Sticker shock an annoying trend.

[PURPLEDC]

Well I read this whole thread and just want to throw my .02 into the mix.

In regards to ZT with their limited editions I think the price hike is actually pretty fair. I think they saw the crazy prices their LEs were fetching and basically wanted more of the profit to go to them instead of secondary market sellers. I personally think this is totally justified, I would rather pay a markup to the people making the item I like than some flipper just trying to make a quick buck.

Spyderco I think might be testing the waters. The high end knife market seems to be pretty huge right now, with a lot of people willing to spend a lot of money. Guys like Brous and Medford have proven this. Spyderco is a company, and companies are always trying to maximize profit, that's just business, I don't begrudge them. Overall they make great products at all different price points, so if they want to try out the higher end stuff and see if sticks, I'm not opposed. Now if we start to see price increases across the board on their products (like benchmade for example) well then I will probably stop buying from them.

Perhaps we are at a transitioning period in the knife industry. I can't say for sure but, I would imagine that this industry is bigger than it ever has been. Companies know there is a lot of money to be made, so they're trying to carve out their piece. I think we need to play it by ear as consumers, if you feel a knife is overpriced, or the quality of a brand is no longer there, then vote with your wallet and don't buy it. Prices will eventually normalize as they always do, and that sometimes means an overall increase, its just how these things work. Or its also possible that we are in a bubble phase and headed towards a collapse (I'm referring solely to knife market), god knows we've seen enough of that in recent years. Only time will tell.

I personally would rather not pay a markup at all. For me If I was making knives and i saw dealers selling them for 3-4 times my MSRP I would also stop selling to the dealers for gouging customers. But I would not mistake the desperation that some customers would succumb to when paying that much for my product with my product actually now being worth that much money. And since I would be eliminating the middle man and no longer need to sell at dealer cost I would still be increasing my profit margins if I sold the knives direct to customers at the prices the honest dealers would sell for. That would have been a win win. The customers are guaranteed the best price by default and the manufacturer would actually make more money than had they sold them to dealers. Dont get me wrong, I understand why they are doing it. If you figure that they increased their profit by $100 by cutting out the middleman on each knife and they only produced about 200 knives you are talking about $20,000 they pocketed on that run of knives since they didnt have to sell them to dealers. I just think at the very least they could have offered a coupon code or maybe even a buy our expensive knife and get this lower cost knife that isnt selling well for free. Something to show that the customer still matters. Because from where I am sitting and not having any real insider information? When a company cuts out the dealers and sells direct to the consumer but at MSRP? The only conclusion I come to is greed. I dont want to feel that way but it is what it is.

 

[bodog]

I bet a production company can make a knife for about 50 bucks. Less if the equipment is already paid off. Throw in some composite blades and I bet the price raises by about 10 bucks. Now, I bet marketing and whatnot raises that by about 5 bucks per knife. I bet warranty issues cost another 10 to 20 bucks per knife. So I'm betting it costs less than 100 bucks to produce a mass manufactured knife that gets sold for 500. I'm betting higher quality but non-limited edition knives churned out by the thousands cost about 30 to 40 bucks, final production costs are probably about 60 bucks, and sold for 200. And my estimates for the cost of production are probably generous. I bet they actually cost more like 20 bucks and get sold for 200.

 

[stabman]

I bet a production company can make a knife for about 50 bucks. Less if the equipment is already paid off. Throw in some composite blades and I bet the price raises by about 10 bucks. Now, I bet marketing and whatnot raises that by about 5 bucks per knife. I bet warranty issues cost another 10 to 20 bucks per knife. So I'm betting it costs less than 100 bucks to produce a mass manufactured knife that gets sold for 500. I'm betting higher quality but non-limited edition knives churned out by the thousands cost about 30 to 40 bucks, final production costs are probably about 60 bucks, and sold for 200. And my estimates for the cost of production are probably generous. I bet they actually cost more like 20 bucks and get sold for 200.

You're forgetting about:
-Wages
-Renting or leasing the building
-Insurances

Plus some other stuff.

A fun exercise is to price out the materials yourself for what you'd need to make the knife. ALL the materials, including fasteners, pivots, etc.
Then figure out how long the process takes, and what price you have to sell for to make more than minimum wage per hour profit-wise, taking into consideration all the other costs.

 

[RedLynx]

That renting the building can kill you.

Awhile ago a new place came to the food court at the mall, out of curiosity my aunt asked them how much this little square of space cost them. It was thousands of dollars a month. A fairly huge amount not factoring in paying employees, food, deliveries, equipment. And it was not a very big space at all. Sadly they weren't able to turn a profit and had to leave. I think it was mostly the rental/leasing prices.

 

[stabman]

That renting the building can kill you.

Yep.
Even in a place with low prices like Windsor, it can still kill a business.
I had been looking into opening a used book store some years back, and I was trying to figure out the amount of sales needed to keep afloat...it didn't look feasible.

Seeing as a number of established used book stores then went out of business, I was probably right...thing is, they still had some customers even.

It's easy to look at price of materials and add an arbitrary profit margin figure and decide that we're all getting ripped off---and sometimes we are---but a lot of the time there's a whole bunch of other annoying business expenses we aren't taking into consideration.

Of course I did see where at an eyeglass shop my ex-wife worked at, they took $10 of stock they had, and with about 30 minutes of work made a pair of eyeglasses they sold for $400. So yeah, sometimes the perceived rip-off is real.

 

[RedLynx]

I'm a pretty big fan of used book stores and bookstores in general. Very much enjoy the atmosphere.

 

[stabman]

I'm a pretty big fan of used book stores and bookstores in general. Very much enjoy the atmosphere.

Me too, which is why I though opening one would be great.
But it seems they aren't as in demand these days, especially with e-books often being about the same price (or cheaper)...and people often just download books for free, which makes it even harder.

 

[bodog]

A successful company will have what, at least a 200% markup at least. The profit made should be at least what the product cost to make. Make a knife for 50 bucks, the final profit should be at least 50 bucks. There's 100 bucks. The other 100 bucks goes towards logistics. That's for a 200 dollar knife. Sell 20,000 knives with those numbers and see if you can afford rent. Anything extra is just icing on the cake. That's where limited editions and hyping them come into play. The profit is a little less but it builds demand for the real profit makers. It's just business. If you think a majority of these companies care about much more than the bottom dollar, you're crazy. It's about you buying something from them that puts their kids into college. The more generations you can put into college, the better you've done. Who cares about how much you think they care about you. If they can keep getting you to buy because you think they care about you, then they've won. That's just business. Stop caring about them any more than they care about you. They provide a service, you purchase the service. Loyalty should only go that far, that is, unless the people running the company shows his face and solicits your opinion because he truly wants to know what YOU specifically want. Then you can be as loyal to him as what he is to you.

Look no further than the gangsters speech in A Bronx Tale when he schools the boy about having loyalty to a sports team. That speech says it all. They don't care about you unless you stop paying them. They care about your money only. That's it.

 

[stabman]

They care about your money only. That's it.

Well yeah, obviously.
Same as when I have a job; I go there for the money.
Businesses and jobs are about making money...I thought everyone knew that.

 

[goldie]

Liability insurance and medical must be real tough for any of these knife companies, not to mention the cost of the machinery.

 

[bodog]

Well yeah, obviously.
Same as when I have a job; I go there for the money.
Businesses and jobs are about making money...I thought everyone knew that.

Well, some people don't. They care far more about the companies than the companies care about them.

 

[Charlie Mike]

I sold a Rolex Submariner to buy a Darrel Ralph custom.

 

[RedLynx]

Well, some people don't. They care far more about the companies than the companies care about them.

True, and being a "company man" with some loyalty is still valued. But everyone--everyone--goes where the money is, if for no other reason than they must. No one is not in it for the money, although doing something you genuinely enjoy helps.

I've been on other forums where company owners talked as though they were running charities, doing their employees some great favor by paying them a living wage to feed their families, as if it was so amazing. All I could think was "what you want, a cookie?"

 

[RedLynx]

Me too, which is why I though opening one would be great.
But it seems they aren't as in demand these days, especially with e-books often being about the same price (or cheaper)...and people often just download books for free, which makes it even harder.

While I will always love and value paper books, I can't deny the value and convenience of an e-reader I received as a gift. Part of why I like it is, it allows me to have a huge book collection that isn't a hassle to box up if I move, etc. I still have a bookshelf full of the real deal, but those e-readers sure are handy.

 

[B34NS]

More often then not lately I see big name companies giving us less and less for more and more. Just recently I saw the spydie rubicon and got excited. Great looking knife and a flipper! I was all set to buy it then I saw the price and did a double take. I assumed that at the very least it would be a TI framelock. Nope liner lock. So what's the deal how can a liner lock justify $319 on one of the big knife sites. Is there something special I'm missing or what? Even the TI framelocks are becoming ridiculous. Quite honestly I believe knife companies are seeing mid tech makers like brous and medford getting away with big prices and they're just jacking up their own because they feel they can. Meanwhile I see companies like boker and Kizer putting out ti framelocks that are 90% of the knife and 1/3 the cost. With more Chinese manufacturers being able to produce quality I think this ubble is bound to pop. Keep in mind I'm talking about original Chinese designs. Not the damn clones. But what do you guys think? personally I feel like companies are getting pretty greedy and will continue to unless we decide to vote with our Wallets and say enough is enough. Production knives and even midterms are not customs and shouldn't command these kind of prices. I'm very willing to spend the cash if I can see where it's going. But I just don't see it on these ultra expensive production knives. Thoughts?

I think with such a small scale gold rush in effect has created a whacky market to say the least. Every maker is just about as varried as it's consumer. I think the bigger question is if this market is headed to a period of economic sustainability. Right now it seems the price tag is what's selling the knife, and who's selling it more than the knife itself. There's a lot of very fine finished tool steel knives with fancy handles for well over material cost. Other factors like overhead, are things smaller busniness have to contend with. The price is less an obvious descriptor if a product is "quality" or not anymore, it's been broken down into vertical business models to "suit everyones needs". It wasn't always this way, and won't always be this way, but you have to look at small business econimics to get a better picture as to what's really at play here.

 

[goldie]

So I see it gets more insane by the day. Theres a Crusader forge apex on the bay if anyone wants to buy a 4700.00 box cutter.........

 

[jill jackson]

I remember when gas first started to go above 2 and 3 dollars, it wasn't long before everything else started to go up as well. Fuel charges to ship everything made it a lot more costly, so everything in the stores rose right along with fuel. To the point a bag of dog food went from 16 dollars a bag to now over 30 for less weight at that. (I use dog food as an example because I was buying the same brand back then as now) So, we should see everything start to go down now, along with fuel the same as it all rose along with fuel? (I wouldn't bet on it)

 

[skyhorse]

I could get by fine with nothinng more than a Victorinox Farmer and Mora fixed blade if I had to.

 

[goldie]

^ The way these makers are pricing their knives, I agree, with your sound choices.Its really getting out of control,but that Apex knife is the topper.And the seller claims its all you need.Its the most useless blade shape ive ever seen unless your slicing letters and boxes open....

 

[ToddM]

There are still great buys out there in the knife world, but yes I'd agree there is a trend among a lot of production knives creeping up in cost, I'm guessing they are testing the waters more and more in the $300+ range. However, you can hardly blame them, look at what we've seen for the last couple years in both limited editions and "mid-techs" it's obvious many people have no quarrel about plopping down $500+ for a mass production knife that sees no real custom hand fit/finish. We've seen limited edition production knives go over $1000. It's easy to see why companies would believe they can increase prices in that atmosphere.

I really think we are seeing a paradigm shift, knives are becoming more of a fashion accessory and less of a tool for many, just like watches. Look at how many overbuilt tactical knives with blade thicknesses and grind angles that are a horrible choice for 99% of their owners daily cutting tasks.

It's not just knives, many EDC tools that used to be utilitarian are taking on a life of their own at very high prices. Tactical pens at $200+, little Ti pry bars over $100, $60 forks, $150 utility blade holders, $150 copper lanyard beads, $300+ lanyard beads with designs, $150 for G10 handle slabs, etc. etc.