venting some frustration

M

MJS

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Joined
Jun 10, 1999
Messages
177
gentlemen and fellow dealers attention please.
I have worked my ass off this week. keeping up with the phones and e-mail. i have had a record week as far as sales. not to mention knives traded for.
i would like to extend my deepest gratitude to everyone that has supported me this week.
it would seem that i have talked to every dealer known to man either on the phone or through e-mail. on top of that, i have spoken too, in some way or another what would seem to have been every single member of this illustrious group. Patrick MA,Mike Payne,john ferguson, Roy(hammerhead knives)
my hats off to you fellas. you have treated me as your best friend all week long. Now to the main reason i am here. we have had sort of a silent price war going on all week long in the dealer area. when i say sort of silent i mean all of us that did this, never once mentioned to the other that we were doing it. yet strangely enough we all kept fighting all week. What we stood to gain by this i really have no idea. some of us nearly lost money this week. fact id say at least one of us did. theres things forsale over there for next to nothing over wholesale. now granted serveing this elite group with these price's is more then likely deserved however, can we not all make a decent percentage on things and make the consumer happy with us with out giving it all away.i had a chance to buy ciggarette lighters last week for .2 cents each i would then in turn sell them for .25 now thats a percentage to work with. but as we can see
no one gets rich 1 quarter at a time. so i ask you this why is this going on? are we all that threatened by each others very exsistance that we feel that we have to cut each others throats repeatedly. are we all so close to going under that we have to kill or be killed. i for one am not this destitute
and i really dont thing the rest of you are either. so can we get back to selling quality knives at a quality price. not a price to aggervate another dealer. but a price that supports our family's AND the absolutely wonderful members of BFC. if this is not possible and the war must go on then so be it. but i honestly see no point in it at all. in short i come in peace to ask for a truse nothing more and nothing less.

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Mark-@-MJS
mjsknives.com
knifeman@mjsknives.com
1-800-434-5073
good as the best and better then the rest.


 
Mark,
I realize your post was aimed primarily at your fellow dealers, but I would like to add one thought:
We, the end users, may benefit in the short run from a price war, but in the long run where are we going to be if you and the rest of the fine dealers we've come to depend on can't make a living selling knives? Now I've been as guilty as any about "price shopping" but think about it folks -- any of you want to pay retail? 'Cause that's what'll happen eventually if we only buy from the dealer who's willing to undercut everyone else. I'm not saying that we shouldn't jump on sale items when they come around, but let's support dealers that provide us with great service, not just the lowest price. Fortunately, that's most of the dealers who participate here at BladeForums.

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Dave

Life, Liberty and the Pursuit of More Knives
 
i agree and im in no way asking for us to go full retail. just something better then wholesale. i realize exactly what you are saying. and im hopeing that we can all go about our own way to make a living rather then just followong each other and undercuting each other on the same products.

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Mark-@-MJS
mjsknives.com
knifeman@mjsknives.com
1-800-434-5073
good as the best and better then the rest.


 
Here Here........Thanx to the guys that purchased from me this week.Once again, it boils down to great service & fair pricing. People have still paid my usual asking price on knives. Some of the items could have been purchased in the specials from other dealers at significantly lower prices, and hey, could have gotten free shipping as well, but remained loyal to me....I am grateful for this.........Let the Circus END! Hats off to you Mark, you are a true friend.......

FAIR Prices & GREAT SERVICE shall Prevail!

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Knives & Things
Mike Payne
 
Service is #1. Maybe I wasn't as involved in the price war as much as you other folks as I am new kid on the block and don't banner advertise here, yet. I think we all sell for within a couple dollars of each other and we each have our sales hooks, like maybe throwing in shipping to repeat customers. I didn't know that UPS to Hawaii was $16.80 until I did it the first time
frown.gif
Have only been a dealer for a couple of weeks and if anything have raised my prices from when I started. Before I jumped in the frey, thought I could sell close to wholesale and sell a bunch of knives and it would be easy...but I was way wrong. The expenses mount up when you are making a 40 mile round trip to UPS, buying packing supplies, building inventory, yadda yadda yadda.

Dealers deserve to make a decent living without the nickel and dime price wars. Have told folks that if they are looking for the absolute best price, buy from an individual as someone is always willing to sell for a slight loss. But if it comes time to send a knife back for a problem, might not hurt to have a dealer on your side. How many of us have bought knives from individuals that were advertised NIB and then turned out not to be? Or if you are looking for that special, hot, new, limited edition knife, that relationship you have built with a dealer will help you be the first on the block, in your town, in your state, to own said knife. Have sent customers to other dealers twice in the last week when they wanted a knife that I didn't have but I knew this dealer had, and Patrick send one to me.

Mark, you're cool bro...keep it sharp!

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Chief’s Cutlery and Web Design Specializing in Microtech Knives
 
I don't think that I can say this enough.....

"Folks have loyalities to dealers and makers. If a dealer and or maker is that good - folks will consistently return to do business with them!"

There will be times when someone won't buy from "their" primary dealer(s) or maker(s). That's a fact of life.......and will happen infrequently.... And when they do there is nothing that you can do to prevent that periodic straying.

Stick with the customer service and cut some good deals. That's all that you can do! If you cut deals that prevents you from making a living or cuts so deep that you operate in the "red" on that sell.... Shame - shame - shame!

What I think is happening is that everyone is trying to undercut the "1 Stop Knife Shop. Or visa versa." This in turn is putting you dealers in competition with each other......more than previously..... Most all will sink if this is true!

Business is hell! Unless you corner the market or get rid of the competition....
You guys corner a "huge" portion of the market. Ever think of getting together and collectively lay some ground rules down?

Hell, just my quarters worth......



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GigOne
"Livin' Life - Full Throttle"

~~~~~~~~~~~~~~~~~~~~~~~~~
"I don't suffer from insanity. I enjoy every minute of it."
 
Cost cutting, sales and specials are all part of selling retail. Those of you who have chosen to sell factory knives went in knowing that everyone knows that you receive up to a 50% discount on the knives you sell. Some actually get more than 50%.

Consequently, few if any retailers sell at full price. Nor will few if any consumers pay full price.

Because there are such an abudance of most factory knives (some are limited), customers are encouraged to shop around.

Consistent customer service and fair prices will enoucourage some degree of customer loyality. This however will be short lived if a customer can purchase the same knife for less money.

I don't think there is a simple solution. For those who wish to become knife dealers the first steps for most is via the factory route. Mostly because this is what they can afford.

Their advantage is virtually no overhead and minimal capital expenditure to start up. Their disadvantage is that they do not have the name that you gentlemen do that sell your knives on this forum.

As most of you know I sell custom knives. Most of my knives are sold at the makers retail price, some above, but none below. I chose 5 years ago to stop the "wheeling and dealing" that most custom knife dealers were doing to that point.

Im sure I lost some customers short term. Hoever, long term I have developed a substantial customer base.

I would recommend you look at the same. Sell your knives at a fair price, one that allows you to cover your expenses and make a livable wage (if you do this for a profession). Extend the best customer service you can. Also, understand there will be some other dealers who occasionally have sales.

Specials can only run for so long. These are generally done to raise capital for the next group of knives coming in. Selling off the slow movers in order to free up capital to purchase those that show the promise of quicker sales.

Someone brought up the point of joining forces. This may be a good idea for purchases, a CO-OP of sorts. Im sure if you place a big enough order with the factories that you get better service, first offering of new knives and perhaps a better discount.

This will give you a competitive advantage that the smaller factory dealers will not be able to match. This will then force them to do one of two things.

Spend more money on advertising and inventory to comepete (thus eliminating so many sales).
The second would be they find a new product to sell.

However, as long as retail exsists there will always be someone who will view your "high" price as their competitive advantage. Generally, these individuals do not have a well thought out business and marketing plan. For the most part their presence will be short-lived.

Good Luck



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Les Robertson
www.robertsoncustomcutlery.com

"Nobody throws me my own guns and tells me to run, nobody!
 
Good post Mark. The factory knife sales have gotten so ridiculous that as a new small dealer I am not even bothering to advertise on the forum. I will stick to working shows and making sales calls where my service and knowledge can make a difference with the customer.

Les makes some very good points too.

I do like helping out the guys on the Forums with knives needed (or wanted
smile.gif
) and will certainly have a banner here as soon as I can work out a few things I have "in the works" which incidentally DO NOT involve low balling my fellow dealers on prices.

I'm glad you posted this Mark. I started wondering if I was the only one noticing the price wars! Perhaps all of the dealers should consider taking advantage of the SALES at a certain dealer where he is obviously taking a loss on items and help him lose some money. I can always sell those items at shows and make some profit! Just a thought...

Kevin
 
Just a quick input from a buyer/trader/collector point of view. Most of the people I deal with have one or more of the following three things going for them and that is why I deal with them.
1. Trust-I know the product is as stated
2. Service-I can count on them to provide it in both directions.
3. A Niche in the market-A unique product I can't get anywhere else.

There will always be price *****s in the market place and if your only means of being competitive is price, you will perish.

Develope Trust, provide great Service, and find a unique product and you will succeed.

("You guys corner a "huge" portion of the market. Ever think of getting together and collectively lay some ground rules down?")

Gig-Just the fact that this was implied and stated in writing here could have very serious ramifacations. Even though it may not have been meant that way, it could be construed as an attempt to price fix. A
co-op as Les stated is a viable alternative, however this statement could be held up to Anti-trust scrutiny.
Rs
Don


 
Originally posted by Les Robertson:
Those of you who have chosen to sell factory knives went in knowing that everyone knows that you receive up to a 50% discount on the knives you sell. Some actually get more than 50%.
Click to expand...

Les,

Disagree with your 50% discount statement. It maybe true for $2 imported knives but not for high quality factory knives. I only sell Microtech knives, and with Microtech's new pricing structure, the markup on thier knives is more like 20%-$25% at MSRP and actual selling price is less. MSRP on a HALO III is $373, and if you can buy them for $186.50, tell me where so I can order about 100. If you were a certified MT dealer and had access to their confidential price lists you would know better. After figuring in shipping at least one and probably both ways and discounting the knife slightly below MSRP, average profit on a $330+ knife drops to more like $30-$40 or 10%. I'm not complaining, just want to clear up the facts on higher quality factory knives.

Is markup on custom knifes about 20%? If you don't discount them as stated in your post, your profit margin is about twice what mine is, percentage wise. Additionally, custom knives cost more which results in you making you a larger $ amount per knife sold. Not saying you don't earn it, I greatly respect your knowledge of handmade knives.

Sincerely,
John

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Chief’s Cutlery and Web Design Specializing in Microtech Knives

[This message has been edited by Chief (edited 03-18-2000).]
 
As usual Les hit the nail on the head again.

I used to actively sell firearms. Other people would get an FFL and order from the same distributors I did from their kitchen counter and then undercut my INFLATED price. Everyone ended up in price war and, the people without deep pockets starved out (literally, they couldn't feed themselves or their families).

In the end, the number of dealers decreased drastically and, the laws and public policy regarding firearms changed and now, much higher prices prevail. At some point prices will get so high, new dealers will return to take advantage of the inflated prices but, until then, consumers are loosing out because they didn't support the people who supported them with fair prices and good service.

Stay Sharp,
Sid
 
The dealers here not only provide us with sharp toys, they give us their experience, insight, and recommendations. And, sure, you guys have to sell knives, but you're also one of us or I doubt that you'd be in this business. I think most of us understand that you are in an unenviable position of trying to compete with the entity that is also your medium for survival.


There is nothing illegal or sinister about co-ops. This is done in many industries and businesses. The price isn't the issue. The cost to the dealer is. If you have a large player in the field, he can get quantity discounts with some suppliers. The little guy can't do that, so his profit is less. If a group of little guys get together to purchase an item, they all share in the quantity discount. Maybe not even at the same level on each item, or brand. They can each price at whatever level they need. In the end, even if the selling price doesn't drop much, the playing field is more even, and stable. And low prices are meaningless to me if nothing is in stock and nobody's home.

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Dave
------------------------
If a tree falls in the forest, and there is nobody there to hear it, why worry about it?
 
I am a knife Customer so maybe I shouldn't be posting this. But I thought I would share my reaction to reading this discussion of the economics of the knife market.

I buy mostly custom knives. I have never ordered a knife of my specifications directly from a maker. I buy them directly from makers at knife shows for the maker's price. I never haggle. The price either makes sense for That particular knife, or Not.

I have also bought several knives from Larry Connelly, Nordic Knives, and Les Robertson. I have always received the value I expected for the price I paid. I don't know what the price mark-up is on a handmade knife purchased from these dealers. I assume that the maker and the dealer made a transaction that rewarded the maker for his time, effort, skill, and artistry.

When I buy a knife from a dealer, I assume that the dealer is making a profit on the deal. How much really doesn't matter to me. The knife is either worth That price to me, or it's not.

It is my experience that what Les says is True. He sells his knives at or near the makers price. This seems to also be true at other custom knife retailers. So obviously the maker is giving a price break to the custom dealer. But he receives exposure (advertising, marketing) by selling the knife through an internet custom knife dealer. LOTS of folks are going to see the knife. That helps build and sustain demand for a maker's knives. And That is worth something.

As for me, when I buy a knife from anybody, the knife is either worth the asking price, or Not. How I decide what a knife is worth to me is too complicated to explain. I don't often think rationally when buying knives.

When I buy production pieces three or four times a year, I do usually look around for the lowest price I can find. But I am also shopping for service and reliability. So I have often paid more than the 'lowest' price because I wanted to trade with a dealer I knew I could trust. There is more to life than 'the bottom line'.

I have recently made arrangements to buy two production knives from a well known dealer in the forums. I have not yet asked what the price will be. I assume that it will be fair. I trust this dealer because I have been reading what he has said about himself, his beliefs, and his knives. I know he is a person I want to do business with.

Best of luck to All of you knife dealers. It sounds like a very tough and competive market. I am glad to be just a customer.

Paracelsus, buyer
(edited because I am a bad speeler)

[This message has been edited by Paracelsus (edited 03-18-2000).]
 
This is a rough one guys with no easy answers and as an outside observer I knew this had to come to a head sooner or later. I never wanted to see any of you dealers to cut off your nose to spite your face, and was hoping this price war would come to an end before there were too many casualties. I'm moving to customs, and don't spend enough on production knives to support BF's and all the good people here that deserve my business. I can't say I don't shop by price, I have to. As an Example what happened this week is I saw an item from one of the posters here at a great price, I wasn't considering buying one until I saw it. Who is going to get my busines? Do I want to see him lose money on the deal? Not really. Will I think of him first on my next production knife? You bet, and I'll buy even if it's a couple of dollars over someone else. Why? Because I don't forget a favor. I hope there is enough business here for you all to prosper. I guess that's the real question?
 
John,

Sometime back I was offered a distributorship of Microtech Knives. The discount offered was 50%.

In order to get this discount you had to buy a substantial dollar amount of knives. It was several thousand dollars initally and followed up with a multi-thousand dollar order each time.

So John, if you want to get that big discount you need to talk with MT about becoming a distributor.

This is why I was talking about forming a co-op, which doesnt violate any anti-trust laws. Unless you use it to fix prices and drive out healthy competiton.

I don't think the feds will be looking at the knife industry for Anti-Trust and RICCO Statue violations any time soon. <G>.



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Les Robertson
www.robertsoncustomcutlery.com

"Nobody throws me my own guns and tells me to run, nobody!
 
Originally posted by Chief:
Les,Disagree with your 50% discount statement. It maybe true for $2 imported knives but not for high quality factory knives.
Click to expand...

I've had distributor catalogs from Moteng, NKDI, and Blue Ridge, and the vast majority of factory knives - from Benchmade to Spyderco to Cold Steel, etc... - have had dealer prices that were 50% of MSRP. Microtech did have a higher dealer cost - 65% of MSRP - but I don't know whether this still holds true with their new pricing policies. But most manufacturers do indeed have a dealer cost that's 50% of MSRP.

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Kelly

SenatorsPlace.com
AKTI Member #A000289

Deo Vindice


 
likewise brother!

you were right there next to me for the ensuing verbal exchanges we endured while we tried to voice our views on priciples.

i think we know who we are when i say there are a number of us who will step up to the plate when "doing the right thing" calls us to do so.

we are competitors, and also comrades in this knife arena. i can count on these folks to to play fair and "fight a clean fight".

we offer many similar products, but also products exclusive to each organization.

customers have the fortune to find which one of us are best tailored for their needs, and in may cases there is a healthy cross dealer purchasing and exchange.

we can and have operated, where everyone benefits, most of all the customer; who are the most important part of the equation.
smile.gif


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PATRICK YORK MA
TRIPLE AUGHT DESIGN
"Audaces Fortuna Iuvat"
Click to expand...
www.tripleaughtdesign.com
Your edged tool & extreme gear resource for professionals, adventurers and enthusiasts.
velox@slip.net


 
Originally posted by Les Robertson:
Sometime back I was offered a distributorship of Microtech Knives. The discount offered was 50%.

In order to get this discount you had to buy a substantial dollar amount of knives. It was several thousand dollars initally and followed up with a multi-thousand dollar order each time.

So John, if you want to get that big discount you need to talk with MT about becoming a distributor.
Click to expand...

Ok, I'm confused. First, I understood you to say that dealers got their knives at a 50% discount. When I challenged that, you then say distributors get their knives at 50% discount. Of course distributor price is less than dealer price, distributors have markup as well. FWIW, I have the capital to buy several thousand dollars worth at a time and I do just that. I can buy from MT directly, but they sell to dealers at the same dealer cost that a MT distributor sells for. To undercut their distributors would be unethical. Do you think that companies should let every dealer be a distributor too?

Here is the way I see it really working. Example is Company X selling knife Y. Knife Y has an MSRP of $400. It only costs company X $50 to make this knife. They sell it to a distributor Z for $200. He sells it to a dealer XXX for $300. Dealer XXX has to be competitive and discounts $400 knife to $350. I guess you are saying every dealer XXX should be able to buy it at distributor price just because they want to buy knives cheaper? What happens to the distributors in this example?

If you had a chance to become a MT distributor, buy their products for 50% off MSRP and turned it down, in my opinion, that was a big error in judgement. You could be reaping in huge dollars with a profit margin like 50% when the rest of us are humpin to make 20% and less. Microtech has significantly revised their prices and I doubt if even distributors are getting 50% discounts today.

V/R
John
 
John,

Im not here to debate what factory discounts are given or not given.

I don't know, I havent even owned a factory knife since 1987.

I was trying to suggest proven business practices, such as using a CO-OP or buying in "bulk" to reduce the cost per item in regards to inventory.

If you are unhappy with the current price you are paying. Contact your seller and ask how you can increase your discount.

If you cannot meet those requirements, then at this point you must settle for your position in current market.

The nice thing about working for yourself is that you can directly affect your position in your market.

Best of Luck



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Les Robertson
www.robertsoncustomcutlery.com

"Nobody throws me my own guns and tells me to run, nobody!
 
That is all good advice Les. You are right, after all I am buying thousands of dollars worth of product, time to negotiate some. Thanks!
 
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