Why are they so expencive???

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Oct 2, 2004
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There is a very interesting thread going on right now over a China made knife and it made me wonder for the millionth time about the high cost of some of the knives that are popular right now.

After spending 30 years in the machine trade, after a five year aprentice program as a machinist I look at the whole knife thing with a critical eye. All of the new style knives, like the tactical stuff, is made on CNC machines, put together with alen or torx screws. There is almost no handwork needed and the entire design of these knives are for easy, cheap production. It should be, in therory, cheaper to make a Benchmade whatever than a Camillus scout knife or stockman.

There are no skilled cutlers setting rivits, crinking the blades so they nest right, fitting handle scales and bolsters, and adjusting the kick, as in a traditional pocket knife. The new stuff comes off the machine, gets deburred and degreesed, goes to assembly and you have a knife in a fraction of the time.

Now I'm not trying to be a smart a-- or such, I'm just an old fart that does not understand the whole square point tactical thing. But I do understand manufacture costs, and production. Heck I spent my life in manufacture, and what I see in the knife world today is that 2 plus 2 in not adding up to 4.

As I type this I have my son's tactical folder here. With his permission I took it down and had very little parts. One single blade, a piviot pin, two liners, two handle scales, some torx screws, a piece of formed sheet metal for a "liner lock", and a couple of spacers. It took me all of a couple of minutes to put it all back together into a knife. On the inside surfaces I could see enough to tell you just what kind of machine they were made on and how.

On the other hand I have here a made in U.S.A. Buck stockman. With three blades, two backsprings, four bolsters, two handle scales, two piviot pins, and a couple of brass spacers it is a far more complex knife to build, and it even has a decent satin polish. The tactical knife I have here is bead blasted and tumbled for Pete's sake. The Buck goes for 35.00$ and this other thing, also made here is well over a hundred bucks.

Somebody is getting ripped off!

Why is a simple to manufacture single blade screwed together knife more expencive than a nice trapper from Queen, or a very nice stockman with real stag no less, from Eye Brand?
 
I guess the answer would be Marketing 101. Because the market will bear the price. Why do some cars cost $ 100K, wines $ 100+/bottle. I have some $25 cigars (though the largest Cigar distributor in the world, Lew Rothman says " the difference between a $5 cigar and a $25 cigar....is $20 (and I would tend to agree)).

Manufacturing costs only go into the equation in determining the low end of the wholesale price point.

Marketing creates a certain "snob" appeal to everything and the public laps it up.

This forum is probably comprised of most individuals with varying degrees of Obsessive Compulsive Disorder (yours truly certainly is in that bunch). Knives are a passion and an obsession (may be one and the same but I'm not s "shrink"). When people develop a passion for acquiring a certain type of thing, the tendency is to keep working your way up the ladder and to some extent that means price. That's why most successful manufacturers, of any product, understand price points and offer a multitude of products to fit into any price points. It is not necessarily reflective of their manufacturing costs.

I always thought that $ 5 would get you a good knife. Then the obsession started and well as the knowledge (gleaned through this forum) that helped me to understnd the differences in knives. I have probably developed a bit of the snob thing as well, but I generally tend to buy knives in the $ 75 to
$ 125 range. Are they better than the $ 5 knife? Certainly they are but 25X better, I don't think so.

I've blathered long enough.
 
Materials
Labor
Payroll taxes
Equipment
Equipment maintainance
Rent
Utilities
Packaging
Marketing
Copyrights
Patents
R&D
QC
CS

And probably a bunch of other stuff I'm not thinking.

Then of course, there's those abstract concepts of "supply and demand" and "profit".

When it comes to your cheap chinese made crap, materials and labor costs are minimal, copyrights, patents, and R&D don't apply because they're usually ripping off another design, and QC and CS are non-existant.

Even if the materials cost difference is only a few bucks, it's far more expensive to make a Spyderco Military in Golden, Colorado than it is to make a knockoff in China. But you get a far better knife.
 
jackknife said:
After spending 30 years in the machine trade, after a five year aprentice program as a machinist I look at the whole knife thing with a critical eye. All of the new style knives, like the tactical stuff, is made on CNC machines, put together with alen or torx screws. There is almost no handwork needed and the entire design of these knives are for easy, cheap production. It should be, in therory, cheaper to make a Benchmade whatever than a Camillus scout knife or stockman.

For having 30 years in the trade, you don't seem to understand the economics of it.

First, the CNC machine costs a substantial fraction of a million dollars. Most companies can't buy them for cash, so they finance them which means interest. So, all of that cost has to be amortized over the number of pieces made.
When cutting quality steel, titanium, etc., the tools used by those CNC machines wear out quickly. So, if a $50 tool can make 10 knives, you have to add $5 to the cost of each knife to pay for the tool.

CNC, by its stock-removal nature, is inefficient and results in considerable waste. The cost of the waste has to added to the knife.

And then there's the cost of tooling design and programming. As a machinest, you mount a piece of metal into the machine and press the button and the machine runs and makes the part. But how does the machine know how to make the part? The answer is programming. Even a fairly simple part can require days of programming and development and debugging before it's ready for you to press the button. The cost of that work has to be ammortized over the knives made.

But how does the CNC programmer know what to program? This brings us to the product designer, typically a degreed mechanical engineer. Today's knives are considerably more complex in their design using more sophisticated techniques. They also have to be designed within the process capabilities of the facilities that will make them. Solid modeling using sophisticated CAD software is a given. A seat of Solidworks software with all the necessary options is upwards of $10,000 and runs on a $3000 workstation. There's $13,0000 more that has to be ammortized. Solid modeling is a slow, detailed process. Working out the technical details of the knife takes simulation and prototyping and all of that costs time and money.

But how does the Product Designer know what to productize? That now brings in the Industrial Designer, another well-paid professional.

And etc.
 
Well I tend to agree with the first poster. I would think a high quality lock back knife would tend to cost more than a tactical folder. I mean I look at my Sebbie and it is an extremely well engineered piece of work. I look at my Case lockback or my Buck lock back and to me it seems to take more skill in assembly for the latter that it does the former. Market not with standing. It is a puzzle to say the least. keepem sharp
 
Something is only worth what someone is willing to pay for it. A lot of it is overblown hype for sure but $100 is about what $20 used to be value wise. These days three small bags of groceries is $100 so it only stands to reason that a knife is going to be somewhere in between to slightly higher the way I see it. I make knives and the handmades are quite highly priced. It is hard to find a decent truly handmade knife these days as a lot of the makers are using the same machinery that production companies use.

I rather like the truly hand made knives personally. By that I mean done by hand from the ground up, where the original knife was designed on paper by hand, not by a cad computer program. Then, cut out by hand, fitted, and shaped and built and put together by hand without fancy tools or gadgets to make life easier; much the way the likes of Bill Scagel made them. The old blacksmith type knives and hand forged knives still appeal to me over and above the machine made ones, but those days are fast becoming extinct as we progress in the age of technology. I make mine that way though so at least one maker is still around doing things the old way. If technology fell through the floor tomorrow I could still make my knives. About the only improvements I have made are adding the neat little screws that you can buy now compared to when I first started doing them. Used to be I made my own rivets and pins but the little screws do help make things better without taking away the hand action.
 
I think I'd have to ask why traditionally made and styled pocket knives are so expensive. After all any laborer in china or wherever can produce a traditional pocket knifes using poor steels poor F&F and no modern design.

$35 for a traditional pockt knife? China can sell them here for a $1! You want a higher level of F&F then it's $2

Someone is getting ripped off.
 
I think the argument can be made that companies who make traditional pocket knives in America probably run on leaner margins than ones who make tactical folders. Primarily due to the increased cost of labor and the number of times the product has to be touched by hand, not to mention the change in buying habits of the American consumer driving demand down.

Evidence of this can be seen in what happened to Schrade and the changes Case is making to some of their lines. Both companies have/had struggled to gain a foothold in the more tactical market while not alienating their traditional base.

The big difference as mentioned is that a company like Case or Queen is using in many cases pre WWI machinery that has long been paid for where the modern manufacturer has much higher equipment costs which also require higher paid/educated employees.

The cost of materials is also less on a slip than on a tactical, so I think in the end it washes out on the production side, however; since demand is so much higher for tacticals they are able to produce more, lowering production costs, which is the opposite for traditional knives.

I don't think the tactical makers like Benchmade/Spyderco are gouging anyone, but I do bet they make more on a single knife sale by percentage than say Queen or Case.

I would also bet that Spyderco makes much higher margins on foreign made knives than on their American made line, otherwise why import at all?
 
Good points:) Something else that might play into this as well that potentially could drive the price up - "market window". In other words, you spend all these millions into R & D, manufacturing, etc. and have to recover a certain portion of your costs, before the market dries up on you. If you have a limited market with a limited amount of time, the end product typically will probably cost more than a product that has a long product life cycle with a larger market i.e. Buck 110, SAKs. I work in a software development environment and this is something we face in our market place constantly - you spend 2 to 3 years preparing to produce a product that may have a life cycle of 1 to 2 years maybe less - only real way to get around it for us is to try to "leap frog" technologies/software and hit alternate windows. In the meantime, you have to charge more to recover costs and keep the lights on. We are very lucky in that we have a strong market presence in what we do. Compared to say something like the games software environment, our market place tends to be slightly slower moving.

My $0.02CDN - gord
 
China has changed the meaning and definition of the word 'value' for a lot of folks in this country, but it didn't start there. It started in Japan, then Taiwan, and now China. In the end I have always believed you get what you pay for. USA made products cost more because USA resisdents have a higher sense of self worth IMO. Americans expect more for their products because they feel it is better and the people buying it pay more because they feel it is better also but it is also because we have a whole different standard of living here. Case closed. Whether or not a USA product is better for whatever reason is debateable but truth has little to do with feelings and/or loyalty. When I was young a $2 Barlow would have been an expensive knife. A $35 knife was out of the question. That would be enough to get a good fight going over finances at home. My how times have changed.

The advent of FRN and molds to produce them changed things somewhat and I know from posts by Sal of Spyderco knives that these molds are quite expensive to produce and create. That is why they are used for so long and sometimes for more than one model.
 
I applaud the first poster for starting this thread, not necessarily because he may or not be right, but because once in a while we need "old hands" like him to make us look back at the REAL value of most things of life in general---not just in knives.
 
One more thing to consider...

I would not be surprised if the knife makers are "subsidizing" the price of their slip-joints with the profits of their "tacticals".

Camillus can probably artificially lower the cost of their slip-joints (like the scout knife) by increasing the profit margin on their CUDA Darrell Ralph knives.

The auto makers do this all the time:
GM can offer the Cavalier for a low price because they charge so much for their Caddys.
There is'nt much actual monetary difference between the cost of putting together a Cavalier and putting together a Caddy.

Allen.
 
I couldn't agree with you more jackknife. I've wondered this for some time now.

I would bet that Benchmade makes a HUGE profit on every knife they make. I bet Spyderco makes less profit but still a good amount. I would bet you can make a $100 Benchmade for about $50-$60 max.

untamed said:
I applaud the first poster for starting this thread, not necessarily because he may or not be right, but because once in a while we need "old hands" like him to make us look back at the REAL value of most things of life in general---not just in knives.

Also a very good point.
 
Okay, some of you have made some good points about R&D and other stuff I know nothing about. Not being the sharpest knife in the drawer, I see only what my own experiance is in the manufacturing field. And that is the guy on the bottom floor standing in front of a mill or lathe. Sort of like the guy down in the engine room wondering whats going on topside.

Our engineers where on the second floor and durring my time I saw the change from honest to gosh blueprints, to drawings, to CAD-CAM technology that came in toward the end of my career. But that is part of my skeptic attatude. I saw the demise of the old engineering and model work. At the end of my time in the shop the engineer on the second floor worked up the model in the CAD computer, sent it down to the terminal by the CNC mill, we ran a first part for inspection and test, and then started production of the part. I saw production time cut in half from the days of take the blueprint, make a model, back to engineering to corect mistakes, another model, then production.

Today, with the engineers and the machinists on the same computer the development to production time is way down. Therefor costs should be way down. With CNC mills running at 10,000 rpm and faster, doing a dozen operations at a time cost of parts are sometimes pennies apiece.

I just can't see how a single blade knife made with this kind of high speed technology, can be many times more expencive than a folder with three or more blades. A sak hiker has three layers of backsprings, seven blades, four spacers, three piviot pins and other parts. Switzerland is a modern nation with a high standard of living, not a third world country, and they make thousands of these things a day and ship them to the other side of the earth and sell them for 25-30 dollars.

I have a feeling that things have gotten a little out of wack someplace along the line. One of the guys here said maybe part of it is snob appeal, maybe I just don't feel like paying for the prestige of getting less knife for more money. But maybe I'm just too old a dog to learn new tricks. But then I remember getting a new gun and you took such pleasure in the way the blued steel and walnut met in a fine fit. Now you get a hunk of black plastic and aluminum that looks like something out of Buck Rodgers. But thats another old man's gripe and I won't go there now.
 
Keep in mind human nature. People will willingly buy a 50$ ten-pound bag of beach sand when it is put next to a 2$ ten-pound bag of beach sand because they think its somehow better.

Im not saying that these companies are doing this, but we are talking about, for the most part, a much broader and diverse customer market than the small cross section of people here, who tend to know what quality is, what to look for, machining process, etc.

People pay 500$ for white cotten dress shirts that no human hands have touched, so i think the issue is less about companies ripping buyers off in this case, and more about their behaving like a business. Maybe they could sell em for 10$ each and still make a tiny profit, but assuming they will willingly turn a smaller profit just to be nice guys goes against everything that a business is about.
 
Jack Knife I think you are over simplifing things. The labor intensive part of a pocket knife is grinding the blade and fitting the lock both of which I think take about 2 years experience to master. But bottom line is what people will pay for the newest, coolest knife. Classic economic theory states there is no relationship between cost and price. If I can make a knife for $5 and sell it to people who will pay me $500 (and willingly they would), is that a bad thing? My fav is the large Sebenza. I think that it's reasonable to say that the tight tolerances that are on CRK knives are not easy to obtain. People are free to buy what they what and perceived value is as variable as there are people. I think that CRK products are a bargain. It's amazing the close fit between the the blade and the handle. Mostly I think you get what you pay for.
 
Jackknife, I am just happy you started a thread with some meaning. Not an old drawn out thread about which knife is better, or wore yet a Sebenza or Strider thread. Good reading here. I don't know much about manufacturing, so I can say I am learning something.
 
jackknife said:
A sak hiker has three layers of backsprings, seven blades, four spacers, three piviot pins and other parts. Switzerland is a modern nation with a high standard of living, not a third world country, and they make thousands of these things a day and ship them to the other side of the earth and sell them for 25-30 dollars.

Well, you brought up a few very good points:
1.) Bulk. Because Vic is selling so many knives, producing so many knives, that they can make them a whole lot cheaper. There is a big difference between making 50000 pieces and making 1000 pieces in a typical run. Simply because of the deal with Walmart the Native price dropped by about $10!

2.) How are the parts of a SAK actually made? They are blanked by stamping if I am not mistaken and that includes the blades aswell. Not all materials can be blanked by stamping and depends also on material thickness. Precisely the reason why the typical SAK will not have a 4 mm thick ATS-34 blade with a distal taper. On some Spyderco models not even the liners can be stamped. And G-10, Mircarta and CF require milling and grinding instead of moulding. I would assume that the assembly of the parts is the least of the cost in either case.
 
Gollnick said:
When cutting quality steel, titanium, etc., the tools used by those CNC machines wear out quickly. So, if a $50 tool can make 10 knives, you have to add $5 to the cost of each knife to pay for the tool.

This implies that tacticals are "higher quality" than slipjionts. Queen for example uses D2 which is very difficult to machine, more so than many of the stainless steels in tacticals costing much more.

CNC, by its stock-removal nature, is inefficient and results in considerable waste. The cost of the waste has to added to the knife.

Just consider this independently of the arguement here. You are selling CNC machines, your presentation is basically a huge list of reasons why the manufacturer will have to *raise* prices if he switches because of the huge increase in cost.

Tacticals have a higher price point because they can sell there, there are a multitude of example of the exact same knife (materials/design) selling at widely different price points simple because of name. Compare the price of the Alias vs Buck Mayo/Benchmade Skirmish.

-Cliff
 
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