Why the Low Prices in the Knifemakers For Sale Forum?

Like Rick said, there are a lot of other expenses involved in running a business other than the cost of materials.
and...as Chuck B said, marketing is very very important.
Even if the cost of materials is $50 there is no reason you can't make a $1000 knife.
To me what sets a cheap knife apart from an expensive one is style, materials and most important fit and finish.
For a product that is poorly made no price is low enough.
For something that is very well made and has a desirable style you can name your price.
 
Daniel Fairly Knives said:
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.
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Can you please elaborate on this? How trends and pricing can affect future business prospects?
Thank you.
 
I spent 35 yrs. working as a factory salesman for several companies. All the successful companies used 3 times cost as a basis for determining minimum selling price. If the product was unique in some way, they used 4 times cost. I plan to use at least 4 times costs because there will always be hidden costs that did not occur to me when pricing out a knife.

My attitude toward knife making is a little more cold blooded than what I have been reading here. I need to supplement my Social Security, so while I enjoy it, make no mistake, at the end of the day I want a profit. With that in mind, my approach is to identify a particular task (skinning a deer) and design a knife to perform that task in the most efficient and easiest way. If I am successful, I have differentiated my knife and can get my price. Time will tell.

Any Marketing 1 class will tell you that to stay out of the race to the bottom price and not have to compete with hobbyiest, you must identify your market and differentiate your product. Sometimes, we knife makers forget that.

Tim
 
Lots of interesting posts in this thread guys. :)



I don't have a lot of input for the OP (sorry! :foot:) but I wanted to touch on a couple things that have been brought up in the thread. :)



IMHO, you have to be careful about basing your prices off the time it took you, and/or your cost of materials.

My reason for saying that about time?

A knife that took me 40 hours to make 15 years ago... I can make (better) in 10 hours now. If pricing based on hours, I should be charging less.... Hmm... ;)


Cost of materials? (As was pointed out, "cost of production" is a better way to look at it, as it encompasses the whole she-bang)...


Here's one of the latest knives I sold.
[video=youtube;D0QV7kGUHGQ]https://www.youtube.com/watch?v=D0QV7kGUHGQ[/video]


The blade steel was about $4, the guard stock was about $2, the spacer and pin stock- $1-2?, and the wood came from a woodworking place going out of business--- it cost me about $5. So by cost of materials, that's right around a $12-13 knife.... ;)


I sold it for a little bit more than that.

The factors that are really hard to put a price on, are the years it took to be able to make that knife, and the market position I have worked toward in the process. Although I feel extremely blessed/fortunate... it didn't happen without a lot of blood, sweat, and tears. :)



I know there are a lot of guys selling $150-200 knives that see my prices on a knife like that one ^^^ and think it's crazy. But if you were to brutally get down to the bone of it, I could kick out 10 or more of those $150 knives in the same time it takes me to build that one fighter. But I am known more in the bowie/fighter market, so that's the best place for me to keep my focus (for the most part anyway ;)).


If you want to look at the really big picture... pull back enough so that you can take a look at the ~museum quality~ knife makers--- like the guys that are part of the Art Knife Invitational (AKI show). Mr. C Gray Taylor sold a knife at the last AKI show for something like $63,000.

Kind of shocking/amazing:eek:? Of course it is... But consider the level of skill that this man has, the desirability of his truly amazing work, or just simply the fact he's been making knives even longer than I have been alive... before you try to decide if he has earned it. IMHO, he sure as hell has earned it. :cool: :thumbup:

Here's the knife... :eek: :cool:
large.jpg




All of this is just some stuff to think about in the scope of pricing knives. :)
 
I thought I had the pricing figured for when I actually start selling ??? I have learned from this thread and will go back and study it some more. Thanks
 
Nick, Great post! If we imagine for a moment that you and I made identical knives (Which I know isn't possible, just imagine) your knife would easily fetch 5x the price my knife would. You EARNED that through the years you put into developing your skills and reputation. As long as you heat treat the knife, (:D :D ) your knife SHOULD be worth a lot more than mine. On the other hand, I have a waiting list of people to see me for consultation on mental health matter, I EARNED that through 21 years of hard work.
 
As a collector I'm going to say that a lot of factors go into what a buyer is willing to pay. To some extent the selling price is going to be set by supply and demand. I've been collecting custom knives for a long time and I don't see that the prices these days are out of line with what they were a long time ago, and making an allowance for inflation I don't think they are too low now, if anything they are too high. I see some knives on the sales forum that sell very fast, so there must be some factors that set them apart.

With a lot of products, it is not automatic that the selling price is higher than the production cost. Just because a house builder spends $200k building a house doesn't mean the house is worth that much, it might mean that the house builder is not good at controlling his costs. His competitor might be building similar houses for $150k. Likewise a knife builder that is building knives of the type that sell for an average of $250 must be able to produce the knives for less than that, or he is doing it for some reason other than profit. I've read numerous WIP threads here and I marvel at the workmanship and lengths that makers go to to make knives a certain way, but should they expect the buyer to pay for all of that extra time? In some cases the answer would be yes, but in other cases maybe the buyers don't care.
 
From the outside looking in, as a standard user/consumer/whatever you want to call me of knives, I'd like to throw in my two cents. I've handled and bought a grand total of two knives off of the Knife Makers for Sale section of the forums, for 55 and 65 dollars. They were made by someone who makes knives as a hobby, not a full time maker, and were some of the few he had put up for sale. My "collection" consists of production knives (excluding the two customs) and are all, aside from a Buck 110 I received as a gift, users. As a full time student, I simply can not afford a safe let alone a "safe queen" or artistic piece.

The prices of the handmade knives I purchased were set to cover costs of production, and even at 65-75 dollars, They sat on the exchange until the maker dropped it down. The knives match if not outperform production knives of the same price point, however the "custom" aspect is what made me purchase them. I think there have been some unfair jabs at the hobbyists who sell their knives at a low price. As previously mentioned, a stock removal knife made by a relatively new hobbyist knife maker would not sell for days at a more than fair price (until the price was lowered and I purchased it.)

It has been said multiple times that the race to the bottom by hobbyists has "ruined" the market for the full time knife makers. From a consumers standpoint the Knife makers for sale forum is very primitive, especially when some asking prices are more than a months paycheck. Sending over large chunks of money via paypal can be intimidating, a feeling multiplied after a simple look at the good bad and ugly forum, which is littered with reports of scams, disingenuous activities, and misrepresented services.

It is also VERY HARD to judge the quality of a knife with only pictures. Not many custom knife makers get discussed in the General Knife Discussion forum, and it seems that fellow knife makers are the most active on the Custom & Handmade knife forum. Aside from the pictures and the limited review, How am I, and other consumers, supposed to know that a Big Chris custom in s90v is a far superior product to a flashy production knife? Why is a Bona CopperField less expensive than a Slim Wharncliffe by Hall Handmade? Pictures can sometimes fail to capture a distinct pattern in a burled wood handle, lightly defined Damascus, or hamon. How does the consumer know that "The pictures do not do the knife justice" when all they have is the picture to base their impression on?

The rule that insists that anything other than "I'll buy it" is clutter on for sale threads (all though pretty much ignored) discourages discussion in the for sale threads and leaves an impression that unless you're seconds away from typing "i'll buy it", you're just looking. While most knife makers claim that handmade knives create a more personal experience for the buyer, because of the previously mentioned rule, how would one know unless they've already committed to buying the knife?

The price of the knives on the forum, while more than fair, are way out of the average low budget knife collector's league. Those low budget knife collectors (My self included) seem to make up a fair portion of the users here on bladeforums. I fall in the "just looking" category I mentioned earlier.

I browse the Custom Fixed Blade for sale more than any other thread, and dream about purchasing one of the amazing pieces created by the career knife makers, Every knife made by Ian Hall seems to just work aesthetically, The insane wood and feather Damascus done by Backwoods Custom is amazing, I wish I could buy every knife the full time knife makers put up for sale, however I don't have the disposable income. The best I can do is recommend to those looking for a new blade in general discussion, that instead of buying a production knife in the same price point, they come to the For Sale forum and buy it there. I admire the passion and creativity displayed through the art pieces, appreciate the sheer effectiveness of the utilitarian pieces, and lust after the ones with the perfect balance of both.

Edit: It seems that either the rule in relation to the Custom Knives For Sale forum has either been amended making it the exception with the exception that the maker/craftsman requests and welcomes feedback (which few do), or when I initially read it, I did not read carefully enough. Regardless, the comments in the for sale threads tend to be vague compliments, and very little discussion regarding the maker takes place. I maintain my stance on a lack of familiarity and a personal experience previous to committing to purchasing a product.

TLDR: While the prices don't fairly represent the product, they are still too low for the average bladeforums user. Compared to other forms of online transactions, blade forums can be intimidating, primitive, and relatively uninsured. The format in which is required to purchase knives also eliminates the personal element that buying a handmade product usually provides.
 
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lastbrunneng said:
Can you please elaborate on this? How trends and pricing can affect future business prospects?
Thank you.
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Hi, welcome to Bladeforums!


I feel that pushing prices hard during a trendy phase can hurt the business down the road. I am more interested in intrinsic value and the resale market than pushing things as high as possible.



Take clothing for example - Guess jeans went for a ton back in the 1980's but didn't really offer a product that was better than the competition... once the trend was gone they were left with a product that had no edge, little intrinsic value and no-one wanted to buy them. Now you see them in the thrift shop for cheap.

Levis on the other hand didn't put out a cheap product (just not so pricey), they put out a product that would last and was worth closer to the selling price. They never got to see that crazy profit per item but they are in business to stay.


Analogies aren't that great... I have big respect for other makers and hope to see everyone do well.


edit - on the other hand Bob Loveless was making knives for a few hundred each that were reselling in the thousands as he sold them... his order list was so long that by the time he made the knives the value was so much more! I say don't take too many orders... :D You do have to follow your own market and do the best you can.
 
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Marty Young said:
Notice that I said, "the old standard". Maybe, you didn't comprehend and I never said it was outrageous.
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I knew what you were talking about, Marty and wasn't centering out your post. Reading my response over, I can see how it would of looked as if I were taking you to task... that was not my intent.:o When I said "you", I was addressing no one in particular. I was told that same thing many times and like you, felt it was outdated. There are those who WOULD and DO follow that line of thinking and if left unchecked can kill a business prospect, quick.
 
Rick Marchand said:
I knew what you were talking about, Marty and wasn't centering out your post. Reading my response over, I can see how it would of looked as if I were taking you to task... that was not my intent.:o When I said "you", I was addressing no one in particular. I was told that same thing many times and like you, felt it was outdated. There are those who WOULD and DO follow that line of thinking and if left unchecked can kill a business prospect, quick.
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I didn't think you were singling me out. That "old standard" was one I heard about twenty years ago.
If I used that as a basis for pricing my knives I couldn't pay my electric bill.

There are so many factors to consider when pricing your work, especially if you're full time. This thread is a great opportunity for all of us to learn a thing or two.
 
In regards to time and pay that Nick Wheeler mentioned, it reminded me of when i worked for my dad as a mechanic. We based work or "book time" For example, if the book called estimated 2 hrs to replace a timing chain then thats what we charged. My dad, who worked on cars since he was a kid, could do it in a fraction of the time and thus could make more money for his time (or offer lower prices to get more business). It might take me longer than book, but i was cheap labor.
Of course in another automotive parallel, a ford mechanic, a porsche mechanic, and a rolls royce mechanic all make wildly different amounts per hour based on the wildly different performance and fit/finish.
When you start out you have to work for little to no money on some "ford" knives, but eventually you get good at it an you can make em fast and with consistant quality. Thats when you make money. If you have a reputation you can probably make a living here. And/or You could then Move to making "porsche or Rolls" knives. Again youll be working cheap but eventually you can get faster and more consistant.
 
I have not read every post but I think a HUGE part of the reason that knives sell for less here is due to the fact that the makers can edit the post after the sale to delete the sale price. If all makers had to have those prices archived so that potential customers could review previous sale prices, they may be less likely to lower prices. As it stands now you can drop prices to get the quick cash and not have to have that "black mark" potentially keeping your prices low in the future. I would bet anyone selling cheap is hoping to increase prices in the future but for whatever reason need or want the sale now.
 
While on the subject and similar to my above post, there is a self perpetuating cycle of selling too low. I once talked to a maker that was selling, what I thought to be knives worth about $500 dollars, for $200. I asked him why he sold so low and he said it was because this is how he paid his bills and his bills were due. Well by selling low today he would be covering those bills for a much shorter time period that by selling at competitive market value. In doing so he would have to sell low tomorrow (next week or month) in order to pay those same bills again. In this cycle a maker never gets out of undervaluing their product in the market because they must continue to do so to keep afloat. I would guess this has put many knife makers out of business or back to a "real job".
 
JMJones said:
While on the subject and similar to my above post, there is a self perpetuating cycle of selling too low. I once talked to a maker that was selling, what I thought to be knives worth about $500 dollars, for $200. I asked him why he sold so low and he said it was because this is how he paid his bills and his bills were due. Well by selling low today he would be covering those bills for a much shorter time period that by selling at competitive market value. In doing so he would have to sell low tomorrow (next week or month) in order to pay those same bills again. In this cycle a maker never gets out of undervaluing their product in the market because they must continue to do so to keep afloat. I would guess this has put many knife makers out of business or back to a "real job".
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Maybe so. But if a $200.00 knife sells, you will have $200.00, if a $500.00 knife sits in the sales forum for weeks you will have $0.00. Since trade shows are not held everyday, or at all depending on where you live, or only a few times a year, you may have to sell that knife for less than you think it is worth.

Any knifemaker can charge whatever he wants for any knife they make, ultimately it is the market that decides a products' "value". An expensive product left unsold is worth nothing in the big picture. You can choose to keep all of your expensive knives on a shelf, or list them for a price they will actually sell for. It sucks but often that is the decision a lot of us are faced with.
 
Ill tell you the secret to being a successful smith..Get a good paying gov't job, retire from that and you wont have to worry about bills :D Seriously though, being a craftsperson of any shade and paying the bills is hard..I know..I have a friend who is pretty well known nation wide as a primitive bodger that makes stunning pieces with nothing more than a hatchet and a drawknife..He has $5K chairs and sells them..Even he sometimes just gets by and he dosnt have any bills(paid off mortage,used vehicle etc) and almost 0% overhead..
 
rickmenefee said:
Good stuff sells itself!
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Though that gets said often enough, it isn't as true as we'd like to think. There are plenty of great products that have disappeared due to poor marketing and other horrible products that enjoy success due to stellar promotion.
 
Once you establish a realist price dont go backwards. Look at priceing once a year. Its a busneiss run it like one. Cutomers sell your products for you. AT least this is some of the information I paid to get in a busneiss plan many years ago.
 
There is no mention of 'cash flow' from professional knife makers. The bills remain constant...the cash flow to pay those bills is many times 'spotty', either feast or famine, especially for the beginning full time maker. When I first opened my retail studio, this was the case for me. I never kept 'time' records for any of the jewelry I made because I really didn't want to know that I was working below the minimum wage, so I looked for other ways to increase my cash flow. I found that by doing repairs, instead of just depending on sales, leveled out the cash flow.

And here's why. When I made something, I was intent on doing the best possible work I could do. I took a lot of time, and in the end I was losing money. I set my shop labor rate for repairs at $50.00 per hour back in the late 80's and found that my 'cash flow' increased dramatically. Over the years, my labor rate on repairs increased to $125.00 per hour. I found that repairs were 'trust sensitive' rather than 'cost sensitive' as very few people ever questioned price. The high labor rate on repairs helped to 'average' out my labor rate on manufacturing items for sale. This worked for me for the 28 years my studio was opened.

If I were good enough at knifemaking to think about doing it full time, I would definitely look at knife repairs as a way level out my cash flow.
 
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