probably twice as much for a similar size knife as theirs. The pricing of the product has been similar. So, if their cost for HT goes up a buck, ours goes up two bucks, for this process. Percentagewise we may be hit by the same amount, but the effect on my bottom line is double. Being lean and a direct seller I have been able spend extra on aspects of my production and still be competitive, but when those extra expenses go up (and other manufactures don't have those same expenses) it disproportionately hits my bottom line.

In the long run, everybody is going to have to adjust or make it up somewhere (margins are margins). But makers with higher profit margins and more complicated distribution adding cost to the work have a bigger buffer than I do and can absorb and spread these bumps better than I can.
 
Thank you Nathan for the update information , very much appreciated !!!! I think just about if not everyone is feeling the inflation these days.
I don’t see myself going anywhere. For one your customer service and communication with your customers is above and beyond !!! The CPK knives speak for themselves with just how great they are !!
 
I appreciate the candor of your explanation Nathan. I am not surprised by this news at all given that inflation is much higher than reported. I want your team to continue to thrive and innovate as only you do. Even with the price increase, you are the still the best value out there. I will keep buying your knives as long as you keep making them. Live long and prosper. 🖖

Phil
 
Nathan the Machinist said:
Some price increases are inevitable. I try to adjust costs over time during the release of new patterns, but current cost pressures will dictate some increases to existing patterns.

My materials are up a whopping 15-20%. Some carbide and other consumables (such as abrasives and tumbling chemicals and media) are worse. Labor is similar as are secondary processes. The cost of capital is about to go way up. The only things not being affected are rent (I own) electricity and my (arbitrary) machine spindle rate. <--- and I ought to increase that because, while I own them, my machines aren't going to last indefinitely and the new machines are getting spendy. (Go price a new Mori Seiki, it's staggering)

Obviously, the existing pre-orders are not affected by this. I added 5% to those patterns for the sale but the Friday sales of those patterns will be 10-15% over the original price from a couple years ago.

I'm posting this for you guys because I want you to understand this isn't greed. Even though the inflation you see may only be accumulative 7.7% over this time period, your inflation includes things like food prices and clothing that are not cost drivers for my expenses. My inflation is worse than yours. Our business model has always been high-performance knives made for you with the best bang-for-your-buck in the high-end area of this industry. I believe that we dominate bladesports because we are the best high performance knife shop in the entire industry. Our K18 sword can do things that no historical sword could have ever hoped to do. Part of that kind of performance at a (somewhat) reasonable cost has been possible by relatively slim margins here and you're buying direct. There are aspects of this high-performance that cost me more than others operating in this industry and some of these cost increases are hitting me particularly hard. I don't have the wiggle room to absorb them.

I hope that folks don't become discouraged as we adjust our prices going forward. The rest of the industry is also going to have to adjust (or die) but we're a small and lean outfit, we need to make this adjustment sooner than later. Thank you for all of your continued interest in our work.

Nate
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I actually expected this six months ago. I appreciate the fact that yall keep the prices down even though your knives are worth more than yall charge for them. Thanks!
 
Nathan,

It is what it is. Unfortunately, prices go up. I was always a $35-$75 a knife guy and not really into fixed blades. A buddy of mine showed me your OGFK and I was like "you spent how much on a knife?!" I then handled it and could instantly feel and tell the difference. He told me that the FK2 would be even better, he was right. The DEK1 supersedes them both. Your knives are not cheap but buying quality only hurts once. I now have several and will buy a few more but only ones that are more unique or fill a niche. I find more enjoyment out of using. That’s the reason I didn't get a basic FK or Kepart; i don’t see where they would perform better than other CPKs. I look forward to some of the upcoming projects. I’m a fan and will continue to be one. I hope for your continued success.
 
Understand fully. Telling our customers their steel building package is over twice the cost vs two years ago is frustrating but same thing. Have to pass the expense through. Same for wood and well, most of the building products we use has sky rocketed. So I am not surprised of this news. Still going to want me some CPK regardless!!! 💪:)👍
 
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