Yet another thread on pricing... sorry

okzj

okzj

Joined
Aug 16, 2008
Messages
222
Well, it has been a busy few months at the Coleman household. I've been cranking out knives just as fast as I can (which is sort of slow with the heat the way it is), and every time I think I can see the light at the end of the tunnel I get more orders. I know... cry me a river. What is disturbing to me is that at the end of the day, I have very little left over for supplies. Micarta costs money, steel costs money, forge liners cost money, belts cost (a lot of) money. Never mind that I'm using a damn railroad track as an anvil or the old crappy Craftsman for my grinder. I don't have a drill press or a bandsaw, or even a damn real workbench for that matter. These are things that I'm going to have to acquire eventually because I'm doing a lot more work and creating a lot more waste to achieve the same result as I would faster and more efficiently with proper tools. I'm not even counting my time to be worth anything at this point because lets face it... about 50 people on the face of this planet know about me. I really think I'm underpricing, but it could all be in my head.

So, with that, I ask YOU... what would YOU pay for a knife like this, and pardon the pics:

It's O-1, proper (15 minute soak) heat treat in a digitally controlled reducing atmosphere oven, 0.020" behind the edge, 3" blade, linen micarta handle, stainless pins, stock removal, hand stiched leather sheath.

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I guess I'll go first. I think that, for me, this would be in the $80 ish range. I am not usually attracted to the type of angular shaping to the handle, and the sheath looks a bit rough. I am not a fan of small sharpening choils, but yours is very minor so would be overlooked. The finish looks great, and you have a nice straightforward working design. Not to say that I do better, but as a customer this is what sticks out when thinking of purchasing it.
 
I was thinking kinda around the same lines. you fit and finish looks good, the sheath i think could be refined. i was going to say a bit over 100 with how it is now.
 
I wish I could answer but:

a: I'm cheap.
and
b: I don't buy knives.

I can tell you that I sell knives similar in size with sheath for $40.00 - $50.00 Canadian though.
 
okzj said:
Well, it has been a busy few months at the Coleman household. I've been cranking out knives just as fast as I can (which is sort of slow with the heat the way it is), and every time I think I can see the light at the end of the tunnel I get more orders.
Click to expand...

Hi Friend,

I found out a long time ago, when it comes to the bottom line you need to be careful what premises you operate by. For instance, I just could not get ahead Goldsmithing in Beverly Hills. I thought, as did my fellow goldsmiths, all I needed was more jobs. I kept bidding on more work and getting more jobs and still couldn't make ends meet. One day I finally sat down and said enough was enough. I spread all more job tickets out and did the most thorough cost and time projection I could. I found I had about two weeks work and once I paid for all my materials had very little net. "Damn," says I, "At this rate the more jobs I get the faster I'll go broke." I had had it all wrong!

There are two basic ways to effect your bottom line: decrease expenses, and or increase revenues. As for decreasing expenses, there are two basic ways to cut costs: spend less on materials (buy bulk, use lower quality at less expense, minimize waste) spend less time (improve your skill sets, better equipment, reorganize shop layout, optimize production runs, etc).

Increasing revenues also has two basic approaches: Increase the price point of your product (sell for higher prices while producing for less cost); sell more volume (increase sales, often via better marketing, but can be by improving or expanding design line, etc).

One thing telling is, "every time I think I can see the light at the end of the tunnel I get more orders." In other words, your ability to sell seems to be out stripping your ability to produce. This suggests you should be able to safely increase the sale prices of your knives. You also implied your not able to replace you materials and supplies from your earnings. This is likely another indicator you are underselling your wares.

Just a couple of cents worth of ideas.

All the best, Phil
 
Double your price. If you run off half your customers you will still make the same money with 50% less work.
 
This is all good advice. Phil, that's probably the shortest MBA course I've ever heard. :)

All that said, when I looked at your knife I thought, "Three-piece knife, good finish, kind of rough handle, $85." That's a nice knife. When Bill said 'double your prices, halve your customers and work' I think he had a point.

Good luck! And I'd be interested in learning what you decide to do.
 
Several years ago I was in a similar situation ( without the lack of equipment). I was making lots of fillet knives, and selling them as fast as I turned them out. I was making a gross profit, but not really any net profit. I raised the price from $75 to $125. I lost few sales, and made more money ( to put back into more materials and tools). However, this only works if the product is worth the price.
Try something like that and see what it brings. What are you currently charging?
Stacy
 
I agree that if you have plenty of orders and poor income you probably need to raise you prices. But there are two concerns.

1: it needs to be worth what you're charging. A small well made knife of that construction might be worth up to $150 - but everything had better be spot on.

2: you can't just "try raising your prices" very well. You kind of just have to do it - not "try" it. The reason being if people see your prices going up, that can actually improve the value of things they bought from you in the past. A good thing. But if you go too high and sales go down and you want to lower your prices - people who bought at the higher price will see the value of their purchases go down. It is not good to see a maker's wares going down in value. This is a concern even for obscure user makers.

My suggestion is - if you're in the $100 range, go to $125. If you're already in the $125 range you need to figure out how to do things faster and make more sales volume. If sales drop too much once you've gone up - figure out a way to improve sales without dropping your price. Good photo's go a long way as do good descriptions for the educated buyers out there.

Obviously, never ever skimp on quality - crappy knives can be had at Walmart for $40...
 
Increase your prices as stated, but, I would also get a few sets of quality stabilized scales. Have a higher end knife as well as your nice users. Raise your price with those first. Then follow with the micarta. You have a great mirror finish and high end scales will help get you paid for it. On your sheath, just a bit more cleanup will help. One stamp and a border of that stamp adds a lot to a sheath. After I get mine stitched I use a sander belt to smooth the edges up then a belt turned inside out will burnish the edges. Finish your stitching by running the needles inside or coming out between the layers and cutting the thread off so no ends are exposed.

Are you signing your work? A small 12 volt battery charger and a stencil is all you need to start. Little things do a lot to increase the value of a well made blade.
 
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Thanks, guys.

That knife/sheath combo has been selling for $65. I agree my leatherwork needs refinement... it has been pretty negelected lately.

I really appreciate the input.

Taylor
 
I'm pretty new at this too and seem to have the opposite problem as you (more knives than sales), but I'd guess that knife with that finish and sheath could go between $85-110, depending on where you sell it and to whom. I'm for pricing a little more than I think I can get, because I know I won't get it if I don't ask. That's some good work you do, and $65 is too little for it.
 
One thought on saving cost is on a small utility like that do you need a mirror finish?You could save time/labor and equipment/supply cost by doing a satin finish.
 
Ditto...

You should be getting more money for a mirror polish. I would think $85 would be a nice price on that knife. With a better sheath maybe even $100.

At $65 I don't think you're getting your money's worth out of that mirror polish.

Also, does your market require a mirror polish? I like a nice satin finish. I won't worry as much about what the knife will look like after I sharpen it the first time.
 
I guess I don't have to do the mirror finish, but it doesn't take much time. I do a lot of finish grinding with 400grit Tizact belts, so when it comes time to polish I just hit the buffer and get the mirror finish faster than I can hand sand a satin finsih. Heck, on any knives where a satin finish is requested I go all the way to mirror polish and go back with 600grit paper.

I'll work on the handle and sheath quality. I guess I've just gotten so caught up in the blades that I've neglected the rest. I'll admit it... I loathe handle and sheath making, but "a blade does not a knife make". It has to be the whole package, and I understand that.

You guys have helped more than you know. I appreciate it.
 
okzj said:
Well, it has been a busy few months at the Coleman household. I've been cranking out knives just as fast as I can (which is sort of slow with the heat the way it is), and every time I think I can see the light at the end of the tunnel I get more orders. I know... cry me a river. What is disturbing to me is that at the end of the day, I have very little left over for supplies. Micarta costs money, steel costs money, forge liners cost money, belts cost (a lot of) money. Never mind that I'm using a damn railroad track as an anvil or the old crappy Craftsman for my grinder. I don't have a drill press or a bandsaw, or even a damn real workbench for that matter. These are things that I'm going to have to acquire eventually because I'm doing a lot more work and creating a lot more waste to achieve the same result as I would faster and more efficiently with proper tools. I'm not even counting my time to be worth anything at this point because lets face it... about 50 people on the face of this planet know about me. I really think I'm underpricing, but it could all be in my head.

So, with that, I ask YOU... what would YOU pay for a knife like this, and pardon the pics:

It's O-1, proper (15 minute soak) heat treat in a digitally controlled reducing atmosphere oven, 0.020" behind the edge, 3" blade, linen micarta handle, stainless pins, stock removal, hand stiched leather sheath.
Click to expand...


It doesn't really matter what I'd pay. A product is only worth what someone is willing to pay for it but aside from that what you want or need is what you want or need. All that matters is what you expect and/or want out of it and you should get that.

When I first went from working in the mouth to sales where I applied to be a consultant selling dental equipment one of the owners of the equipment company I started out for before buying into my own company asked me what made me think I could be a salesman and how I'd deal with rejection which is part of the job. My answer was quick and simple.

I told him that when I was a single gent that my philosophy was, if I asked ten gals out everyday to go to dinner with me or a movie or somethin' that the odds were pretty good one or two would say yeah now and then and if I came off pretty well and learned I could probably get better at it as I go learning how to increase those odds a bit more. He liked my answer and hired me with a smile. If you want $120 for yer knife then ask that for it and make no apologies for your prices. Granted if they are higher prices vs lower, not everyone that sees them will buy them because some folks shop based on price alone but just because they don't buy it doesn't mean you have to lower a price. My point is that someone will pay what you want. If its more $ you want then ask that and stick to yer guns. Its what you want period and all else is irrelevant. Aside from this you don't want to pay people to buy your knives. If you ask for more than you think you want for it by just a bit odds are good some will still pay more for it and at least you'll feel better at the end of each transaction rather than feeling like you just gave away your work where you are kicking yourself mentally after that.

STR
 
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These have been some of the best responses on pricing I've ever read... By the way that's pretty damm impressive work for having the tools you said you have to work with! Pricing must also consider time involved. If you made that knife in 2 hours, $65 would be great if it were just a hobby, but not if it took you 10-12hrs and you're tryin to pay the bills... Increase your prices by 50% at the next knife show and see what happens, you'll be surprised I think (I also think that knife should go for around $95 which is about 50%), if you don't have a stencil setup for etching, get e dremel tool with a small diamond bit to scribe your name on it, practice on scrap pieces until your 'autograph' looks as good as the knife... Dress up the sheath a little also, It's just as important to the buyer...
Just my 2 cents...
-M
 
I forgot to answer the marking question... I do sometimes, but I have to mask and cut out tape to etch my mark. I have a stamp set on the way.
 
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