What are local knife shops thinking?

00ChevyScott

00ChevyScott

Basic Member
Joined
Dec 3, 2010
Messages
2,678
I went to a knife shop today, and saw a knife which sells for $210 online, priced at $400.... Also, many other $100-150 knives priced at $200-300. I honestly don't understand how they actually sell anything and stay in business. I understand you need to make a profit, but we're talking about prices that are 50-100% over online pricing. This is a huge shop, which has got to be getting good dealer prices. As an avid knife buyer/user/collector, I'd be more than happy to spend $5-10 more at a local business to help them stay in business, but when it gets into the $20-200 markup range, I quickly turn into a "I'm just looking" customer. I'd figure if they sold 3-5 knives at the prices they charge, they could easily sell to 4-5x as many people if they brought their prices down to a reasonable amount. Right now you're looking at product that sits on shelves for years.

TL;DR, why do most local knife shops feel they need to make 100% profit on the knives they sell?
 
Last edited:
Were they being sold MSRP or above that?
 
rycen said:
Were they being sold MSRP or above that?
Click to expand...

Looking now, the knives I can remember pricing for look to be right at MSRP pricing. The Spyderco Lionspy was actually priced higher than the Lionsteel SR-1s they had.
 
They often have a great deal more overhead than online dealers. Employees are usually the single biggest expense of a retail establishment and the ability to operate with fewer people on the clock gives online dealers a huge advantage. You also need more space in a higher traffic area, utility costs are greater, etc. That's one of the reasons some manufacturers have gone with MAP policies, to help support brick and mortar stores. I still try to support local cutlery shops, but the only real one I know of is about an hour away. The others have been put out of business.
 
But how does raising the price help them any? They're pricing themselves out of the market. Shouldn't they be more concerned with getting more customers in the door? High prices do the opposite of that. You can increase a price some to make up for extra costs, but once things get to a certain point, you're pricing your customers out of the nicer knives and limiting them to the cheaper knives (which are also priced incredibly high like a $60 Spyderco Tenacious).
 
I think it would be difficult to run a brick & mortar knife shop. I imagine people come in to "test drive" then go home and order online.

Closest thing to a knife shop for me is a Dick's Sporting Goods: a 1/2 aisle full of clam packaged blah. It's either that or the mixed bag you find at the occasional gun show.
 
They know knife knuts are savvy and they shop around. They are trying to hook the uniformed on an impulse buy. "If it costs that much, it must be worth that much."
 
dogstar said:
They know knife knuts are savvy and they shop around. They are trying to hook the uniformed on an impulse buy. "If it costs that much, it must be worth that much."
Click to expand...

Then why carry the nicer knives that only knife knuts go for? Another local knife shop (albeit a lot smaller) carries Benchmade, Spyderco, ZT, and Emerson. Every time I go into the shop and talk to the owner, the same knives are on the shelf. I always ask him about knives we talk about non-stop here, but he claims he can't sell them because they're too expensive. He sells mostly Mtech, Gerber, SOG, Kershaw, CRKT, etc. So why bother investing in the higher end knives if they don't sell? And then when they don't sell, the prices just get increased even more to try to break even? It doesn't make any sense to me. Like I said earlier, they're pricing themselves out of the market. I know it must be extremely difficult to compete with online retailers, but that's the nature of a free market. But a local brick and mortar shop has the advantage of the "right here, right now" selling point. Which is why I said earlier, I'd be happy to pay the $5-10 more to see the knife in person and put it right into my pocket. Storing the knives isn't expensive as most knives are relatively small and can be stacked/stored easily. The initial investment of buying the knives and staffing the store are the most expensive part, but increasing the volume of sales should fix that problem.
 
Did you ask if they could bring the price down? I've gotten a few deals on MAP controlled knives and was able to buy them for cheaper.

I bought a BM 940 at a brick and mortar for only a couple of dollars more than it would have cost to buy one online. I figured it was worth the few dollars to "have it right now."
 
Cynic2701 said:
Did you ask if they could bring the price down? I've gotten a few deals on MAP controlled knives and was able to buy them for cheaper.

I bought a BM 940 at a brick and mortar for only a couple of dollars more than it would have cost to buy one online. I figured it was worth the few dollars to "have it right now."
Click to expand...

I didn't ask this time as they didn't have the particular knife I was looking for, but I want to say I asked last time and they guy said they were pretty firm on prices. I did ask the owner of the smaller knife shop about his prices and he didn't seem very reluctant to drop his prices any, although his weren't quite as inflated.
 
Look at it this way, if their business plan wasn't working they'd go out of business. Enough people must be paying their prices otherwise they wouldn't be in business.

Why would people pay higher prices at a local store? Well, the term "pig in a poke" comes to mind. Maybe people like being able to handle and inspect the actuall knife they're going to buy before buying it rather than taking the gamble of ordering one online, discovering it has flaws, then having to go through the hassle of sending it back for warranty work. I don't know how many times I've read on this forum about people REPEATEDLY sending a particular knife back for warranty work because the manufacturer couldn't get it right.

And of course, some people don't want to wait on shipping or pay a high shipping charge for express delivery. Some people are willing to pay extra for immediate gratification. Ever order a knife you really wanted, wait every day being tourtured by anticipation, only to have something go wrong in the shipping process? Like maybe your knife gets lost or stolen or sent to the wrong place? Internet purchasing is far from perfect.

And of course some people feel a certain amount of loyalty to a local shop that treats them well and lets them spend hours fondling different knives, even when they're not planning on buying that day. Some people like good customer service and dealing face-to-face with the people they are buying from. Personally, if a local shop owners were cool and treated me right, and let me get my fingerprints all over their knives without ever trying to pressure me into buying something, I'd feel like a scumbag if I just USED them to check knives out and then went home and ordered the same knives online.
 
00ChevyScott said:
But how does raising the price help them any? They're pricing themselves out of the market. Shouldn't they be more concerned with getting more customers in the door? High prices do the opposite of that. You can increase a price some to make up for extra costs, but once things get to a certain point, you're pricing your customers out of the nicer knives and limiting them to the cheaper knives (which are also priced incredibly high like a $60 Spyderco Tenacious).
Click to expand...

Often they simply can't drop the prices much lower without ending up taking a loss on the item. They are not only paying for the knife, but also for the person selling it to you, the storefront you're buying from, etc. Because it's a niche market already, dropping prices may increase your traffic somewhat, but probably not a huge amount. You can live with much smaller profit margins as an online dealer than you can with a storefront to maintain. If you're going to bother stocking a product, it has to be worth your time to sell it and prices reflect that. There's also the issue that many, many online dealers of anything make up some of their profit on shipping. $7.95 is a pretty stabdard shipping charge for even a small folder, but shipping rarely costs that much. That helps them keep prices lower as well.
 
Your question is an age (age of the internet) old question. Lots of shops, and not just knife shops are nothing more than "touch and feel and see" locations for savvy internet shoppers. Look at the brick and mortar book stores. Most have closed up due to Amazon and others. I have carried my Kindle into such stores and looked at a book, and then use the stores supplied wi fi to go on line and order the same book for less direct from Amazon, and had it on my Kindle ready to read in less than a minute. I have also researched other items from physical stores and gone home and ordered on line and saved lots of money even after shipping and usually no sales tax to boot.

That is the age we are living in. The best a store like this can hope for is the impulse buyer or someone without the ability or knowledge to get the same on line for much less to want their stock bad enough to pay their prices and walk out of the store with it in hand.

For a brick and mortar store to realistically make a profit, there is a lot of overhead involved to consider in their pricing. Rent, Utilities, payroll, advertising, permits, cost of inventory and or money tied up and not earning interest, or paying interest on borrowed money, insurance, accounting expense, taxes, etc, etc........

I am glad I am no longer in that squirrel cage myself. Retail business is tough today. Even a service type business like i had is tough to make any money if you are a Mom/Pop type operation. I support local businesses where I can, but I have to stretch my $'s where I can since I am on a fixed income. Some people don't have to do that and I say great for them. YMMV.

Omar
:rolleyes:
 
But online dealers also pay rent, utilities, employees, taxes and lots of other expenses a brick and mortar store does. I can understand a little increased in price is understandable, but up to and over 100% is rediculous no matter what business you're trying to run.
 
00ChevyScott said:
But online dealers also pay rent, utilities, employees, taxes and lots of other expenses a brick and mortar store does. I can understand a little increased in price is understandable, but up to and over 100% is rediculous no matter what business you're trying to run.
Click to expand...

An internet store obviously has to pay rent, but there is a big difference with paying rent on a warehouse versus paying rent on an desirable location with a storefront. You can be in the middle of nowhere and still sell your product with just an internet store.
 
I was at a local shop and noticed the same thing. I can see charging 10-15% over internet pricing, but 30-40% or more is just fleecing in my book. On "impulse" we bought two knives, which I knew I was spending more for, but when I got home I saw that I overspent $150. To me, that is just ridiculous. I brought one of the knives back, the other was a gift. I won't be buying knives from that shop anymore, but I will probably go there to handle there knives before I buy online. To tell the truth if there prices were reasonable, I probably would buy all my knives from them because, as a collector, I would like to check-out the knives before I buy. So they caught me once in overpaying, and I won't make that mistake again. Doesn't sound like a good business model in my book!
 
Lonewolf01 said:
An internet store obviously has to pay rent, but there is a big difference with paying rent on a warehouse versus paying rent on an desirable location with a storefront. You can be in the middle of nowhere and still sell your product with just an internet store.
Click to expand...

Or even in your garage...

Omar
:rolleyes:
 
I am very lucky in that I live near the small brick and mortar storefront of an internet vendor. The knife shop has been there for many years before the internet presence and the prices are below or the same as what I see online, with no postage.

The store is run by the owner and his wife and occasionally one other employee. They are great people. If I buy a few things I can usually look around for one of his used knives in lesser condition and he will throw it in.

Can I say the vendor's name? Can I please? Huh, can I?
 
00ChevyScott said:
But online dealers also pay rent, utilities, employees, taxes and lots of other expenses a brick and mortar store does. I can understand a little increased in price is understandable, but up to and over 100% is rediculous no matter what business you're trying to run.
Click to expand...

Many online dealerships are one or two man operations. More than a few are run out of someones residence rather than a commercial storefront. As you pointed out earlier, unless you're handling vast quantities of inventory you may not even need to rent storage space. And that's not even going into the advantages of drop shipping operations. There's also the distinct advantage that you don't need anyone on the clock to stay open 24/7. And even online dealers with all those advantages still aren't raking in money hand-over-fist. Brick and mortar stores just can't compete with that.
 
One of the booths at the local gunshow sell Spydercos at MSRP or higher as well as Basic Lego Strider SMF's for $675, gunner Grips are $800.
 
You must log in or register to reply here.
Back
Top