The Cost of Materials?

D

Droppoints

Joined
Oct 10, 2003
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There is something in the commercial knife business that puzzles me. How much does the choice of steel contribute to the manufacturing cost (not sales price) of a moderate size knife, say a 3" folder or 4" straight blade? I'm not talking about exotics like Talonite or even S30V, just good quality materials like 440C, 154CM and ATS34.

The reason I ask is that I don't understand why some big name makers use fairly low grade steel in knives that sell for high to premium prices. CRKT, Buck and Cold Steel are the major makers that come to mind. They use AUS6 or even 420HC in knives selling for upward (often WAY upward) of $50, If K-Bar can use AUS8 in a descent quality lockback that sells for less than $20, why can't, or won't, the others use something at least that good?
 
One reason is how many steps in the supply chain to the end user.

For example let's take a Cold Steel folder. Let's say it's made for CS by someone and it costs the original maker $5, CS pays $10 for it, then sells it to a dstributer for $20, the distributor sells it to a retail place for $40.

Let's say they use a nicer steel and now it's:

$7 -> $14 -> $28 -> $56 as the final retail price.

Anyway that's my theory.

And I will have to agree with you, the $20 K-Bar makes me think many other knives of similar quality are overpriced.
 
I believe the choice of steel has a lot to do with manufacturing cost, a blade from steel that can be bought in rolls, stamped out, machined easy, not wear down abrasive belts and simple to temper should cost a lot less to make than one that has to be laser cut, machined harder, wears down abrasive belts and requires complex tempering techniques.
 
Don Luis said:
I believe the choice of steel has a lot to do with manufacturing cost, a blade from steel that can be bought in rolls, stamped out, machined easy, not wear down abrasive belts and simple to temper should cost a lot less to make than one that has to be laser cut, machined harder, wears down abrasive belts and requires complex tempering techniques.
Click to expand...

I agree with all of that but the knives I'm using as examples are relatively high priced. The price should permit the use of better steel. Certainly other makers use higher quality steel and their knives aren't any more expensive.

Cheap knives from cheap steel I understand. Expensive knives from cheap steel I don't understand.
 
It's called getting the most profit margin that you can get for your product.

Value is in the eye of the beholder.
 
The materials from which a knife is made represent about 10% of the manufacturing cost. Labor, overhead, advertising etc etc are the other 90%. At least that's what one manufacturer tells me. The cost of steel is a relatively small portion of the manufacturing cost - or at least changes in steel would be a fairly small percentage of the total.

Once you get beyond a few thousand serious knife knuts such as those of you who frequent these forums, people don't have a clue about the properties of knife blade steel and don't care. It would be more important for a blade to be rust resistant than hard for the very great majority of people who buy a knife. Steels like 154CM, as an example, are barely stainless not really stainless if you know what I mean.

I think CRKT, Gerber, Buck and others that sell primarily to the general public use the steels that are appropriate for the general public. Chris Reeve, Extrema Ratio, Swamp Rat and such companies, on the other hand, are unknown to the general public. They use the materials that appeal to the knife knuts who have a different set of criteria.

I don't think it's any more complicated than that.
 
I think you have to look at the knife as a whole. For example, the CRKT Mo Skeeter is a frn handled lockback like the Kabar Dozier, and they run around the same price. Something with separate liners, scales, a lock that may need a bit more work to match to a blade for decent performance, and more screws that need to be installed by hand to put it all together will raise the cost of production.
 
Droppoints said:
I agree with all of that but the knives I'm using as examples are relatively high priced. The price should permit the use of better steel. Certainly other makers use higher quality steel and their knives aren't any more expensive.

Cheap knives from cheap steel I understand. Expensive knives from cheap steel I don't understand.
Click to expand...

You are right, for example, I don´t understand why Spyderco makes the frn handled Delica in VG10 and the steel handled Delica in AUS6, why not both in VG10 ?.
 
Don,

I am guessing here but, if those two models are manufactured in different locations geographically it could have to do with the availability of steels in those regions. Shipping is a very large expense. Maybe AUS6 can be acquired with substantially less shipping costs to the manufacture site than VG-10. Or I could just be completely wrong, but it sounds plausible.

Jon
 
When you compare prices, you have to be careful to use a reasonable street price. A company may seem to be asking a lot, say, on their website, but the cost to a buyer who shops around will be much more reasonable.

Knife Outlet is right about the different markets a company might sell to, but sometimes the company gets it wrong. Look at Cold Steel going to 420 and finding the low end market still wasn't there and the high end market wouldn't touch it. They've changed some big knives from the new 420 to good old Carbon V.
 
Esav, Cold Steel has always designed for the high end of the market. Remember their first products were those Japanese well made Japanese tantos. They've been trying to find a home at the low end over the past couple of years. I don't think it happens that fast. Also I think the low end is probably lower than Cold Steel intended to go. I see it as the "collections" of cheap Chinese knives they sell on the TV shopping shows.

I agree with you that they would do better improving and expanding the high end of their line. I still think the Tai Pan Dagger is one of the nicest fixed blade knives available. I've owned one since 1997. It's still in the line. Today we received an order for an Imperial Katana and that's certainly not an inexpensive blade. So they still have the high end. You just need to separate the wheat from the chaff.
 
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