When is everyone okay with copying designs?

[mtangent]

Another way of looking at the Izula clone price differential is in percentages. 1000% is a big difference. Earlier in this head, it was discussed that fake sebenza's under $100 didn't compete with the real deal. This is in the same category, bighill wasn't going to buy a real Izula.

 

[bld522]

But that is not always the motivation to buy a counterfeit. for me image has nothing to do with it. If it did i wouldnt be so open about owning them. If i was. Worried about image i wouldnt want people to know. I can admit my motivation for buying them is selfish. But it has nothing to do with fooling anyone of anything including myself.

I understand. I purchased one clone for myself and image was absolutely the last thing on my mind when I did it. No one will ever see it besides me. But in watching the National Geographic special, image sure seemed to be the primary motivator for people who bought counterfeit high-ticket items. The other big motivator was poor people trying to stretch a dollar as far as they could. There was a segment on a guy who was making fake Tide liquid detergent and selling it for 2/3 less than the original. Lord only knows what chemicals he used in it, but people were buying it up by the bucketfull. Image certainly couldn't have been why those people were buying that crap.

I should know better than to generalize, I suppose. Human nature is complicated.

 

[craytab]

IAnd while Andre Agassi got berated for saying it during a TV commercial, he was absolutely right . . . image really IS everything. If it weren't, counterfeiting would have died out long ago.

Remeber when he came out with his book and it turned out he had fake hair and was addicted to meth? Good times.

Not necessarily. If you love the Sebenza, but can't afford a $400 knife, buying a counterfeit gets you the knife you want without the price. That has nothing to do with image.

Part of the problem is luxury pricing. CRK's pricing isn't based on production costs, which is why the counterfeiters can sell something so similar for 1/8 the price. No one would buy counterfeit Sebenzas if the fakes were $350.

Luxury price structures almost guarantee counterfeiting because of the massive price gap.

Where do you come up with this crap?

CRK is a particularly bad example to bring up. Not going to argue with this fellow over this as it is futile. Plus, there are other folks who have logical things to say about this subject in this very thread.

 

[RX-79G]

Where do you come up with this crap?

Let me ask you a question.. Do you think that the products being produced in China have the same rules, regulations and controls of the US, especially pertaining to environmental standards?

Everyone wants to know why things cost the way that they do, but every one of us wants to be paid a higher price for the time we sell to employers or startup in a business. It's much easier to throw away the labor efforts, skill and investment of others than have your own skills, efforts and investments watered down by an economy half way around the world whom aren't held to the same standards you are.

I'm a business owner that sells what is arguably a luxury item. I chose my retail prices based on target market, not cost of acquisition. That's normal, and your post makes me wonder what sort of business you are in.

Chris Reeve has been praised by the industry for cracking open the premium production knife market. His costs aren't 2 to 3 times any other US maker, or even 8 times a Chinese maker's cost. His knives are $400 on up because the market will bear that. No different than the lady in Brooklyn selling simple farrier rasp knives for damascus prices. Or why a cowhide Gucchi bag costs 10 times what a similarly constructed bag would at JCPenneys.

Luxury pricing is real, not some byproduct of the extreme cost of S35V, titanium and high end CNC equipment. And luxury pricing creates a market vacuum that copies and counterfeiting can do very well in.

Despite proprietary steel and US production, no one seems to question why a Becker BK16 is $60. Do they not have rules and regulations?

 

[RX-79G]

Remeber when he came out with his book and it turned out he had fake hair and was addicted to meth? Good times.





CRK is a particularly bad example to bring up. Not going to argue with this fellow over this as it is futile. Plus, there are other folks who have logical things to say about this subject in this very thread.

Which knives do you want to discuss? How about the US made S30V/G10 Buck Vantage Pro at $70 vs. the US made PM2 in S30V and G10 at $130. The Spyderco is nearly double the street price of the Buck with the same material and labor costs.

Which one is getting counterfeited? The one with the luxury pricing.

 

[bhyde]

I'm a business owner that sells what is arguably a luxury item. I chose my retail prices based on target market, not cost of acquisition. That's normal, and your post makes me wonder what sort of business you are in.

Chris Reeve has been praised by the industry for cracking open the premium production knife market. His costs aren't 2 to 3 times any other US maker, or even 8 times a Chinese maker's cost. His knives are $400 on up because the market will bear that. No different than the lady in Brooklyn selling simple farrier rasp knives for damascus prices. Or why a cowhide Gucchi bag costs 10 times what a similarly constructed bag would at JCPenneys.

Luxury pricing is real, not some byproduct of the extreme cost of S35V, titanium and high end CNC equipment. And luxury pricing creates a market vacuum that copies and counterfeiting can do very well in.

Despite proprietary steel and US production, no one seems to question why a Becker BK16 is $60. Do they not have rules and regulations?

Good,..So you have a product that you sell. Do you have that product made or do you source it? Do you buy equipment and or maintain it? Are there consumables in your business? Are you subjected to hazardous waste remediation? Have employees? If you have employees, do you pay them above minimum wage? Benefits on said employees? (disinclude yourself as an employee)

I am not arguing luxury pricing on knives..ANY knife as for the most part,..most knives are a luxury at any cost.

Do you understand how any of these knives are manufactured? You asked what business I am in..I am a modelmaker toolmaker for a large company. I have over 2 decades,..going on 3 decades of manufacturing experience across many manufacturing processes. Some of the machines I work with and around cost up around $750K.
Would you like to buy such equipment and then give away the fruits of your labor? How about buying CAD/CAM systems that cost $20k/seat. Sound good?
Do you think that all the companies competing with knife makers in the US from China and other countries 1) Pay for this software 2) make their own 3) Use hacked/cracked copies?

I am used to quoting parts, pieces and processes. I have been doing it for many years.

Is this not what you said? "CRK's pricing isn't based on production costs, which is why the counterfeiters can sell something so similar for 1/8 the price."

This statement is what I am commenting on. You seem to think you have in intimate knowledge of what CRK pays to manufacture their products. Please do tell me where you are getting this information from. Being a business owner yourself..You are aware of markup, both direct and from a dealer channel.

As far as your BK16 question, I have comments on how those are made and an idea of what they cost to make, but CRK and BRKT have two different targeted markets and you know it. Sure they follow the same laws and regulations,..but it's apples and oranges comparison.

I probably should just follow Craytab as I think that this will change my mind as much as my questions and comments are likely to change your mind.

 

[B34NS]

Which knives do you want to discuss? How about the US made S30V/G10 Buck Vantage Pro at $70 vs. the US made PM2 in S30V and G10 at $130. The Spyderco is nearly double the street price of the Buck with the same material and labor costs.

Which one is getting counterfeited? The one with the luxury pricing.

That's more it, people don't make copies of carhartt or ben davis, they make copies of vuitton. As long as the appearences of luxury are an indication of social status, and are valued above the quality itself, couterfiets will exist, not because they offer any market value like others above have suggested, Intead like that old PBS show Keeping up Appearences.

 

[RX-79G]

Good,..So you have a product that you sell. Do you have that product made or do you source it? Do you buy equipment and or maintain it? Are there consumables in your business? Are you subjected to hazardous waste remediation? Have employees? If you have employees, do you pay them above minimum wage? Benefits on said employees? (disinclude yourself as an employee)

I am not arguing luxury pricing on knives..ANY knife as for the most part,..most knives are a luxury at any cost.

Do you understand how any of these knives are manufactured? You asked what business I am in..I am a modelmaker toolmaker for a large company. I have over 2 decades,..going on 3 decades of manufacturing experience across many manufacturing processes. Some of the machines I work with and around cost up around $750K.
Would you like to buy such equipment and then give away the fruits of your labor? How about buying CAD/CAM systems that cost $20k/seat. Sound good?
Do you think that all the companies competing with knife makers in the US from China and other countries 1) Pay for this software 2) make their own 3) Use hacked/cracked copies?

I am used to quoting parts, pieces and processes. I have been doing it for many years.

Is this not what you said? "CRK's pricing isn't based on production costs, which is why the counterfeiters can sell something so similar for 1/8 the price."

This statement is what I am commenting on. You seem to think you have in intimate knowledge of what CRK pays to manufacture their products. Please do tell me where you are getting this information from. Being a business owner yourself..You are aware of markup, both direct and from a dealer channel.

As far as your BK16 question, I have comments on how those are made and an idea of what they cost to make, but CRK and BRKT have two different targeted markets and you know it. Sure they follow the same laws and regulations,..but it's apples and oranges comparison.

I probably should just follow Craytab as I think that this will change my mind as much as my questions and comments are likely to change your mind.

Your post suggest that Buck doesn't have production and tooling costs. It also suggests that any company with much higher pricing than average somehow can't maintain equipment or buy stock for what other companies do - regardless of size or output. After all this time in the knife industry, you'd think Chris Reeve could get a better deal on stuff by now.

This isn't the Soviet Union - cost of retail goods is not based on production cost alone. I don't know why that statement should be a surprise to anyone. Premium brand command premium prices. They are also premium brands because they have premium prices. This low output, high reward business model is a good one. Gerber's business model also works. Neither reflect a fixed profit margin or production cost, but an effort to match a price point to the market.

 

[bhyde]

Your post suggest that Buck doesn't have production and tooling costs. It also suggests that any company with much higher pricing than average somehow can't maintain equipment or buy stock for what other companies do - regardless of size or output. After all this time in the knife industry, you'd think Chris Reeve could get a better deal on stuff by now.

This isn't the Soviet Union - cost of retail goods is not based on production cost alone. I don't know why that statement should be a surprise to anyone. Premium brand command premium prices. They are also premium brands because they have premium prices. This low output, high reward business model is a good one. Gerber's business model also works. Neither reflect a fixed profit margin or production cost, but an effort to match a price point to the market.

I see you are purposefully being obtuse and didn't answer any of my questions..

Don't see Buck using the same materials..Do you? You do realize they are both made in the same state, with different market targets.
None of the markets that you speak of are actually competitors to CRK..LOL...Funny how you are grasping for straws.

As far as I am concerned, you have discredited your own arguement.
Also, it was quite clear from the start, you know exactly squat about business and manufacturing and are trolling for effect...Good work hitting my ignore list

 

[RX-79G]

I see you are purposefully being obtuse and didn't answer any of my questions..

Don't see Buck using the same materials..Do you? You do realize they are both made in the same state, with different market targets.
None of the markets that you speak of are actually competitors to CRK..LOL...Funny how you are grasping for straws.

As far as I am concerned, you have discredited your own arguement.
Also, it was quite clear from the start, you know exactly squat about business and manufacturing and are trolling for effect...Good work hitting my ignore list

You clearly didn't read my followup post comparing similar Spyderco and Buck products.

"Discredit." Really?

You're rude, fellow "discussion" forum member.

 

[craytab]

I see you are purposefully being obtuse and didn't answer any of my questions..

Don't see Buck using the same materials..Do you? You do realize they are both made in the same state, with different market targets.
None of the markets that you speak of are actually competitors to CRK..LOL...Funny how you are grasping for straws.

As far as I am concerned, you have discredited your own arguement.
Also, it was quite clear from the start, you know exactly squat about business and manufacturing and are trolling for effect...Good work hitting my ignore list

:thumbup:

 

[RX-79G]

:thumbup:

Why are you approving a message that shows bhyde didn't even read both relevant posts? Because it is snarky? You didn't answer my post about Buck and Spyderco either. Should I tell you you're full of crap and obtuse?


It is very easy to denounce someone on a forum rather than making a thoughtful counter-argument.

 

[Apec]

Don't like copies, don't buy them. Works perfectly fine for me. Though I may make an exception one day, in the rare event the copy is much better made than the original. Haven't really seen that happen too often, if ever at all.

Problems only arise when there are fakes that are being passed off as the real thing.

 

[POCEH KOCEB]

Yep. And just like drugs and prostitution, it's here to stay.
I watched a National Geographic special last night on Counterfeiting. It confirmed my suspicion that most counterfeits are bought on purpose...

It's here to stay? Not necessarily here, in US. Counterfeit is a subject not even near the drugs and prostitution. Most target counterfeit markets for knives are not in the US, the place most of the originals are developed. They are sold in Russia, Eastern Europe and places where the standard of living can't allow most people to pay $400 for Sebenza, and where they don't share the same moral values as here.
Something like the standard behind the below nonsense:

...If you love the Sebenza, but can't afford a $400 knife, buying a counterfeit gets you the knife you want without the price...

Really ? Is it the same knife ?

 

[RX-79G]

Something like the standard behind the below nonsense:
Really ? Is it the same knife ?

Nonsense? Is it really so hard for people to discuss this topic without resorting to insults?


No two CRK made Sebenzas are "the same" from some perspectives. You can use that word lots of ways, and I was using it in the sense that if I handed you a real example and a good counterfeit and asked you if the knives were "the same or different", you'd likely say "the same" until shown otherwise.

If someone wants a Sebenza and has never been able buy one, the counterfeits made of D2 are so close that it is extremely difficult to tell without a real one available to compare. That's pretty darn "the same" to me.


What you seem to be reading into my post was a moral perspective that was never there in the first place. But two real Sebenza's aren't morally the same either if one was stolen and the other purchased.

 

[RevDevil]

I'm a business owner that sells what is arguably a luxury item. I chose my retail prices based on target market, not cost of acquisition. That's normal, and your post makes me wonder what sort of business you are in.

Chris Reeve has been praised by the industry for cracking open the premium production knife market. His costs aren't 2 to 3 times any other US maker, or even 8 times a Chinese maker's cost. His knives are $400 on up because the market will bear that. No different than the lady in Brooklyn selling simple farrier rasp knives for damascus prices. Or why a cowhide Gucchi bag costs 10 times what a similarly constructed bag would at JCPenneys.

Luxury pricing is real, not some byproduct of the extreme cost of S35V, titanium and high end CNC equipment. And luxury pricing creates a market vacuum that copies and counterfeiting can do very well in.

Despite proprietary steel and US production, no one seems to question why a Becker BK16 is $60. Do they not have rules and regulations?

It may have been asked already, I admit I have not read this entire thread as it would end up with my left eye twitching uncontrollably. Have you seen the videos of the CRK shop? He explains in some detail why the price is as high as it is. Also, for about 10-15 years the price stayed the same. He doesn't make 100 different models, everything comes from the one shop in Idaho. There is probably more hand fitting and finishing on a Sebenza than on other manufacturers products. He also pays a living wage to his employees, including health insurance, and PTO. That is not inexpensive by any standards. I'm not saying this is the be all, end all answer; but it makes more sense than the other hypothesis that have been proposed.
A BK16 might be cheaper because there are fewer tolerances involved, the steel is pretty inexpensive to begin with, heat treat requires less time, energy, and precision, grinding it can also be easier (less wear and tear on machines), etc. Again, I'm just guessing. To assume that a person like CR sets the price for what the market can handle just seems a bit too oversimplified and verging on the ignorant as so much has been published as to why things cost what they do. But, people tend to believe whatever suits their specific position and argument. Carry on.

 

[RX-79G]

It may have been asked already, I admit I have not read this entire thread as it would end up with my left eye twitching uncontrollably. Have you seen the videos of the CRK shop? He explains in some detail why the price is as high as it is. Also, for about 10-15 years the price stayed the same. He doesn't make 100 different models, everything comes from the one shop in Idaho. There is probably more hand fitting and finishing on a Sebenza than on other manufacturers products. He also pays a living wage to his employees, including health insurance, and PTO. That is not inexpensive by any standards. I'm not saying this is the be all, end all answer; but it makes more sense than the other hypothesis that have been proposed.
A BK16 might be cheaper because there are fewer tolerances involved, the steel is pretty inexpensive to begin with, heat treat requires less time, energy, and precision, grinding it can also be easier (less wear and tear on machines), etc. Again, I'm just guessing. To assume that a person like CR sets the price for what the market can handle just seems a bit too oversimplified and verging on the ignorant as so much has been published as to why things cost what they do. But, people tend to believe whatever suits their specific position and argument. Carry on.

It may seem "ignorant" to you, but my point was simply that CR didn't do a Quickbooks equation and the number happened to come out to $400. I have no doubt that a Sebenza is an expensive knife to make. Given that it is expensive, the point of making something like it and selling it is not to economize, but to leverage that high production expense into a high profit. If you are competing with $100 knives and expecting the same margin, a $400 knife is an enormous financial risk. Raise the profit margin high enough and that risk becomes worthwhile.

The fact that CRK has kept prices somewhat steady in the face of inflation is just something else that indicates there is some cushion in the profit margin to absorb rising costs.


And since it has been pointed out that CRK is not a good example (for whatever reason), I previously posted two knives that are similar size, first quality, US made S30V, G10 and liner lock type construction from large makers Buck and Spyderco. The Buck sells for 50% of the Spyderco. Is Buck so much more efficient than Spyderco at building this kind of knife, or are Buck and Spyderco setting price points based on market positioning and perception?



BTW, there is no criticism in any of this. I'm glad CRK has a higher profit margin. He's an innovative and hard working guy who deserves prosperity. I'm also glad his employees benefit as well.

Over at Buck, their employees are probably happy to have decent jobs, and make about the same wages as their Spyderco counterparts. I don't think the final selling price of the PM2 and Vantage Pro have much of anything to do with costs or anyone's take home pay. Their prices reflect how the company's want those products - and all their other products - perceived in the market. The downside to that for Spyderco is that upping the profit margin compared to Buck makes them a greater target for counterfeiters - which is the whole point I have been making.

It is one thing to understand the relative manufacturing costs of different processes, but the greatest impacts on retail prices is the sum total of all the things that aren't production. Labor, distribution, advertising, corporate structure, leverage and distribution channels. The cheapest things we buy are unprepared food, cellular service and airline tickets. Those industries operate at tiny profit margins. Clothes and sporting goods are the opposite.

 

[JR88FAN]

I think it's more then just 'how company's want their products perceived in the market' although that is an important aspect of pricing, as there are competitive areas that all companies want a knife in....

I am certain that Spyderco could sell the PM2 for $70.00 and still make a profit, but buck could never sell the Vantage for $130.00 and expect to be competitive or given much consideration at that price point.

Not much separates the two knives in terms of real production cost.

There are intangibles that are very tangible. Spyderco has a stellar and well deserved reputation, and a ton of fans. They can push that price up, and the sales will continue to roll. Buck, not really much in any conversation, deserved or not.

Start a thread on 'best knife for the money' and you will get the PM2 all day.
Spyderco had built a reputation and a following, much like CRK, and because of that, they are much more immune to pricing sensitivity or justification.

 

[RX-79G]

I think it's more then just 'how company's want their products perceived in the market' although that is an important aspect of pricing, as there are competitive areas that all companies want a knife in....

I am certain that Spyderco could sell the PM2 for $70.00 and still make a profit, but buck could never sell the Vantage for $130.00 and expect to be competitive or given much consideration at that price point.

Not much separates the two knives in terms of real production cost.

There are intangibles that are very tangible. Spyderco has a stellar and well deserved reputation, and a ton of fans. They can push that price up, and the sales will continue to roll. Buck, not really much in any conversation, deserved or not.

Start a thread on 'best knife for the money' and you will get the PM2 all day.
Spyderco had built a reputation and a following, much like CRK, and because of that, they are much more immune to pricing sensitivity or justification.

I agree with everything you wrote. You articulated how a company is able to achieve higher profit margins, while I was talking about why they would want to do so. Chicken and the egg.

 

[mtangent]

The fact that CRK has kept prices somewhat steady in the face of inflation is just something else that indicates there is some cushion in the profit margin to absorb rising costs.

That's one explanation.
Another explanation is that sales increased &/or costs decreased over time. Pretty common scenario.