Sal, how has the internet changed the way you do business?

Lizabelle · Nov 4, 1999

Hey!

I'm doing a research paper for my internal business class on "how the internet has affected the knife business." Please tell me what you can about how the internet has changed the way you do business. Details would be great!

If you prefer to not post here for any reason please email me. Thanks!! Your help is much appreciated.

Bob Irons · Nov 4, 1999

Cool topic. The dynamics of business in the internet age are fascinating and fast paced.

Jim March · Nov 5, 1999

I first saw this question on the HI forum and answered in some depth there.

Jim

Sal Glesser · Nov 5, 1999

Lizabelle - We've had both positive and negative as a result of the internet and we're still watching closely.

On the positive side;

1. information and opinion is more readily available. Not only from companies, but more important, from end Line Users (ELU).

2. The Forum has permitted direct communication with knowledgable people in the Cutlery Industry. This has proven to be valuable in new product development and improvement needed in existing models.

3. It has introduced a potentially larger market by reaching ELU that might otherwise not be aware of our products.

4. Email has provided convenient rapid business communication.

On the Negative side;

1. Deception problems - A number of companies can and do present themselves on the Internet as being Spyderco by using our tradmarked logos and words.

This confuses the potential customer and forces us to legal action to remove these deceptions.

2. Some companies that are selling Spyderco products offer prices to ELU that are so low, profit cannot be realized.

ELU see these prices and think that they can get product at those prices anywhere. When they see higher prices at regular dealers (trying to make a fair profit), these dealers are perceived as overcharging.

As a result, regular dealers will avoid stocking those items which hurts overall sales.

That is most apparent. If I think of some additonal effects, I'll re post or
email. Hope that helps. I would intersted in seeing a copy of the finished research project.

sal

Jim March · Nov 5, 1999

Interesting.

I think you'll find that the smaller companies operating purely or largely over the 'net are going to have completely positive opinions. I'm certain HI will, definately Speedtech, probably Mad Dog and others.

Sal seems to be describing a "struggle" between the retail side and the 'net side of sales?

Jim

SDouglas · Nov 5, 1999

The Net/Retail struggle would certainly have an impact on a manufacturer's MSRP and policies in regard to it.

On the one hand the MSRP needs to be set far enough above the Wholesale cost that a Retail Store can make a profit. At the same time Net Dealers usually operate with much lower overhead and can realize a profit at a considerably lower price.

Does the manufacturer set the MSRP based on the Retailers' needs?

Does the manufacturer try to enforce MSRP as part of their distribution agreements?

Does the ELU perceive that the manufacturer is inflating MSRP when they see lower prices on the Net?

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AKTI Member No. A000370

ghostsix · Nov 5, 1999

I like catologs.I have about a foot stack of them,but the net,allows research simply not available anywhere else.As Sal mentioned,you can E-Mail him with a question to influence a buying decision.He will answer you.This kind of access was unheard of a few years ago.DARPA did an amaxing thing,sure I phone,or write Mfgs.I like phone if questions are complex.The main thing is that choices have expanded dramatically.

Jeff Clark · Nov 5, 1999

As a consumer, the effect is that I'm buying more knives, technically superior knives, more expensive knives, and knives at substantially below retail store prices. I've gone years without buying any significant number of knives; however since I had a new need and started researching on the net I've spent around $500.00 in the last 6 months.

One particular effect is that I bought a Spyderco knife for over $100.00 recently. This absolutely wouldn't have happened if I had not interacted with Sal on this forum. Prior to this the Spyderco knives just looked like cheap ugly gimicks. The information on the net has shown me the exceptional quality of materials, processing, and design going into these weird hump-backed knives.

I generally don't even go into retail stores for things I can get on the net.

CORRECTION TO MY LAST STATEMENT.
I get things on the net if it saves me something like $10.00-$20.00 on my order. If I'm buying a single item that I can readily find on my way home from work I will buy it at the store if it doesn't cost me a "lot more" than on the net. For a frivolous purchase like a knife I watch my pennies, since I usually have no pressing need to justify paying above bottom dollar. Somewhere in the $10-$20 premium range depending on price of my item I choose between net and local purchase. If the premium is more than a third of the lowest price for the item I go for the cheapest source.

The result is that generally, only small purchases are made locally. All large dollar orders are made on the net.

If I were a manufacturer, I would figure the future is: bottom of the line knives in stores, top of the line knives on the internet.

[This message has been edited by Jeff Clark (edited 05 November 1999).]

[This message has been edited by Jeff Clark (edited 05 November 1999).]

Knife Outlet · Nov 6, 1999

Let me throw in a response to SDouglas from the perspective of an internet knife dealer.

The internet is new, it is changing everyone's life and the general tenor and makeup of future life with the internet is still cloudy in the crystal ball.

Reality is that the internet is here to stay and will become an increasingly important part of life and of every industry including the cutlery industry.

The internet is easily the most efficient means for promoting and distributing consumer products that has ever been devised so, yes, an internet dealer can get the job done with less expense and can be more profitable with a lower gross profit than a traditional dealer.

This has caused disruption in the industry because many people without much business experience have thrown up sites and offered knives for sale at margins that would choke a properly run business with good customer service. The gap between them and traditional cutlery retailers is significant. It's created a lot of distress among traditional reatail dealers. It's even created some distress among internet dealers but to a lesser degree.

The manufacturers have tried to relieve that distress as much as possible but it's an uphill climb. Ultimately, the consumers will spend their money wherever they they feel they get the best value. Some manufacturers (I won't name names but Spyderco is not among them) are waging all out war against the internet. It's curious because I see it as going to war with their very future but, obviously, they don't see it that way. I think they're wrong.

In the long run, the winners among the manufacturers will be those that learn to use the internet to their benefit and profit from it. I'm not being patronizing but I think Spyderco is one of those companies. It has done a pretty good job of juggling the opposing forces in the distribution channel. Those manufacturers who miss the internet train (or juggernaut to some people) will certainly lose market share to those that implement a sound internet strategy into their business plans.

In the long run, the consumer gets things his way. It always works that way. The cutlery distribution system of the future will address what consumers want, not what manufacturers or dealers want. You get to vote with your dollars and that's the vote that really counts.

It's an interesting dynamic from my perspective. I'm curious to see how it all plays out. Take care.

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Fred
Knife Outlet
http://www.knifeoutlet.com

Spidey · Nov 6, 1999

It has been said that the battle will no longer be between the big and the small, but between the quick and the slow (or the quick and the dead).

For an interesting article on how some companies are dealing with the internet, see the September 6, 1999 issue of Fortune. The article is no longer available on-line, unfortunately, but can be ordered. Try www.fortune.com or your local library. The article recounts stories from some different companies and how they are dealing with the internet. The basic message is that you have to cannibalize yourself (adopt an "internet" mindset) or the competition will eat you alive.

ghostsix · Nov 7, 1999

The net is not going away.Co.`s.that fight it will.Hey; is not an impressive introduction.No wonder that we don`t take females seriously.People have been very kind to you.I trust that you will return the favor by telling us your conclusions.I guess we know anyway,but it would be polite,if that means anything to you.And yes,I don`t want women in combat.

Tom Carey · Nov 7, 1999

Ghostsix,

Although I agree about the "hey" thing not sounding very polite I would like to point out that it is a very common opening among the nations younger generation and I do not think Liz ment any disrespect by it.

Regards,

Tom Carey

Carl Jacobsen · Nov 7, 1999

Hey, GhostSix: We're all at a polite get-together in Sal's house, and one of the topics in which Sal has recently shown particular interest is how to market knives to women. Please don't drive away the few that are here. It's obvious that you have issues in relation to women, as the hostility in your reply is all out of proportion to anything in the initial question Lizabelle asked. Please don't bring hostility into these forums...

On Topic: I see a lot of people rushing towards Internet sales, forsaking all else in the name of lower prices. I think that's a mistake, but I don't know how soon, or if, the public will realize it.

A lot of people seem quite happy shopping at warehouse stores, too -- for some things it's great, but it isn't the place to get service before or after the sale. A lot of people who want to pay $1 over wholesale for a knife on the internet, insisting they need no service, also want to be able to return the knife with no hassle or restocking fee if the liner doesn't lock at their preferred percentage of the way across the tang, or they don't like the color, or they just don't like the way it feels in their hand. These are things that a traditional store is equipped to deal with before the sale.

Lizabelle: If you do some digging through the archives in the main Forum, from around the start of the year, you'll find a long and hotly debated series of threads about Spyderco's pricing policies, which had just been changed in an effort to keep Internet sales from eating the retail storefronts. Sal came to BladeForums, initially, to try to explain Spyderco's position in the matter. Interesting reading...

As well, the thread Sal started a couple months ago about "What is Spyderco doing wrong" (don't remember the exact title) had a lot of discussion of business on the internet.

Peace...

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Carl /\/\/\ AKTI #A000921

Think this through with me ... Let me know your mind
Wo-oah, what I want to know ... is are you kind?
-- Hunter/Garcia, "Uncle John's Band"

JoHnYKwSt · Nov 7, 1999

Ghostsix,

I helped Liz write that post and she means no disrespect by saying Hey. My initial suggestion was pretty plain and she felt it needed some personality, some of her personality. So she added the hey and smileys.

What does her gender have anything to do with this, that you have to attack it?

And why WOULD she mean any disrespect by it? What would be her motive for being disrespectful?? Don't just jump on every chance you get to shun females.

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Johnny
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Chinook · Nov 7, 1999

"Hey" is only one of the words she used.

I also see:

"Please..."
"...would be great"
"Thanks!!"
"If you prefer..."
"please" again
"...much appreciated"

Hey, I wish more people were like Lizabelle.

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><CHINOOK*>
--
Cleverly Disguised As A Responsible Adult

Lizabelle · Nov 7, 1999

hey! (couldn't resist..sorry) first of all, i'd like to say thanks to everyone for sticking up for me! and now i'd like to point out that i'm not capitilizing anything...what does that say about me? anyway thanks again for sticking up for me....but my purpose of this thread was to get info for my paper. so please give me more!!!!!!!

i'm sorry if my informal style has offended...but i must say that i didn't think these forums were so formal all the time. and i did change the way i usually do stuff for that post. notice i capitalized and used more formal language. again please forgive me...i know i'm only a lowly woman. and only 20 years old at that... and in response to a certain person's email... i know english very well. when i have to use it correctly i do. if u want i can go through all of your posts and edit them. just say the word. anyway..please back to topic!!!!!! i'm in need of info...and i really appreciate all the info u've given me so far. it's helping me immensely!!!

liz

Double Edge Dave · Nov 8, 1999

Where I live,if someone says Hi instead of Hey,they are immediatly distrusted as yankee carpetbaggers! Lizabelle, don`t change a thing.We know what you mean.
David

AKTI#150

Sal Glesser · Nov 8, 1999

"Hey" is cool...that's all my kids use, wife too. Modern terminology. Even we old folks gotta bend...or break.

Yes, this is a very respectful forum, I'm pleased to say, thanx to the visitors.

Some really good info here. Learnin' alot.

Nice explanation Fred, you've been watchin' a long time'

Maybe Lizabelle will print ( or make available) her conclusions.

Lizabelle - Do you have the same Q on other forums? Are you getting good response?

sal

ghostsix · Nov 9, 1999

I`m not going to bend on this one.It is poor form,at best.Most of the world does not have access to a well stocked cutlery shop.The Army has PX,and MIL. Sales.They do have Spydies.For the rural,net,or catalog is the only way to buy.Only the net offers different opinions upon which you can take your guess.I am a curmudgeon and a mysoginist.You may wish to take that into account,ask my wife.

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JoHnYKwSt · Nov 9, 1999

Ghostsix,

Over on the Cammilus Forum, http://www.bladeforums.com/ubb/Forum21/HTML/000122.html .

You continually harass Liz, you degrade her for being a woman and say that she has poor English skills. First off, she's an English tutor at her school, and second, maybe you need to go back to school to brush up on some of your writing skills. Are you really that hard headed? I really do not see what your problem is. The only one that needs to learn manners here is you kind sir.

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Johnny
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Sal, how has the internet changed the way you do business?

Moderator and Gold Member