Recommendation? Thinking of becoming a dealer...

Exploiting a niche is the way to go, as FortyTwoBlades FortyTwoBlades and others mentioned. What segments of the market might be poorly represented by a retailer? One that comes to mind for me is multitools. I'm always coming across multitools I didn't know existed. This could also be a market in which you could work with manufacturers to offer small-batch customs.
 
I have the impression from other dealers, that dealing with the makers can also be challenging . In the end if others could do it you can also. You just need a good plan , the energy to make it happy and enough funds to cover you until the business can support itself and you. The last if often underestimated. A good niche always helps as well as a affluent client base. It's hard to make money off the broke.
Internet exposure is a huge plus-some have really taken advantage of this
Just a couple of thoughts.
 
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I cant tell you guys how much I appreciate the honest feedback. This is the kind of stuff I want to use as a decision tool.
 
Definitely a niche market is the way to go. Has worked very well for us. I'd be very hesitant about brick and mortar. Way too much overhead and they are just going away.
 
I think it would be more profitable and easier to use the funds to build an original brand and designs. Join up with a grinder and someone who has a CNC or Waterjet. Get on Instagram.
 
Good day....

If you are interested in getting into the knife business feel free to message me and or give me a call. I gladly will give you any information that you would like. We are a premium brick and mortar as well as an online retailer. We sell on Amazon, Ebay and our own website.
 
Part time to start out, if the business grows enough to let you quit your current job, then do so. If not, all is not lost. Like anything else, you will get out of it what you put in. Think about the income you make now, and determine if you can absorb that income with the new business and what it's going to take to make that happen.
Once you have your own business, it's no longer 40hrs a week, it's more like 80 plus hrs a week.
 
I've been saving for the last 8 years, and in those 8 years, I've become very familiar with the knife industry. My brother has a business management degree from KSU, and my wife has a degree in finance from FHSU. I've been working as a car salesman for 4 years. We have been slowly entertaining the idea of starting a small knife shop dealing primarily in online sales. We're truly in the early discussion stages. We have a decent amount of money saved specifically for a small business. My wife would really only be available for a small part of the day, but my brother and I would be able to work full time. Does anyone have any advice? Good idea? Bad idea? Which brands should I start with? Mods, if this is the wrong place for this, you can move it. Wasnt sure where to post.

A fellow Kansan! This a neat coincidence: my wife earned her bachelors degree at KSU and will earn her masters and teaching license from FHSU in May. Best of luck to you and please keep us posted. I look forward to buying knives from you if you decide to deal.
 
I would strongly recommend against it. There are so many online stores out there that sell knives and the margins are so thin that it would be very hard to compete while earning enough to be worthwhile, let alone profitable.

If you were to become the sole distributor/seller of a particular brand then that might be another story, but that would also be very difficult to achieve with no actual experience and the number of established companies that would be more likely to be the recipient of such a deal.

I would caution against sinking your hard earned savings into such a venture, there is a high probability that you would lose it all. And I honestly don't think you would be able to acquire a loan based on the merits of your proposed business.

The final decision is yours, but I urge you to talk to veterans of the industry as well as successful business people in other fields. I believe the SBA has a consultation or mentoring program that is free, you might want to take a look at signing up for that.

Whatever you choose, I wish you the best of luck!

Edit to add: I think this is my longest post ever, and in it I'm trying to crush someone's dreams :(
 
Being in retail for 40 years - I can echo that your 40 hours will be 80 hours each and every week ... Vacations will be far and few between .
Competition is ruthless and consumers can be unreasonable & always demanding ..

Sorry to seem so negative . Not meaning to rain on your parade but I see start up businesses all the time and it's a tough road to hoe ...most just don't succeed ...
Remember you're not reinventing the wheel your selling a commodity that many ,many others offer

There is a local mom & pop knife store in my area and I'm familiar with their plight - They show a bunch of low end products and the top shelf has Spyderco
and ZT. They lost Benchmade - lack of volume and factory has minimum buy in's .
I discussed the internet options with them and they had tried it but found it just too difficult to compete . As you may know it will need to be a high volume business to turn a profit .

It takes a lot of courage to go and start up a business from scratch ... don't confuse courage with foolishness
Good luck and keep you overhead low - what ever you do !
 
I think it would be tough to get into the knife business now. There are SO many online dealers out there. Finding a Niche is great but how many are there really?

I know there is one online dealer who I can't mention by name here that has the American market on Shiros but no idea if that's paying the bills?

I have a couple retailers I always check first but more times than not, it comes down to price and what's in stock where.

If you pursue this good luck and I wish you the best but, it's not going to be easy I suspect.
 
Being in retail for 40 years - I can echo that your 40 hours will be 80 hours each and every week ... Vacations will be far and few between .
Competition is ruthless and consumers can be unreasonable & always demanding ..

Sorry to seem so negative . Not meaning to rain on your parade but I see start up businesses all the time and it's a tough road to hoe ...most just don't succeed ...
Remember you're not reinventing the wheel your selling a commodity that many ,many others offer

There is a local mom & pop knife store in my area and I'm familiar with their plight - They show a bunch of low end products and the top shelf has Spyderco
and ZT. They lost Benchmade - lack of volume and factory has minimum buy in's .
I discussed the internet options with them and they had tried it but found it just too difficult to compete . As you may know it will need to be a high volume business to turn a profit .

It takes a lot of courage to go and start up a business from scratch ... don't confuse courage with foolishness
Good luck and keep you overhead low - what ever you do !

Many a starry-eye optimist has been chewed up and spit out by the hulking monster of commerce. :p
 
I have been self employed for almost 40 years. I have started 4 businesses, all of them successful, some more than others. Three have been construction companies, one of which has been my source of income for the last 25 years.

Even though with my own efforts (I have only had a job working for someone else for a total of about 5-6 years) I have bought several vehicles, a house, have some tiny investments, etc. All accomplishments that are very modest when compared to my contemporaries. They are retiring with great retirement accounts, some with many hundreds of thousands of dollars in them, paid off homes and plenty of money to travel as they wish, eat out at expensive restaurants when they feel like it, and are looking for "new adventures" for the last years of their lives. They don't worry about the economy and its ups and downs unless it is in context of what it is doing to their investments.

My business takes care of itself. I don't advertise as my referral base is large enough to keep me busy. Still, when the economy tanks (as it did again just a few years ago) people put off everything they could to take care of their houses. And while my repair/maintenance arm paid my bills most of the time, I had no new bathrooms, kitchens or room remodels that make enough money to set some aside.

I do some business consulting, and I have to say that if I was looking at starting a company these days I would hope someone would stop me. Something like a knife is a complete luxury. When the economy tanks, what do you think will happen to your business?

The intangibles that have put my friends out of their multiple businesses throughout the years:

- The should have listened to me (and many others) and put three times the money aside they calculated
- The underestimated how hard it was to drag themselves out of bed every single day regardless of health issues, personal problems, family problems. Remember, no one cares if you get out of bed or not, and even the most motivated person has bad days. That doesn't relieve any self employed of their responsibilities
- They didn't understand quarterly tax deposits, other quarterly reports, and how to interface with the various taxing agencies
- They weren't nearly as good at money management as they thought they were
- They underestimated the toll on personal relationships. Your time is not your own. It gets real when you have to miss family time, miss important family events, miss get togethers with your friends, and then just wind up too tired to do anything other than get by
- They didn't understand how wonderful some clients can be to work with, and others just plain awful. (Would you want to read here "Has he gone out of business????? I emailed him almost 20 minutes ago and have heard nothing... I measured my blade on the new folder and it is almost 4 thousands off center!"). Then, there are clients that will never be happy. There are clients that are dishonest.
- You get no days off. Sick? Who cares? Not your clients. Plus, you don't get paid for sick days. Learn to enjoy the flu while you are working!
- You will find that most people are experts in running businesses (at least in their own mind) and are free with their advice. If they ran a cash register in high school they are customer service experts. If they made sure that the part time cleanup kid swept out the warehouse once a week they are employee management experts. (HINT: Take any advice from a non self employed with a grain of salt.)

You will learn more about yourself than you could ever imagine. Self employment is a life style more than anything else. Unless you are just goofing around with it as a hobby, it is completely consuming.

As far as knives go, this is easy. How many knives would you have to sell to maintain your current lifestyle? If you clientele is BF, then you would probably sell more expensive knives and have a mark up of about 20%. So a $100 knife (an average of about $75 to $175 with regards for selling more $75 models) would put $20 in your pocket. So, if you are used to earning $50K a year, then you would need to sell 2500 knives a year, or 208 knives a month, or 7 knives a day every day right from the start. Workable, except that you now have a web site to keep up with, not a hobby site. Your site must use modules that show your inventory, you need pictures of the knives (some supplied by the manufacturer/distributor) to show your wares, you need to be available for questions, and you have to have a "checkout" module that is secured to a bank in order to accept payment online. That isn't a horrible expense, but it goes on 24/7 including holidays. Oh yeah, you now have to pay ALL of your own Social Security, no contributions from your company. And health insurance? Hope your spouse has a good company policy. Cash flow, inventory management, what to do with a bad quality control batch of knives, and IRS/State/local tax audit (lasting from several hours to several minutes) just become part of your day. Sound like fun yet?

And why ruin your hobby?

I hope you follow up and let us know what you decide. It isn't impossible, but my question is, is it worth it to you?

Robert
 
Going on 7 years in business and still could be one bad month away from losing it all. 80 hour weeks are a minimum. In 7 years I have taken 3 vacations that were longer than 2 days and none that have been longer than 5 days. It takes a lot more than a love for knives to keep it going.
 
subscribed, this seems like a very interesting thread
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Midnight flyer - That sounds about right - I know you still 'candy coated " it .. You mentioned stuff that we take for granted after doing this for so long .
15th of the month payroll taxes due , every 3 months sales taxes due ., insurance audits when ever they choose , workers comp etc.. it seems to never end

Get used to some sleepless nights because even after the long day - the " business" is still running around inside your head !!
 
Going on 7 years in business and still could be one bad month away from losing it all. 80 hour weeks are a minimum. In 7 years I have taken 3 vacations that were longer than 2 days and none that have been longer than 5 days. It takes a lot more than a love for knives to keep it going.

Right there with ya'.
 
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