Spyderco pricing policy

Status
Not open for further replies.
Bob,

That would be true if I polled the members here. The members here obviously would research their buying decision more than the average consumer. Overall, however, studies indicate that internet sales are mostley impulse buys or people looking for items which are not carried by local stores. Once they find them or something close to what they are looking for they usually buy it rather quickly without much thought assuming of course the price is right.

Studies show most internet buyers do less than 10 minutes of homework before making a buying decision. Obviously not the case here for most members.

------------------
Best Regards,
Mike Turber
BladeForums Site Owner and Administrator
Do it! Do it right! Do it right NOW!
www.wowinc.com





 
I don't know if it would be possible, but what about setting up some type of petion page BladeForums were people could leave their name and email address and the whole thing could be sent to spyderco?
 
Hello. This is my fist time logging on. Sorry for the Email confusion. Currently processing private Email connection.

I have been enjoying the site. Seems like an intelligent, enthusiastic group of edge nuts. Great place to visit.

Heard many nice comments about Spyderco. Thank you. Also thank you to those that came to Spyderco's defense over the current issues. (Manufacturers Allowable Advertising Price - "MAAP" [saves keystrokes] Especially James, Dexter & Mike. Lets us know our efforts are not going unnoticed. Appreciate.

I was quite surprized to hear so much negativity and "bashing", especially in the light of confusion. I learned from the late Mr. Al Mar that "sharing of knowledge" is a valuable tool to aid in human cooperation. I will try to add some information that might help.

I would first like to provide some background; 1) Spyderco's "customer" is the "person that cuts with the knife". No offense intended, but the distributors, dealers, catalogs, NET suppliers or any one else between Spyderco and the "person that cuts with the knife" are partners in a chain to reach our "customer" 2) I believe that Spyderco has in the past 20+ years demonstrated that producing an; innovative, modern, high quality, safe knife has always held a higher value than the "bottom line"
3) Spyderco is a relatively small (smaller than Benchmade and about 1/5th the size of Gerber or Buck)family owned company. There are no stock holders driving the "bottom line". No one to please but our "customer" and the Spyderco crew.

Regarding the term "ELU"; When speaking with a manufacturer, the term "Customer" usually refers to a distributor or dealer. When speaking with a distributor, his "customer" is usually a dealer. When speaking with a dealer, the term "customer" refers to the consumer or "End Line User". The term "customer" became confusing. The term "consumer" seemed to have a "lesser value" for what we think is the most important part of the business chain...so we used the term End Line User. ELU saves keystrokes. (like SKU = Stock Keeping Unit) No demeaning value, no new classificiation, no communist plot. Just an attempt at greater clarification within our organization. Didn't mean to insult anybody. Sorry for the confusion.

Regarding the MAAP pricing; Perhaps I can shed some additional light. Please bear in mind that we have no animosity towards NET dealers. We believe many NET dealers do a great job of providing information and / or product. Certainly one cannot fault the Knife Center for their superb site. And Knife Forum has me talking with you. We understand the effort that goes into such a presentation. Cool your jets.

The scenario went like this; A major catalog offers our new "C99 Gogo" model at a price that is barely over wholesale. An ELU goes into a retail store clutching this catalog and demands that the store match the price or he will buy it through the catalog. The store really cannot afford to match the catalog's price so they stop stocking the item. We have had two models killed in this manner.

Since Spyderco services thousands of dealers directly (we have comparitively few distributors worldwide), we went to them for solutions. Spyderco cannot dictate nor should be able to dictate what a product is sold for. But in an effort to help protect our fellow dealer, MAAP pricing seemed like a way to do this. If it is inconvenient, please accept aour apologiy. If you have a more effective solution that will be more fair for all, we always open to suggestion. Improving and refining is part of our mission statement. Bashing Spyderco is not a solution and creating a solution that only serves yourself is rather uncooperative. You are more knowledgable than the average knife "ELU", share your knowledge. Spyderco has big ears. Thanx for the time.
sal
 
Sal,

I really appreciate the tone of your post! And while we have you here please confirm that the Moran isn't going to be discontinued even though I'm told your firm feels that it may not have fit all that well with the rest of your line.

In all honesty, the issue of cretins approaching some of your storefront dealers with catalog in hand (an obvious reprehensible and boorish behavior) "killing off" two of your models gives me cause for pause. I'm having difficulty making the leap between the effect and stated cause. Did your storefront dealers "network" and as a group decide not to stock these models because of the heavy discounting in one catalog? Was that catalog issued by a Net dealer? By a mailorder firm? By a distributor for use by multiple dealers?

Obviously you infer that these incidents were of such significant impact that you turned to your storefront dealers soliciting a solution which became your MAAP policy. I'm not quibbling about these things having happened. I'm simply trying to fully understand how a few idiot customers could have ultimately killed off product line.

I also want to state that your apparent acknowledgement of the level of expertise and customer service provided by your Net dealers is reassuring. Unquestionably most manufacturers today are struggling with how to properly factor e(lectronic)-commerce into their strategic planning and marketing efforts. They don't want to offend their established dealer network nor can they afford to ignore the exploding InterNET as a viable point of sale medium. Your views on how Spyderco sees these issues would be most welcome.

Best regards,


------------------
-=[Bob]=-

Bald is beautiful! Rub a dome for luck today!


[This message has been edited by bald1 (edited 31 December 1998).]
 
Mr. Glesser,

Thank you for at least talking to us, it's a good start.

I can sorta see the store's point of view with regard cut-rate catalog sales but the truth is, with the exception of Cutco (garbage) this basic problem affects *every* brand of cutlery. Any store that tells you they're cutting off Spydie because they're available cheap from mailorder yet sells Benchmade, Cold Steel or just about anything else is lying through their teeth.

Something else is wrong, they're just looking for an excuse.

Might I offer a suggestion?

Broaden your product line!

By a LOT.

Take a hard look. You've got a huge # of basic 3" through 4" folders and *one* fixed blade. Plus the new kitchen stuff, true, but other companies cover that market with a FAR larger product line. Now compare to Cold Steel's catalog: folders run all the way to 6", FBs run all the way from small to near-insane plus pushdaggers and other weird stuff. In some cases they're the SOLE source for that entire class without going to Pakistani/Taiwanese/Chinese "knife-like objects". Due to recent oddball California law the Cold Steel Vaquero Grande and the 5" Voyager/Gunsite family are big sellers; stores here can't drop CS without losing those pieces totally unique to that company. Other than the Spyderco Civilian you've got nothing "comparably totally unique" to keep stores "pinned" to your brand. Each of these Cold Steel "oddities" may be a niche but they add up fast although true, some fail like the Desperado.

As is, Spyderco could drop off the face of the planet and it wouldn't affect me a bit. Much as I laugh at Lynn Thomson's antics and boastful BS I'd weep a flood if CS vanished; so far they've demonstrated a better combination of "business guts" to produce the weird and "politically incorrect guts" to produce "absolute combat monsters" such to give Dianne Feinstein the weeping runs.

If Spyderco produced a solid megafolder without those @#^&%@$& CS "microserrations" I'd snap it up so fast the local dealer wouldn't even catch a glimpse. And I'd talk about it, and show it off, and more sales would result - ask around here how many people bought a CSVG because of my posts on it, it's place in CA law and modification tips.

As is, stores can replace you with other brands. Avoid that: get *radical*. And do try not to make life as hard as possible on us "net nuts".

Jim March
 
Dear Bob, Thanx for the warm reception. Virgins are always nervous the first time. I'll try to answer your questions. If I get too detailed, shut me up...don't know how deep you guys care to go.
Re: Moran; Spyderco was honored that Mr. Bill Moran would have interest in a collaboration with us. The design was very "mature & refined" and we felt it was worth full bore. The handle requires two molds (hard & soft materials) with special internal pockets to balance the knife as the original. ie; expensive. VG-10 is one of the best steels available in both edge retention and corrosion resistance, also read: expensive. Naturally a Moran should have a "Moran" grind, with a high polish. expensive again. (Please understand that Spyderco operates on fixed margins. We feel that charging the "Customer" as "Much as the customer will bear" is of questionable philosophy. Since the "customer" is the most important part of the equation, that would be akin to "biting the hand that feeds you". Perhaps a little far out, but with sense). Once completed, the model turned out to be very expensive with our normal margins.. The resistance to the high price was too great. Discontinueing the model would be unfair to the custom designer (primarily because we misjudged). We lowered the dealer prices to 0% margin. If you include tooling, it is actually being marketed at a loss. At this time, the Moran is without a doubt the best value for the dollar. We will continue until this production run is over. At that point, you will probably see a slight increase. As the model gains in popularity and more people appreciate the quality and materials, we will ultimately come out OK. The ELU wins, Bill Moran is happy and we're OK with that.

Re: killed models; I'm not sure that I have all of the reasons, as dealers will tell us their conclusions, but not their thought processes. The first model was made as a limited quantity exclusive for a catalog. The model was introduced at half of the suggested retail price. The catalog was quite large and most of the dealers were aware of it. We tried to introduce the model to our dealer base several years later. The main complaint behind the resistance was "How could the retail price double in only two years? We never built that model again (Police Model - titanium handle - ATS-34). The second time it happened a catalog company had the "scoop" on introducing a new Spyderco model. Introduced at 5% over wholesale. Dealers balked and numbers wouldn't support production. At about the same time, the "Knock-offs" appeared. We felt that the ELU really didn't want our model so we discontinued. It is because of numerous ELU and dealer requests that we will re-introduce an updated Merlin next month. Pricing is a very sensitive issue and we don't know all of the answers. We are still learning.

Re: Net dealers: Certainly an asset. Tremendous information souce. We are on, we are watching and learning (as you are). We're flexible. We believe we have the "right" attitudes. The Internet is truly astral projection but it's like shooting a rocket into space...we're not quite sure of where we're going or what will be there. Hope that helps.
Thanx for the help.

sal

 
Jim, I always enjoy your posts, but on this issue I have a totally different perspective. With the exception of their fixed blades I wouldn't miss Cold Steel if Lynn decided to go on a perpetual boar hunt tomorrow. CS makes nothing comparable to the best of Spyderco's folders (Wegner, Herbst, Vielle, Calypso) and their Zytel models are hard workers at a good price. I know you have size issues
smile.gif
, Jim, but the vaquero grande must be an acquired taste. I'm obviously a big fan of Spyderco, but I do have a bit of a problem with Sal's reasoning on retailers. Every industry has discounters and cost-cutters. Just because someone shows up at Sears waving a Wal-Mart ad doesn't mean that Sears will quit carrying coffee makers. If storefronts can't or won't match prices then they need to offer a service to compensate. That can be selection, experience, knowledge, or just plain old customer relations. Sal, if you read the gist of many of the ELU's experiences in these establishments, you'll see that in many of them, besides high prices, not much else is being offered. I will also say that I bought seven knives for Christmas presents this year from Internet dealers. If I was paying MSRP, I would have bought none. Thanks for sharing your views on this with us, Sal. Now let's be getting those Starmates shipped.
smile.gif


Jack
 
Dear jim, thanx for the input. Broaden our product line? and we thought we had too many SKU's. We'll kick it about.

Although not really connected to "pricing policies", you mentioned CS. CS makes good product. I believe I can still call Lynn Thompson a friend and I have a great deal of respect for him becaused he is one of those that truly cares about making a quality product. Our marketing "styles" are very different. Spyderco specializes in "High performance matter separators". We try to speak softly but delivery loudly for a long time. We believe that bigger is not always better and too much attention can be harmful.
In the world of performance; ounce for ounce/ inch for inch or dollar for dollar, I believe Spyderco knives will compete favorably with the world's best. We all have different marketing "Styles" and I personally would miss Lynn's claims and his knives should they be gone. But this is really another topic? We'll kick your input around our "Think tank" thanx again.

sal
 
Sal, I know the "megafolder" market looks pretty niche, but in California we can conceal *any* thumb-push-open folder regardless of size. I've doodled up a design for lockworks strong enough to support a folding KATANA. Did I mention our gun laws suck, making cutlery carry even more appealing?

And we've got a population of 17 million.

Then again...I *have* got odd tastes. Sal, look up an older thread, this forum, titled "IT LIVES! The Outsider (etc)...".

Jim March
 
Okay, I'll admit I was lazy an only now read this whole thread. Now, back to the points I want to make.

Personally, I think that the whole thing about only being able to list MAAP is a poor choise. And the only real way to go is down. To people who want spydie's, they will sell for the exact same price. For people who are looking around, they will see a insane price and a footnote that says Please E-mail for real price. Now, if I saw that I would probably not bother wasteingg my time E-mailing and waiting for a respoce. I would go look at knives that had real prices by them like Kershaw and Columbia River. And all that equals is less $$$ for you and more cash for someone else.

Plus, Jim had a great idea. Do something different
biggrin.gif
. Benchmade made a new lock style(Axis lock) and its all the rage. Kershaw made the new speed safe and now lots of people want them. You desided to make a line of kitchen knives that weren't made of a low end stainless steel and made me one very happy customer. And its not like there are a shortage of ideas out there either. Good carbon steel Fixed blades with something besides a Kraton handle, Mega folders without worthless serrations on them, A multi-tool that you don't have to completely open to get to all the knives and tools. Just to name a few.

Sincerely,
Adam

------------------
"There are 2 kinds of people in life. The ones who don't post on this forum and the ones who are going to heaven" ;)
 
I would personally like to thank Sal for dropping by and clearing up some confusion on their pricing policies.

I had an opportunity to talk with Sal at the last guild show. We actually talked for nearly 1 1/2 hours and much information was shared. I feel Sal is truly trying to make a quality product which will appeal to the masses. A quick trip to Spyderco's home page will show you the many accomplishments this company has provided the knife industry. I don't need to ad to the accommodations which Sal and his highly admired company have so noticeably contributed to the industry.

What is unique here is that the president/owner of a very well known company actually takes the time to answer the questions of a few knife nuts such as us. Like I said before the net is a 2 edged sword. However if used correctly it can be one of the most valuable assets a company has. Benchmade recognizes this and so too should Sal. The simple fact is the net is doubling in size every 100 days and from a marketing standpoint it can not be ignored. Should you do so you could loose your ass very early in the next century. Those companies who choose to can exploit this great new marketing horizon. I have, and I have gained extensive knowledge on manipulating the net to meet my needs. Some companies feel the net is manipulating them as a necessary evil to maintain market share or simply customer perception of a company who is with the times. Those companies will lose their marketing war in short order.

Spyderco's product mix is actually quite extensive when you think of folders alone. No other company that I can think of can even come close to the number of quality folders which Spyderco produces. I do wish they had some models which would give Benchmade a run for the money. Someone needs to compete with BM, and Spyderco is the only company in a position, market share and financial strength wise, to do it.

OK I went on a tangent there so back to the overall point here. Spyderco needs to address the concern of it's customers, all customers from distributor down to the ever important ELU. How do they do this?

Well I will keep this short and to the point and for details I will speak with Sal at the Shot Show should he want to meet again.

You need to satisfy all concerned without breaking pricing laws or offending what may very well be a very good future customer base of net dealers. There is a way to do this and what it involves is simple open communication and perks for recognized/authorized dealers. This is not to say a discount dealer can not be an authorized dealer. Actually quite to the contrary. They can be persuaded to maintain proper profit margins through education. The simple fact is that most, if not all, manufacturers have no clue how to teach their dealers how to sell. They just sell them product and then get up set when certain dealers sell the only way they no how, by price! They teach their salespeople how to sell their product, why not the dealer?

Next year I will unveil a project I have been working on for several years now. You all have seen a few bits and pieces so far. I will let Sal in on the project at the Shot Show if he is willing to meet for a bit.

Till then stay tuned.......

------------------
Best Regards,
Mike Turber
BladeForums Site Owner and Administrator
Do it! Do it right! Do it right NOW!
www.wowinc.com





 
Hello, Sal!

And Happy New Year!

And welcome to the wonderful world of the Web, the newspaper where everybody's letter to the editor gets printed!

And I think this now huge thread, which is branching within itself, shows that Spyderco is an important enough sector of the knife world that it should be the subject of its own forum.


------------------
- JKM
www.chaicutlery.com

 
Bought my first Spyderco in 1986 and my last in 1998. Mr. Sal Glesser almost has made up for the damage that lady did, but not quite!
ELU indeed! If it says "call for price", I'm not interested. Too many other fines knives out there. Kershaw, Buck, etc.
Dane
 
Sal,

Thanks for taking the time to answer my questions. I happen to agree about the Moran being a "steal" right now and that it's original MSRP put most of us off. I personally have now bought 5 of them and have had Scott Evans of Edge-Works create 2 different concealex (kydex type material) sheaths: one a slip for my pocket and the other an ingenious multicarry tactical piece for my naval corpsman son. They have proved to be quite popular. Given the problems with the original kydex sheath that Bob Dozier created for you (Bob makes great stuff but this particular sheath was too difficult to extract the blade from), you might consider checking out these designs for possible bundling when you generate your next production run of Morans. A new sheath would justify a new pricing. I also didn't realize just how labor intensive production was for this model. The information you've shared certainly makes me appreciate them more.

I also appreciate your filling in the blanks on the model killing issue. It makes much more sense now. I actually bought one of the titanium police models from the Cutlery Shoppe but found the individual piece flawed and returned it. It was the only Spyderco knife I ever had a problem with. Stuff like that happens regardless of the best QA systems in place.

You're right about the Net being somewhat overwhelming. But as Mike pointed out in his most recent post, watching the evolution may not be the best way to go. Your involvement here is a big step in the right direction. Small manufacturers like Will Fennell of EDI have found out that having a presence pays off with big dividends.

Mike may be on to something when he suggests offering "perks" or incentives to dealers, be they net or storefront, who demonstrate knowledge and customer service to the end user/buyer. What came to mind when I read his comments was the certifications firearms manufacturers bestow on gunsmiths and gunshops. Even the use of an "authorized Spyderco dealer" certification would make a difference to many of us if it meant that you fully supported them, they got new or limited editions on a first refusal basis, they were committed enough to your product line to make the effort to qualify, that they carried sufficient inventory on hand, that you gave them perks (such as a slight additional non-volume discount or perhaps like auto dealers a 90 day grace period before having to pay for inventory as an incentive to stock and market the wares effectively to avoid the burden of a substantial inventory investment... this in lieu of any shared advertising expense schemes).

To help level the playing field for storefront operations and their admittedly greater overhead, set up a centralized Spyderco web site listing ALL your certified dealers. Folks would be steered to them be they Net or storefront.

One idea that has occurred to me is having a "coop" site where those storefronts without a net presence can "buy in" or earn with certification the capability for online secure orders to be referred to them on a geographic basis. The only hang ups here that I see right off is having real time inventory information available and how pricing would be handled. At any rate my thoughts go to the storefront who for whatever reasons won't independently invest in a web site with hardware, software and maintenance support. A coop approach of some type would seem to be a workable solution that mitigates against the majority of their complaints about the InterNET competition.

Obviously what I've posted is extemporary and not fully developed but I certainly think there are kernals here worth contemplating. Just as Mike's comments about your being in a position to challenge Benchmade should give just cause for pause. He's right in my view.

Again I appreciate your participation here and trust that it will be for the long haul and not just about the recent pricing policy issue. Maybe in the months to come you can clear up things with the real story about the discontinuance of the black coating you had at one time made available on the Endura and Delica models.

Best regards,


------------------
-=[Bob]=-

Bald is beautiful! Rub a dome for luck today!


[This message has been edited by bald1 (edited 31 December 1998).]
 
Sal,


You mentioned that your company had several models killed by the competition between catalog companies and storefont dealers, and it would seem to me that it is not the conflict, but the storefront companies that are killing them, and possibly sales in general. It has been my experience that storefront companies, especially smaller ones, and the giant Mega-Lowe-Mart types, only carry the biggest selling items, things that will leave the shelves in a hurry, and fetch a high profit. It is just the way of the world. Catalog companies that sell over a broad market have a larger spectrum of customers, and can afford to carry knives that are not hot movers.

For example, here in Alaska, I dare you to find a CRKT knife other than the K.I.S.S. folder in a store. You will spend alot of time before you find even a Stiff K.I.S.S. gracing a shelf, much less an S-2, or some other juicy item. I can hit a knife catalog, and POOF! there it is. This goes for specialty items as well. It will be a cold day ing hell before a Chris Reeve Sebenza lands on REI's or Wal-Mart's shelves. The only Spyderco's I see are delicas and some Q's, every once in awhile an Endura. Most of the Spydie's I see people carrying have been ordered from out of state.

What the real kicker is, is that when I order a knife, it costs me almost the same as it would if I bought it from a local dealer. Most of that is because of shipping & handling is outrageous.

I can say, and most of my friend's would agree, if I could get in town, I'd gladly spend the extra 10-15% more than a catalog price, because I don't have to wait those agonizing 2-3 - 10 days till it gets here, and I get to see it before I buy it. But now we are back to the dealer's unwillingness to carry anything cool.

Internet dealers fall into the same catagory as catalog dealers because their market is so broad. They sell alot of knives of all different types to all different people. Shops like KnifeCenter put a HUGE amount of effort into thier sites, and put a great deal of effort into posting information such as specs and materials online, as well as reviews. The amount of effort put in over at KnifeCenter is worth commending, and it is a greater effort than Wal-Mart/K-Mart will ever put into their sales. I have yet to meet a dealer in town that can come close to knowing as much about knives.

The problem with storefront knife dealers is twofold. If it a small company, and I walk in looking for a particular knife, the guy might have heard of it, but tells me "I can order it for you, it'll come in with the next shipment in about two weeks.". If I have to order something, I can order it myself. And with the larger stores, if I come in looking for a particular knife I get "Sorry dude, I have never heard of it..but we have these nice surgical stainless knives over here."

There are very few storefront dealers that I know of that are capable of being knowledgable about their products, and have all of those products on hand, and there are none up here. I can assume that most towns do not have the market to be able to support such stores, and alot of stores that are of such size supplement their income with catalog sales anyways.

Gads, this is getting long..time to split posts......

------------------
Off in search of Knirvana....yek



 
Sal,
It was nice to read your posts, and good to see you out here among your "ELU's".
You have explained your new pricing obviously to your satisfaction, but not necessarily to mine.
I still see it as contempt for the consumer and your desire to manipulate how your product is sold.
I think longivity of a manufacturer translates to the simple manufacturing of a quality product that is desired by consumers.
You make a good product, price it competitively and it will sell.
However, you have to consider how your product compares with other products of similar cost.
The "ELU-MSRP" of your C-36 Military is $199.95. The Calypso Jr. is $99.97.
In the "real world", I can get a Socom for $200 and a REKAT Pioneer for $80.00. Both these knives can be serviced by the "ELU" with readily available tools. Wear the liner lock out and install a new one. This can't be done with the majority of your line.
Accordingly, the options suggested as a comparison to your "ELU-MSRP" are superior.
Returning to the "real world of ELU purchasing power", which is strongly influenced by information and competition, the Military sells for about $125 and the Calypso for $60.
Isn't THAT the value of your knives ?
You can play all the games you want with the dealers and consumers, but the attractiveness and pricing of your product will dictate success of failure.
It sounds, by virtue of your explanation, that your previous marketing problems occurred at the storefront level. Isn't it here where you attempt to adhere more to your MSRP ?
You asked for suggestions. Maybe you and the others in your "think tank" should THINK out of the box you have fallen into.
The books that taught your marketing personnel in college are defunct. The marketplace IS what it IS, regardless of how you wish to manipulate it.
If you have read the other branching threads about storefront marketing personnell and expertise (or lack thereof), you will see that the web is the preferred medium for accurate information, competitive pricing, and desired service.
Bill
 
I'm locking this thread because it's gotten waaaaaaaaaaay too long and needs to be split off. Please feel free to continue the discussion in a new thread.

------------------
Kevin Jon Schlossberg
SysOp and Administrator for BladeForums.com

Insert witty quip here
 
Status
Not open for further replies.
Back
Top