Why the Low Prices in the Knifemakers For Sale Forum?

[Patrice Lemée]

An crap James, you mean I am a professional now? :grumpy:
I like being a wallabee.

 

[tryppyr]

That's okay, Patrice. You can be whatever you wannabee.

 

[james terrio]

If you have to ask...

 

[Patrice Lemée]

If you have to ask...

Oh good, you had me scared there for a minute.
Back to being a wallaby!

PS: Greg, there are SO many makers I wannabee like.

As to the subject of this thread (sorry for the silliness) I find pricing, with all that is involved, one of the hardest thing about selling knives. I sure tip my hat off to you guys (and gals) that have to do it for a living.

 

[Stacy E. Apelt - Bladesmith]

I have read this thread of and on and will post my experience in pricing.

1) Buyers often have no idea what goes into making a knife. The customer may think it is overpriced when it is a bargain.
2) Makers often have no idea what they actually spent on a knife. Time, supplies, and equipment are commonly left out of the price.
3) Some sellers want/need to make a sale. They will sell a knife at cost just to get the money spent returned.
4) Once that method of rolling your money has started it is a hard path to leave.
5) Educating the buyer is your best way to get them to understand your pricing.




I have had knives that I priced at $200 just move that were below the materials used and people still thought they were too high, and knives priced at $15,000 which people thought were a real deal. Pricing and public impressions are the hardest part of knifemaking to figure out.

 

[Smithy]

I guess I didn't explain myself well. When I said it was about money, I was not taking about the price of a knife. I was talking about money , and the pursuit of money as motivation to pursue their knifemaking. A professional makes knives for money to support his family, equipment, shop, etc. The motivation for an amateur to make a knife is fun and self-satisfaction from making a knife. Sales are a secondary motivation.

Sorry for the confusion. Teddy

 

[Marty Young]

I may disagree a bit on the "too many knife makers today" and re-phrase that as being too few knife buyers. Promote and educate more people/buyers and the landscape will change.
Bailey Bradshaw told me one time to walk down a busy city street and ask random people if they knew where I might buy a custom knife.
No one would even know what I was talking about.
The major population, as a whole, doesn't even know we exist.

I attended one of Les Robertson and Bob Neal's seminars at Blade one year. Les was talking about the price and quality of custom knives. At one point he said, "the people right here in this building, right now, get it. They understand what it takes to make these things and their price. When you leave here, the farther away you get, the less people understand."

A lot of the local people don't even know Blade Show takes place in Atlanta. I'm sure it's the same for other shows.

 

[james terrio]

A professional makes knives for money to support his family, equipment, shop, etc. The motivation for an amateur to make a knife is fun and self-satisfaction from making a knife. Sales are a secondary motivation.

Sorry for the confusion. Teddy

Not pickin' on you, sir. I'm just quoting you again because I find your thoughts insightful.

That perceived difference totally illustrates my point... I make knives because there's literally nothing else I would rather do. The whole process is indeed fun, self-fulfilling and satisfying. But sales are not a secondary motivation... I gots bills to to pay. I fail to understand why those considerations would be contrary to one another.

A "hobbyist" who doesn't really give hoot about any of that is in a completely different category... he doesn't give a damn about sales or provenance or lying on his death-bed thinking back on how he spent his life. That's cute.

 

[bodog]

I think I understand your point, but I respectfully and strongly disagree that it's just about money. I'm dang sure not in this to get rich quick, and my clients are not quibbling over a few bucks here or there.

I spend a lot of time and effort keeping my prices in line with certain manufacturers that provide similar knives to mine. That's indeed a function of money/cost/etc... I have to sell knives to pay my bills. What I offer to compete with them is a much higher level of fit/finish, better steel and more comfortable/usefull designs, the pesky details of specific HT processes for ultimate durability, and most importantly, better performance. But there's a personal/emotional component as well.

My client-base continues to increase every month, and I am very pleased by the percentage of prior customers who order more knives from me. Why do they do that? I believe it's because they...

A) Realize that I provide a superior product at a competitive price.
B) Understand that I put a boatload of time into every detail.
C) Enjoy the process of dealing directly with me, not some faceless marketing nitwit, or some doofus who's made a couple half-vast knives in his spare time.
D) Know that I am truly passionate about what I do. This a lifelong career choice for me, not a hobby or sideline. I've put everything I owned on the chopping block to make this happen. And quite frankly, I've never been happier or more excited to wake up every day and get to work. My clients trust me to be there for them six months or a decade from now.

That, my friends, is what separates the wannabees from the professionals.

+1 to everything you just said

 

[Britt_Askew]

Reading threads like this gets me so confused at where to price my work. How do I figure where to start my prices ? I once read where somebody said if you lower your price to sell it you are doing a disservice to anybody that bought one before by lowering the value and that stuck with me and I would rather start low and work my way up, but last thing I want to do is be in a race to the bottom.


This picture is what I am working on today and most of the people around here look at me like I am crazy when I tell them I will sell it to them for 100 bucks and here everybody says 100 is giving it away. At a 100 sale price I could pay for materials including leather sheath,ship for free, cover the paypal fees, pay the light bill (if you did this 40 hrs a week) and I would still end up making more than my wife did them same hours. She works for the biggest employer in town been there a dozen years and has worked her way up a bit , many there make less.


Pricing feels like standing in a circle with swords pointed at you, some closer than others and you have to figure where you can stand without getting poked.

 

[Marty Young]

The old standard was sell it for enough to buy material to make two more.

 

[Daniel Fairly Knives]

It's an open field out there, I have gotten well over 6k in order requests this week alone.

It's a 5 year plan here... build, build, build and work as hard as possible to make it happen.

The market is there, build it and make it happen!

Focus on design, execution, marketing and building quality customer relationships. If a knife sold does not generate several order requests try to rethink what you need to do to make it happen.


It's fun too! There are way easier ways to make money but I find knifemaking very rewarding.

I'm in the start of my fourth year, I hope to keep building up my shop and production speed over the next two years... everything is still going into the business.

One thing to consider if you are successful is longevity... I'm seeing prices from some makers that might hurt their business later when trends change. I'm building a long term business with the future in mind.

 

[HuffHK]

Interesting thread with lots of insightful posts. I'll ad a couple thoughts as a new hobbyist or amateur.

First off material cost and production cost are entirely different things. Material cost are blade steel, handle material etc. anything that actually goes into the knife. Production cost include things like utilities, rent, wages/time and other expenses incurred while producing a product. I think its important to differentiate the two and most people probably are referring to production costs when talking about how much it cost to make a knife vs material cost.

I am brand new at this (other than a couple blades I made 15+ years ago) and over the last six months or so I have spent almost exactly $1000. That includes building a 2x72 grinder from scrap. I have only completed 2 knives and have several others in the works (50+ hours a week working my regular job and a 5 month old keep me busy). Currently I have enough materials in inventory to easily complete 20 knives. That comes to about $50 a knife (I'm muddying the waters because I'm including some production cost in that estimate material cost would be less).

I would say that material cost for the majority of entry level custom knives I see on the for sale forum (3-4 inch fixed blades) would easily be covered by the following:

$15 Steel
$15 Handle materials
$15 Sending out for professional heat treat
$15 Misc hardware (abrasives, epoxy etc)
$15 Beer

That's a grand total of $75. I don't see many knives for sale at that price point and the ones I do don't have $15 handles or advertise professional heat treat. My point is that from my perspective it does not seem to be the case that the market is being flooded by knives being sold at material cost. I may be playing devils advocate and am not suggesting that it is a good long term business model to sell at material cost but in all honesty I just don't see material costs being that high. I would wager that the knives being posted in the $100-$200 price range have far less than $100 in material cost.

From a business prospective you need to cover production costs in order to be successful long term. That includes time, which I think is at the root of this topic. How much is the time spent making a knife worth. That number will be very different for everyone. As someone who is doing this with no financial goal, my time spent is basically irrelevant. If I was making knives full time to put food on the table the time spent would become very relevant.

I would like to hear some actual material costs from people who do this full time. I'm aware that this varies but lets just say a 8-9 inch hunter in 10xx steel with micarta slabs and ss hardware. Is my estimate reasonable or am I way off the mark?

I wish the best of luck to anyone starting out and continued success to those of you who have made this your career.

As an aside, pricing at or below production cost and/or under competitor prices ("undercutting") is a common business strategy for gaining market share and can be very successful when executed properly (not that I think anyone on this forum is consciously doing that).

 

[Smithy]

HuffHK---you make some good points. The only one I take exception with is that $15.00 for beer per knife is much to low. Teddy

 

[AddictedToGear]

I may disagree a bit on the "too many knife makers today" and re-phrase that as being too few knife buyers. Promote and educate more people/buyers and the landscape will change.
Bailey Bradshaw told me one time to walk down a busy city street and ask random people if they knew where I might buy a custom knife.
No one would even know what I was talking about.
The major population, as a whole, doesn't even know we exist.

I agree with this. Ever since I got into custom and handmade knives year ago I really began to appreciate them and especially when I started making them. With all these makers (hobbyists mainly like me) pricing so low it is kind of disappointing and discouraging when you know how much work went into it and what it should go for. The more sad part is that sometimes or any times they will not even sell. As far as fixed blades go, I find it hard to buy production anymore with such goo makers that come in at a fair price. There are a few production companies I like that I will buy like Busse, but other than those I try to support fellow knife makers.

 

[Rick Marchand]

The old standard was sell it for enough to buy material to make two more.

For a hobbyist to continue his passion? ... sure. For a business to pay the bills and put food on the table? ... that's not enough, IMO.

If my margins aren't better than 75%, I have to change something. In other words, I need to sell a knife for almost triple the cost of sales. If that sounds outrageous, you just haven't analyzed the numbers deeply enough. You can't just stop at materials, supplies, labor and shipping/handling. There are a dozen or so other costs that go into selling that knife.

 

[Dave Behrens]

In relation to this topic, I just had to lower price on two knives in the sale forums because they have been up for a week. Hopefully I will still turn a profit. We will see...

 

[Dave Behrens]

For a hobbyist to continue his passion? ... sure. For a business to pay the bills and put food on the table? ... that's not enough, IMO.

If my margins aren't better than 75%, I have to change something. In other words, I need to sell a knife for almost triple the cost of sales. If that sounds outrageous, you just haven't analyzed the numbers deeply enough. You can't just stop at materials, supplies, labor and shipping/handling. There are a dozen or so other costs that go into selling that knife.

True, but it seem to be getting more and more difficult to find someone who will pay those prices. More and more people seem to want to buy a dollar for a nickel.

 

[Zidfeldts]

Up here a tradesman ( plumber, electrician etc. ) makes about 45 bucks an hour. It takes 4 years apprenticeship to become a journeyman. I don't know how long it takes each knife,aker to make a knife but out of all the knives that I have I don't think anyone made 45 dollars an hour. This tells me that most knives are underpriced. Once I figured out that I could buy a knife for less than half a days wages it took away any desire I had for making my own.

 

[Marty Young]

For a hobbyist to continue his passion? ... sure. For a business to pay the bills and put food on the table? ... that's not enough, IMO.

If my margins aren't better than 75%, I have to change something. In other words, I need to sell a knife for almost triple the cost of sales. If that sounds outrageous, you just haven't analyzed the numbers deeply enough. You can't just stop at materials, supplies, labor and shipping/handling. There are a dozen or so other costs that go into selling that knife.

Notice that I said, "the old standard". Maybe, you didn't comprehend and I never said it was outrageous.