Why do makers charge the prices they do?

Were you referring to my post, Les? If so, here's my reply. If not, ignore this lame post.

Original Topic for this thread:

Topic: Why do makers charge the prices they do?

Did I read the question wrong? Is this an open forum for all to enjoy, or your private clubhouse where you set the rules and if we don't follow them we can't play?

I thought I ansewered the question, Les. That's all I intended to do. Why the 'Flame On' reply? A knifemaker isn't necessarily a good business man. I'll ante up to that fact. I suck at business. But, I can learn. You dismissing me for answering a direct question isn't going to help matters, Les. I had hoped to add something. I'm beginning to think that's not possible in your forum.


If you already know the answer to the question, why ask?
 
Max you bring up a great point. Should a new maker eexspect to make a profit on every knife they make? I wonder if a new maker should even expect to make a profit?
 
Thanks db. You're right, profit is something to look forward to. Profit isn't the biggest motivation in my knife making, as I've told Les once before. A good profit is a good goal to set. But, the makers who expect a good profit right off the bat probably aren't being too honest with themselves. That is, unless you have all your bases covered like Les. Sounds like he really has it going on.

I just don't plan to be a slave to the system he subscribes to. All business, no instinct. All money, no fun. Not for me. I drive my business. It's not the other way around. At least, that's how it is right now. Maybe someday, when I've sold millions of dollars worth of knives, I can lose the keys to my Porsche 911 too.

We all have our own way of doing things. No one way is right. Giving each other respect enough to enjoy that freedom is what keeps the world sane. But that's just me.
 
I don't think it matters how a knifemaker figures his prices. Isn't it the market that will finally determines the selling price?
A person can figure by the hour or whatever method they choose but if the price isn't right the knife isn't going to sell.
The demand has to be there. Demand is set for a lot of reasons one of which is hype, another marketing, fad, etc. How long can a knife sell when it's only hype and a fanatical following driving it? Possibly a very long time if you use Hartsfield as a example. Some knifemakers can exploit hype very effectively. Some do it in a manner that annoys a lot of people here and a war usually starts.
In regards to other things said; If Les is driving a porsche it's my thoughts that he's driving it's because of an understanding of the demand, hype etc. that drives the market in which he makes his living.

 
Great answer Max I would much rather do business with someone who cares more about the product than someoe who cares more about the price/profit. And for those of you who think I will not buy a hi priced knife I sure will if I beleive the maker cares first and far most about the knife, and not how much he can make off of it.
 
Guys,

First I do not drive a Porsche. I am married with two daughters. I have a Suburban, as it would appear that when I take my daughters to school that half of the other parents have them as well. SUV's and Mini-Van's rule in my world. They are not bad for taking my knives to knife shows either!

Max,

I was in no way, shape or Form tyring to flame anyone with my post.

My intent was to point out, as it always has been, that makers can make better quality knives, at a better price, increasing their satisfaction with their work, their profit margin and their customer satisfaction.

This can be accomplished by using sound business practices. My initial goal in getting my MBA was to allow me to get my foot in the door of corporations after I left the Army.

What I learned was how to run a business. This allowed me to change the way I had conducted my business prior to this. Allowing me to not have to have to get a "real job".

By applying the lessons I learned in business school and incorporating the entreprenurial information that is out there. I have progressed from being just a custom knife dealer.

I don't merely buy and re-sell custom knives, I make an impact on the market. Starting with the LDC line of custom knives and then introducing the Vanguard Series. These knives have been regularly featured over the last 3 1/2 years in Blade, Tactical Knives, American Handgunner and the Knife Annual's. There will be another article in the next issue of Tactical Knives and other articles will be in different magazines next year.
It wasn't an accident, it wasn't luck, it was planned.

Obviously money is important to all of us to one degree or another. Money is not my motivation, if it was, I would not be a custom knife dealer. My main motivation is to provide the very best value in custom knives to my clients. Also, to constantly create ideas for new knives.

I have a business plan and an inclusive marketing plan that gets updated about every 6 months. I try to plan 3-5 years into the future.

I try to employ the best technology has to offer, both in dealing with the day to day operation of my business (I average 52 phone calls and almost 300 emails a day) and in the way I get knives from my sketch pad to my web site or tables at shows.

Max, unlike you and just about every other maker I know and all the other custom knife dealers. I will give my clients full value for a knife they purchase from me if they wish to apply it to a more expensive knife that I am selling.

My idea has always been that quality knives should hold their value, and with me they do.
This is because I sell quality knives at a fair price and stand behind them 100%.

So while your goal is to produce the very best knife you can (as it should be). My goal is to sell the very best knife that meets my clients needs.

As with you and I, for most of my customers, the money is really a secondary thing. For it was always about the money. They would still be buying and using factory knvies.

Pride in ownership cannot be overlooked as a major motivational factor as to why people buy custom knives.

Consequently, we who sell these knives, owe it to those who allow us to do so. To offer the very best product at the very best price we can.

This in turn produces loyal, long term clients who feel we have their best interests at heart and do not look at them as meerly a pay check.



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Les Robertson
Custom Knife Entrepreneur

http://www.robertsoncustomcutlery.com
 
Well, this is an interesting topic. I would like to meet some of the makers that Hoodoo (sorry is I spelled it incorrectly) knows-Most of the "full timers" making a go of it are actually retired, and, have a pension and the house paid off.
Me, I'm part time, work myself really hard on nights, weekends and some vacation days, and, after all the bills are paid, I'm not really getting rich-just having fun and paying for my tools/equipment.

One thing to remember-something my accountant told me-is that anyone who has a business, MUST have the goal of making a profit. If you can't do that, you should NOT be in business.

As far a what to charge, until you have run a business, it's hard to say whether someone who is is charging too much for their product. Especially in a handmade one like knives, where, most of the cost is labor. It isn't fair to subtract the material cost from the price of a knife and divide by the # of hours it took to make and figure that's the hourly rate--You've got to account for the total # of hours it took to make, sell and deliver the knife!!!!
You throw in email time, phone time, bill time, shop cleanup, ordering materials, mistakes, maintenance, shipping time, and, you've got a bunch of hours where you're not making any knives, or, any money.

So, if you think the knife is too expensive, just don't buy it-that's my best advice.



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Stay Sharp,

RJ Martin
http://www.martinsite.com
 
Les, you've done yourself proud. I appreciate your post. Once again, I've misjudged you. I have heard from several people that you are a good man. I don't doubt that. You obvoiusly care what others think about you. That's a good sign. I've said myself that I could care less what so and so thinks about me. In this business, you have to care. A persons impression of you goes a long way toward how much business they do with you. I'm a firm believer in that.

I know that you take quality knives previously purchased from you in trade for equal value towards a knife of greater value. I've heard that too. That's a real good way to do business. For a dealer. You can always resell the knife. All I can do is add it to my collection. No money in that, just a luxury for a maker. I don't have the same type of business practice, but I have been known to take a knife in trade for one of my custom knives. Actually, I've done it several times. Customers love it, because they don't have to come up with hard cash to obtain a knife they really want. They just give up one in their collection, and take on a new one to add to it. Good business. Not very profitable if you're not a dealer, but it builds the customers confidence in you.

But, what good is a custom knife to a maker who didn't make it? How silly would it be for me to advertise a custom knife I didn't make? It's just a collectible to me. Do you get that? Makers can't afford to do that kind of thing on a regular basis. Besides, if all makers were also dealers, where would that leave you?

I guess I should just shaddup and move on. We're never going to strike a similar chord. You always want to get one over on whoever you're fencing with. I like the conversation, but I'll never get used to the one-up-manship it takes to deal with you. I hope you do well with your business. Later.
 
Max,

It's ok to argee to disagree. Again, I wasn't trying to "fence" with you. In my last post I was trying to come across that I think that all of us who sell knives should do everything we can to win the customers trust and loyalty.

I for one understand that very few people really need custom knives. They buy them for the same reason you make them and the same reason I deal in them. We all want the very best we can buy, make or sell!



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Les Robertson
Custom Knife Entrepreneur

http://www.robertsoncustomcutlery.com
 
You hit the nail right on the head Les. I agree with you 100%! Thank you. You a good man. Kisses and hugs.
biggrin.gif
 
Collectors drive the market and determine the price of the knife.

But the question was "Why do makers charge the prices they do?" I have always thought that most makers do not charge enough. I beleive that they charge so little for several reasons. They either need a few dallors or they are looking for acceptantce. For me I like the fact that someone else would want to own one of my knives. I put a price on my knives so that they are available for someone to buy. I feel very lucky that most of the people who have bought knives from me take better care of the knives than I would have.

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Ray Murski
Photo page
http://albums.photopoint.com/j/AlbumList?u=935667&Auth=false
 
What about the fame factor? There is no doubt that it plays a part in product pricing.

Doesn't a collector expect to pay more for a comparable knife from a well known maker than he or she would from a less known one? Doesn't fame have value? Obviously, we've all seen wonderful knives from less known makers that are as good or better than those from better know makers that are significantly less expensive. The reason for that isn't the knife, but the marketplace.

I think we need to add fame factor to the list of elements involved in pricing a knife. Take care.


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Fred
Knife Outlet
http://www.knifeoutlet.com
 
I think that being a full-time or part-time maker effects the price. As a part-time maker i don't need as much for my knives.
 
RDF
I don't understand that statement.
Aren't your knives worth just as much as a full time makers? Shouldn't you be getting as much for your knives as the market will allow and others whose knives are of similar quality get? Or did I miss the point you were making entirely?
 
When you pay a knifemaker for a knife he's made, you're not really paying for the time he spent on making it. You're paying for all the time he spent getting to point where he could make that knife you want. Its the maker's experience (along with the talents they were born with and nurtured) that costs money. Only the maker knows what that is worth to him.

The market will tell that maker whether it agrees by either not buying his work or by cleaning him out and giving him a huge backlog.
 
JBrave, you da man! I like the way you think. You should make knifes. You'd do well with an attitude like that.
 
If you only make knives for the money and don't have knifemaking in your blood then your knives will show it and you'll not be at it long. New makers,without some outside help, have a big expence ahead of them. Most do it the hard way with whatever they have at hand or can put together, add equipment as they can get it and in the process chew up their leasure time and extra money. That process usually ends their knifemaking in a year or so. Only the ones with a heart for it will go on and spend the time and money that it takes to make knives that collectors will accept. Some get there faster than others but for all there is sacrifice and hard work on the way. As Les pointed out,any good business man will concider all of the factors when determining price. When you buy a custom from a good maker you're paying for the labor, raw materiels, supplies and overhead associated with that knife plus a return on his investment of time and money to get to the level of perfection you expect. If the market will not support that then unless he's an old fart like me who just has to make knives, or is wealthy (damn few of those) he must go on to other things in order to feed himself.
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[This message has been edited by Pete Peterson (edited 11-01-2000).]
 
This is an extremely subjective topic in my humble opinion.

First, you have to deal with the basic material value of stuff. This can range anywhere from a couple bucks into the hundreds of sometimes even more.

Then you look at individual makers...are they operating companies? Do they have employees? Are they flying solo?

This is an arguable statement but I feel blademaking is a relatively specialized field and has a lot of focus on experience. Specialized careers can operate on anything from mediocre to high wages.

Continuing with another question...does the maker have enough business to operate supply and demand efficiently? Are they well known enough to have many willing customers? If they are unable to satisfy their needs and only sell one knife in such and such time, it would appear that they'd need a higher per-product value to make it halfway worthwhile. Unfortunately, this also degrades the innate value of the business by reducing the demand for it. If the makers are wildly popular and are already backed up, are they charging reasonable prices that will keep them from being weighed down too badly with tons of orders? Again with the rules of supply and demand.

What is a great heat treat worth compared to a mediocre one? A reasonable amount of expertise plays a part of specialization. Also included with that is grinding ability, forging ability, handlemaking, design, ergonomics...knowledge of how to make everything come together.

The time they spend is part of it...but even though most people here don't give a damn about "spirit of the maker" or what not, I believe something to that extent is real. Many of the blademakers I know who are doing it full time are surviving off it but are not really wealthy in a monetary sense. They put a LOT of heart and soul into what they make, and even though it does not appear cheap, the price to me is worth it.

If something is not worth its price to you, don't buy it. Most everything in existence is out of my price range now, but my sights are set very high. I tend to ignore price itself, I just ask myself what I feel it'd be worth to me. With factory stuff most of the time, nope it's not. For example...I would have to be paid to even hold a Buck Strider for more than 30 seconds. Even a good number of custom items are not worth it to me...depends on what it is, how much I like it, and who made it primarily. There's a lot more innate value in some things than people give credit to.

Shinryû.
 
Do you make knives, Robert? With an attitude like yours, I have to wonder. Surely you do. You really know how to shell down the corn, old buddy. I agree with most everything you said. You need to post your opinion more often. It's worth reading. Thank you. Please let us hear more from you.
 
Knifemaking is a business. Some miss that point. Full time makers have to make a living from there products. Overhead, taxes, shows, ect. It all comes into play. Most knifemakers who love the business are ok with the many hats that have to be worn to survive. Its not as easy as just making a knife and sending it out. The hours are long and the days run together. Weekend? Whats that?
Balance with family matters, customers, teaching, designing (R&D) all of these come into play when pricing a knife.

Folks who understand business understand why prices are what they are.

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Web Site At www.darrelralph.com
NEW WEB SITE TAKE A LOOK!!!!!!!!!
New projects and pics to look at !!!!

[This message has been edited by Darrel Ralph (edited 11-05-2000).]

[This message has been edited by Darrel Ralph (edited 11-07-2000).]
 
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