Why do makers charge the prices they do?

Over the last 15 years my experience has been that makers figure out a price in 4 ways.

1) Acutal cost. This is to say, materials, + Labor + shop time + their profit margin.

2) They have a knife priced fairly and their friends tell them it's worth more than that. Of course these friends are just that. Their suggestion of raising the price is well meant. But as my Partner Bob Neal says "what happens when all your friends have one"?

3) A fellow knife maker looks at the knife and says "you should raise your price". Now this is better than a "friend" telling you to raise your prices. But only slightly, a lot it depends on who that maker is. If they have been around for a long time and know what they are talking about, perhaps you should look at raising your price. However, beware of Greeks bearing gifts. The other makers intent may be for you to raise your price so your in the same price range as he is. Then they can tell their customers, "can you belive that new guy asking established maker prices".

4) The Aftermarket can also influence a maker's pricing.

The best way to establish price in my opininon is the first method. This allows several vairables to come into play. That will allow you to increase your profit margin without raising your cost to the customer. Also, when you do have to raise your prices you related it directly to the raise in cost of materials and shop costs (increased cost of elecricity or cost of grinding belts go up, etc).

If you are not happy about a price a maker is charging, then don't buy their knife.

If Lynn is really spending 8 hours on a 400 grit satin finish. Then he needs to learn a better method. This will lower his price and make him more competitive.

Lynn is not the first maker, nor will he be the last to ask more than what the market says his knives are worth.

However, if he does have a two year wait and people are lining up to buy his knives. Then one could see how he feels he is pricing his knives appropriately.

Only the future will prove if Lynn's pricing was correct.

Remember...Do Your Homework!

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Les Robertson
Custom Knife Entrepreneur
http://www.robertsoncustomcutlery.com

[This message has been edited by Les Robertson (edited 10-28-2000).]
 
L

Lynn Grififth Knives

Joined
Jul 30, 1999
Messages
724
My knives start at $145. My highest standard priced model is only $335 and that is for a 12" bowie knife. My knives are flat ground, which is more time consuming than hollow grinding, and uses more abrasive belts. The knife everyone is referring to as being $400 is $320 (after the discount). It is 9 1/4" long and 3/16" thick. It features stabilized wood, and a hand rubbed finish. It will also be limited to 25, and will be marked specially. I do not offer stabalized wood or hand rubbed finishes normally, as they are not cost or time effective for me to do so. I preferr to make knives under $335, and all my standard models are. My most popular model is $190. The spines of my blades do not have sharp corners. The lanyard holes are now chanfered. The handles are shaped by hand with sand paper (not a belt grinder), so there are no sharp ridges anywhere on the handle. I feel my knives are worth the price I charge for them, and my customers around the world seem to agree. Those that have complained about my prices are not my customers, and would probably not be no matter what my knives sold for. I have a 5 day return period on any knife ordered from me, so that if someone does not feel the knife is worth the purchase price, they may return the knife after inspection. I have not in 13 years had a customer ask for money back on a knife. Average selling price of knives sold in the last year is $225. I hardly think that is out of line for what I make.


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Lynn Griffith-Knifemaker

griffithknives.com
GriffithKN@aol.com
Griffith Knives Forum
 
Ok, maybe somebody can clarify some points for me...please
smile.gif
Lets take a basic 4" drop point knife. What is the average time it would take to hollow grind it, and how long would it take to flat grind the same blade (nothing else, just the grinding).

Now, for a complete knife, (assuming good quality) will a flat ground, bead blast, g10 knife be worth more than a knife that is hollow ground with stag handles and a guard or bolsters and satin or mirror finish? Which knife 'should' have more labor involved?

What it comes down to is this :
Assuming quality is equal, is it reasonable to assume a 200 dollar flat ground, bead blast, g10 handle is a better value than a hollow grind, stag handle, stainless or brass guard or bolsters for 150 dollars?



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Richard
icq 61363141
Just some knife pictures
http://albums.photopoint.com/j/AlbumIndex?u=110070&a=4518795
UPDATED and REVISED
 
I have to agree with Richard here. And I have another question... What about charging $10-20 more for different colors of micarta or g-10 when it all costs the same? It seems to me that is just a scam for more money. I have talked to a few of Lynn's customers (present and former) and they all have said the 2 year wait is pretty much BS. Yes, the prices for his basic knives turn me off, but his ego and business practices are far worse. Because of that, I wouldn't buy his knives even if they were appropriately priced. The man has a huge "i'm all that and a bag of chips" problem. He is NOT all that as is evidence by better makers selling knives of better quality for less money. I will continue to tell people to beware what they by. And Les, I have done my homework, and that is the reason I can say all this without any regrets. I'm outta here. Bye Bye.
 
Phillip, glad to see ya popped in, but I was hoping you might have answered my question also
smile.gif


I seriously want to know. 4" drop point (grind only). How long to hollow grind...how long to flat grind. Im sure this will vary from maker to maker, but on average...does a flat grind take 5 minutes longer? 30 minutes, 2 hours?? Somebody please inform me.



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Richard
icq 61363141
Just some knife pictures
http://albums.photopoint.com/j/AlbumIndex?u=110070&a=4518795
UPDATED and REVISED
 
Richard,

As with most things, it depends on the makers skill and/or their equipment.

I know makers who can do a hunter from start to finish, including heat treating, with a guard, stag and a satin finish in 4 hours.

There are other makers who may take 12 hours to make a similar knife.

Guys, Phil hit the nail on the head...If you don't like the guys work, don't buy it. On the collector side of the house I don't see that there is a real need to get into a pissing contest. Unless the maker has done you wrong. If that is the case..Good Bad & Ugly is the place for it.

I do have to agree, I don't see a reason for a difference in the cost of G-10 or Micarta based soley on it's color.

Richard, should a hollow ground, satin finish, knife with a stainless guard and Stag cost more than a hunter with a flat ground blade, bead blast finish, no guard and micarta or G-10, unless it says Loveless on the knife..Yes.

A guard, satin finish and Stag add to the price of the knife. Do your homework, compare the two knives and buy the one you like the best.


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Les Robertson
Custom Knife Entrepreneur

http://www.robertsoncustomcutlery.com
 
Flat ground Vs Hollow ground: I would adventure to say that flat grinding takes about 15-20% longer than hollow grinding, INITIALLY......however...it is much easier to finish a flat ground blade and some of the time expended in the beginning can be made up here.....you can skip grits a lot easier in flat grinds than in hollow grinds. Of course there will be someone posted soon hereafter who will say this is heresy... My opinion...and not those of the moderators or anyone else......
smile.gif
 
Why do knifemakers charge the prices they do?
In a some cases I believe it's simply "because they can".
The current knife market and economy are the strongest in history. That will change in time. It will be interesting to see the knife market during the next recession.
I love going to knife shows and seeing the progress in a knifemakers work from year to year. Sometimes it's amazing how well that do in a short time. It's also interesting in seeing how so many people can be hyped into buying certain knives.
What bothers me the most is when i see increases in price with absolutely no increase in quality.
Les, I liked your post in your forum mentioning the benefits of educatimg knife buyers. I can see how it could possibly help you as a dealer.
I beleive it's the lack of education
on the part of the buyer that keeps a lot of knifemakers work selling and selling at prices that, if based on quality, are downright silly.
But quality has nothing to do with demand now does it?
I guess i'm just old fashioned. Quality and workmanship will always be the most important consideration.


[This message has been edited by TomW (edited 10-28-2000).]

[This message has been edited by TomW (edited 10-28-2000).]
 
I feel it takes alot more talent to do a pleasing to the eye hollow grind that it does to do a flat grind. Having done both I feel hollow grinding to me is harder and easier to screw up than flat grinding.
 
Tom M and CJ,

I agree with both of you that, while I have never done any kind of grind. After talking with more makers than I can remember, I belive that the hollow grind, especially a double hollow grind.

This is why I make sure to mention it in the description of the knives on my web site.

TomW, doing my "homework" was something I started as a collector. I continue to do my homework every day. I do this for as I know with me and most custom knife dealers that if you remove the very thin dealer layer, you find a very hard core collector.



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Les Robertson
Custom Knife Entrepreneur

http://www.robertsoncustomcutlery.com
 
I agree prtty much with the statements Les and Tom made. When I was finally able to make a knife worth selling the price came from the time, materials and labor that went into it. My labor wasnt worth much then I think about 45 cents an hour. My labor is much more currant since quality is much improved since my first sale.

I have had other makers purchase my knives for resale and refer buyers to me because of quality and very resonable prices for my work. Makers have told me I need to raise my prices. I have largely took this with a grain of salt since Im not losing money with my currant prices and I tend to think if its not broke dont fix it.

I flat grind everything and having never hollow ground anything cant say which is faster to grind. Frankly I never gave it much thought because it takes me about 15-25 min to grind the knife freehand flat. I can however see where Tom saying its easier to finish a flat grind is 100% right on. It is definately easier to finish a flat surface than a concave surface. Finishing to 400 grit satin takes about hour if I have only taken the blade to 280 grit on the grinder and thats if there are some stuborn scratches. It takes even less time if Ive take the blade to 400 on the grinder.

I guess it comes down to Les' statement on things being worth what someone will pay for them.

Arthur D. Washburn
ADW Custom Knives
 
Art
If the quality of your work has improved isn't it the next logical step that the price could go up if the market can bear it? If you feel they're undervalued in comparison to similar knives by your peers and they feel the same way isn't it something you should seriously consider?
 
Pricing is difficult at first until you come up with a good idea of what the true costs involved are. Most people think that the price of raw material is the only cost, it ain't so. I break down my costs in the following areas.

Steel, handle scales,guard materials, pin stock epoxy, leather, magnets(if used), heat treating, and overhead. It is the overhead portion that is most difficult to pin down because it includes heat, electricity, insurance, inventory costs(I often have $10-$20,000 on hand in materials and finished goods),phone, internet, computer, programs, printer, printer supplies, paper for flyers, postage, longdistance for customer contact, parcel shipping and insurance cost, show costs(often thousands of dollars per show), and car milage running around picking up and dropping off materials, and last but not least consumable tooling(includes belts,tool bits,saw blades,sewing needles,drill bits,buffing compounds etc).

Keep this in mind when you begin to look at costs.

Like Les says if you think the price is too high don't buy the knife, if you feel you are getting value for your money go ahead.



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george
www.tichbourneknives.com
sales@tichbourneknives.com


 
Knifemakers in general MUST be charging too much 'cause I read about them all the time in the high society pages, living the high life and driving around in Ferraris, living in mansions, and dating supermodels. Where could they possibly get all that money? I for one am going to buy only production Old Timers. I'm tired of subsidizing the extravagant lifestyle of custom knifemakers. And from what I heard, they only work about 3 days per week and then only half days at that. It's getting kind of ridiculous, don't you think?
rolleyes.gif



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Hoodoo

I get some pleasure from finding a relentlessly peaceful use for a combative looking knife.
JKM

[This message has been edited by Hoodoo (edited 10-29-2000).]
 
Hoodoo,

I belive your statement is incorrect. You seem to be confusing the custom knife makers with the custom knife dealers.

As I am reminded all the time that I do not have a "real" job!

By the way, has anyone seen the keys to my Porsche 911?


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Les Robertson
Custom Knife Entrepreneur

http://www.robertsoncustomcutlery.com
 
Well Les, I hope you don't mind, but I'm going to throw in my 2 cents worth in here too.

Setting a price for a knife can be quite difficult. On one hand, you don't want to charge too much. On the other hand, you don't want to charge too little and get very little in return for your hard work.

Having just recently gone full-time into knifemaking, I decided to try a little experiment. Some of the guys on the forum can fill you in on how it has affected them. When I get an order for something I've never done, I charge a rock-bottom, almost zero profit price. I do this because I'm not sure if I can make the knife economically, and to see if it's something I might add to my current line of sellers.

So, that first prototype is a real steal. After I've made the knife, I sit down and figure out how much it's worth to me (how much time and materials I've got in it). Then, I price it with those things in mind. How much would I be willing to pay for it if I were a customer? This is a fair method, because I'm a knife knut myself. That's how I set the price on knives I'm already making and selling.

Then, I count on customer bargaining. Some of you folks have said in this thread that 'if you don't like the price, don't buy it'. Well, what ever happened to dickering? No price is set in stone, as far as I'm concerned. It would tickle me if a customer challenged my price and made me justify it! As it happens, most of the time when I quote a price, the reaction I get is 'huh, did you say XXX$$? I'll take one'. Not bragging, just admitting that my pricing is still competitive, even after I inflate it to what I think the market will bear. Not a very scientific approach, more of a gut level instinct kind of thing.

Now, I'm not getting rich, but I can pay the bills. I'm new at this full-time making, and open to new ideas. That's why I'm here at the forum. To learn something. And hopefully, to add at least a little perspective to these conversations. I hope I haven't muddied the water.
 
Guys,

There seems to be a misunderstanding here.

Go back and look at my 1)way to figure out how to price a knife.

The Profit part of that equation is the part you need to pay your bills, buy food, live off of and other essentials need to run both your business and your life.

Perhaps we need to distinguish between Gross and Net profit! Net is the money left over after you pay for all of your expenses. If you are a coporation, then your salary is an expense (at the 15% taxable rate). If you are a Sole Proprietor then it is not an expense and it is considered part of your net profit (taxed at a minimum of a 28%).

Note, a LLC gives you the same tax dis-advantage of the Sole Proprietorship. It just reduces your liability against what can be seized in a law suit. For those of you who have not been paying attention to the firvilous law suits currently plaguing the court systems, you should consider becoming a LLC.

If it is a business...then treat it like one!



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Les Robertson
Custom Knife Entrepreneur

http://www.robertsoncustomcutlery.com
 
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