Jason Fry's thread - Licensing-collaboration-Midtech-advice

Here's the synopsis.... I want to know some pitfalls of a midtech knife run. What I'd really like to here is the crisis points or failures in some of your past midtech runs. Did you end up with a ton of leftover materials or blades? Did your deal fall apart, and why? Things like that. Where are the land mines, so I can walk around them.
 
I' following this too Jason. I have several wholesale deals going right now with some more in the wings. So I'd like to hear what other folks that might have been down this road have to say.
 
Made some progress on the deal tonight. Going to make a run of 5 "prototypes" and see where it goes from there. We didn't talk price specifically, but we're in the same ballpark. He's thinking 25-35% markup, which puts my price to him close to my regular retail. We didn't nail down the specifics enough for a dead-on price quote. He's also open to a bigger run if the first five go well. Could be the start of something interesting :)
 
Hey Jason, something to think on. First wholesale deal I did kinda worked out the same way. He was selling em for a little more than I was retailing a very similar knife for. He had several customers ask him why they should buy from him as opposed to ordering the same knife from me when it was a little cheaper from me. The answer of course was they could hold em in their hand and pick from several as opposed to waiting for a custom order from me. However, we ended up adjusting prices so that we both retailed a similar knife for the same $$$. Our problem was that we were both pretty big fish in a small aquarium. So folks that would know of him knew of me and vice a versa. You might not have that situation if you are working in a bigger market than we were. Ended up tooling his sheaths basically for free. That way he was still getting a good wholesale price, I was making money and his customers were happy with the new price structure.
 
These are the issues I am really interested in reading about. I am new to knife making but in past lives have sold industrial products thru dealers and stocking distributors. Manufacturers typically set a list price and if they sell to an end user that is the price they sell at. A stocking distributor receives a % discount off of list - he is free to sell at any markup, even above list price, that he wants. Keep in mind that very few distributors want to sell features - they only want to sell the lowest price. They usually want at least a 50% discount, 30% of which they will give away to "meet or beat competition".

The problem is - how do we, as custom knife makers, compete with the Wusthofs and maintain an acceptable volume and profit margin.

Tim
 
You must log in or register to reply here.
Back
Top