Cost of "super steels"

Dan of Bazz Clazz

Dan of Bazz Clazz

Joined
May 10, 2017
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This is more a business question than a knife making question. I don't make knives, and don't plan to, just curious. And I know you guys will know!

Am wondering how many factors go into the increased cost of a knife made with one of the new "super steels". Ya, I know some will say, the damned steel costs a lot more dummy. But apart from the obvious, I was more curious about the hidden business costs involved with working with these steels.

Would think that additional costs like the following could come into play:

If you are machining the steel, do you go through bits faster? Or do you need high priced bits?
Higher cost abrasives (diamond?) on wheels, belts, and disks?
Do they take appreciably more time to work, sharpen, and finish?
Are they more expensive to forge or heat treat, due to higher temps or times needed?
Are they somehow easier to screw up to where you need to go back to square 1 and manufacture it, or just take a longer period of time to rehab a mistake?

Would think all of these would come into play for production costs, but what the hell do I know. My only experience is trying to sharpen a couple of them at times.

Look forward to you edjumacating me. :)
 
Not uncommon for the some steel to cost $25-30 for steel, $16 for heat treat and another $10-15 for abrasives.

So you can have up to $50 before you even start grinding.
 
Depending on what kind of steel to be compared. For instance , 3V vs 1095

3V going to cost like 10 times more as a raw material

Will require much more expensive equipment to heat treat, like precise control kiln, pricey stainless foils , and some kind of freeze treating equipment.

It will significantly harder to grind, likely ti require higher end belt like ceramic to get it done. And it will be way much much harder to hand sanding like 10 times harder...

But if you compare 3V to D2 the different will be much less. Just the cost of the raw steel and properly difficulty in hand sanding. Others aspect are pretty much very similar tho.
 
The value of a "super steel" is more than the increase in price.
Lets looks at two identical knives, assuming all belts and HT costs will be roughly the same:
1) A chefs knife made with 1095 and Micarta handle. Materials cost $25 ....Probably can get $100-$150 for it.
2) Same knife make with CPM-S35VN. Material cost $45 .... Probably can get $200-$250 for it.

As you see, the value increase is far more than the extra $20 in material cost.

This really starts to increase when you use things like Hitachi steels. You and I knew that these steels are not magic, and W2 can make a knife just as good as Hitachi white. But a W2 Gyuoto may fetch $300 and the same knife in Hitachi blue or white may fetch $600. The purchaser wants to buy the big name steel, and expects to pay more for it.
 
Most of the super Steels contain a lot of vanadium. The Vanadium carbides that forms in the steel are abrasive because they're harder than the tungsten carbide used to mill the steel and harder than the various abrasives used to grind it. This reduces cutter life and belt life considerably.

They are also considerably more difficult and time-consuming to finish.

All of that said the increase in the value of the finished work more than offsets these additional costs.
 
Sure, there is added cost. From the cost of material to the added wear on tools(mostly increased wear on belts). But that is fine with me. I use 2 steels exclusively! CPM3V for my hunting & outdoor blades, & CPM20CV for my chefs, wet use and folder blades(currently working on folders.) Although I am only a hobbiest, I do warranty the blades I sell. I tell people

"If any of my knives fail do to use or abuse, it's covered. If you cut it in half with a torch.... IT'S COVERED!"

With these CPM steels and the heat treat that I get from Brad at Peters, I am absolutely confident in my blades. But I don't do this for a living. I make knives for the love of the craft. I sell them to keep the cost of the hobby out of my pocket as much as possible.
 
I had a custom folder made with an S-90-V blade, and the maker used 6 6ft belts grinding the laser cut blade. I furnished the steel and had to order a minimum of 6’. The steel had to be heated to red hot to shear my chunk off the sheet.
Higher end steels are harder to find in a variety of sizes and are usually ordered in small quantities. Heat treating often requires running small, fussy batches. Custom makers don’t stock pile the expensive stuff, and they don’t often prebuild knives using the expensive stuff.
 
I have the same warranty as One Armed.

I hope you use the knife properly, and have enclosed a use and care sheet .... but even if you abuse it:
If the blade gets chipped or dull - I will repair it and sharpen it.
If the handle gets dull or breaks - I will buff it or replace it.
If you damage the knife beyond repair - I will replace it.

Getting a good price, and confidence in the materials and HT allow this type warranty.
 
yeah if you are hand rubbing a vanadium carbide blade good luck... I won't finish those above 120, or 220 at the max and that's a belt finish that takes a lot of extra time.
 
i just posted somthing the otherr day that is fitting here. i might only spend 15 bucks a lb for my steel but i do use hundreds of dollars on saw blades and grinding belts just to throw half of the steel away. you see till i lay out a sheet and i try to waste as little space as i can here starts the bucket of scraps then i profile at the grinder more dust in the bucket. pre HT grind and post HT grind. i do mostly kitchen knnives and they are ful hight flat grindand distal tapered. that really gets the bucket filling faster. in my book even super steel is cheap compared to the rest of the knife
 
Stacy E. Apelt - Bladesmith said:
The value of a "super steel" is more than the increase in price.
Lets looks at two identical knives, assuming all belts and HT costs will be roughly the same:
1) A chefs knife made with 1095 and Micarta handle. Materials cost $25 ....Probably can get $100-$150 for it.
2) Same knife make with CPM-S35VN. Material cost $45 .... Probably can get $200-$250 for it.

As you see, the value increase is far more than the extra $20 in material cost.

This really starts to increase when you use things like Hitachi steels. You and I knew that these steels are not magic, and W2 can make a knife just as good as Hitachi white. But a W2 Gyuoto may fetch $300 and the same knife in Hitachi blue or white may fetch $600. The purchaser wants to buy the big name steel, and expects to pay more for it.
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Definitely get into the realm of consumer perceived increase in value where you are able to charge more. Some won't even think of buying a "standard steel" knife any more. They insist on everything being high end and are willing to pay for it. That's where lots of makers want to target their market, to the high end consumer willing to pay top dollar; which is why we have Rolls Royce, Ferrari, and Lamborghini and those types of auto makers. But that comes with a limited production level. You are selling exclusivity above and beyond product quality.

I'm trying to get a sense of your potential profits using your #1 /#2 example. #1 materials costs are 56% of #2. for the sake of argument let's call it 1/2 of #2. That is the money you put up or invest just to have the material to make a knife. With retail prices you use, #1 has a ultimate 400 - 600% mark up above your raw materials costs. With #2, you are only seeing a 400 -550% ultimate mark up. So they start with close to the same potential profit margin for you, the expensive #2 knife having a slight disadvantage right off the bat.

That 400 - 600% gross markup is what determines how profitable you knife will be. You then add your time and shop materials, (ie: Production Time, Tools, Abrasives, Glues, Finishes, Rent, Utilities Phone, etc.) That is the area where you ultimately "Pay Yourself" and pay your expenses for making the knife. If you can produce a super steel knife for the same relative expense percentage as a 1095 steel knife then you can make either version and see the same percentage return on your investment. But if you are doubling your production expenses to make a Super Steel knife, you get a lower rate of return on your investment. It is possible that you make more dollars on a sale, but your overall percentage of return on your investment is lower. Meaning you get a poorer return on investment with the super steel and are accepting greater risk in doing so.

All of this is assuming you are operating as a smart business man, and are calculating the time you put into making the knife as an expense, with a profit margin on top of that. You have to pay someone to make the knife. You do it or pay someone else to do it. That is an expense that cuts into your profit margin. If you are looking at the gross profit as "your payment for doing the work", then you aren't thinking about a profitable business that can grow, you are just working for a paycheck that varies greatly week to week, and your business will never really become a stable ongoing operation.
 
Nathan the Machinist said:
Most of the super Steels contain a lot of vanadium. The Vanadium carbides that forms in the steel are abrasive because they're harder than the tungsten carbide used to mill the steel and harder than the various abrasives used to grind it. This reduces cutter life and belt life considerably.

They are also considerably more difficult and time-consuming to finish.

All of that said the increase in the value of the finished work more than offsets these additional costs.
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What Nathan said,^^^ when I started making knives I asked the late Bob Loveless, how to price them? He said, add up, Steel, belts, HT, handle materials, bolts etc & Sell each knife for enough to make three more knives or higher!
 
Dan,
I think you are looking at it in a factory production cost analysis level. For a small time knifemaker, those percentage comparisons make a specious argument.

It works more like this for the average knife guy:
You invest $25 and make $75 to $125 profit.
You invest $45 and make $155 to $205 profit

Same basic time and shop expense to do the knife .... twice the profit.

Now, if it takes 8 hours work to make a knife, and you do that five days a week. you can make $375 to $625 a week one way, or $775 to $1025 the other. Which sound like a better way to make money?

Obviously, there are many other expenses that come out of that gross profit number.
 
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Time and efficiency make or break a knifemaker in terms of profit. If you are using files and sandpaper, compared to a fully equipped machine shop, you cannot just charge more because it took you longer. There is a max people will pay for any knife and how long you took to make it isn’t a billable variable. Unless you are someone like wolfgang loerchner. But almost none of us are.
 
Stacy E. Apelt - Bladesmith said:
I have the same warranty as One Armed.

I hope you use the knife properly, and have enclosed a use and care sheet .... but even if you abuse it:
If the blade gets chipped or dull - I will repair it and sharpen it.
If the handle gets dull or breaks - I will buff it or replace it.
If you damage the knife beyond repair - I will replace it.

Getting a good price, and confidence in the materials and HT allow this type warranty.
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Amen! Well said.
 
butcher_block said:
using the 400-600% mark up on a knife vs the base steel is a joke even tho you come back about the belts and tooling. makes it sound like makers really do make $
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You have an XHP nikiri for sale at $650 that I would guess has $60 in blade/handle materials. That is a gross profit of a bit over 1000%.
Once one factors is belts, tools, electricity and propane, rent, taxes, etc., it gets down to hard to make even 100% profit. Your own salary is never in the equation. As you say, it is hard for most folks to make any real money making knives.
 
I agree. The only real way to make money with knives is to make your own craptacular DUMBASCUS steel, and dupe people into thinking it not only competes, but magically surpasses modern high alloy tool steels. Then sell them at an grotesque amount of money.... ($1000, $2000, $6000!), because it's a PRIVILEGE for someone to buy one of YOUR knives.

Note: Not referring to anyone here guys & gals. Just making a statement.
 
JTknives said:
Wait, we are supposed to make money on knives? I make money on every knife right up to the point when I calculate how much time it took.
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I bill $125.00/h for my real job for direct client time. However, direct client time tops out at 4h/day, on good days. No way would anyone pay that for a knifemaker. A simple skinner would be $500.00 plus materials. No one is getting rich making knives.
 
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