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The Business of Knife Making A forum dedicated to all aspects of running, managing and legal operational issues relating to the custom knife making and custom knife selling industry.

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  #1  
Old 02-04-2004, 08:14 PM
Les Robertson's Avatar
Les Robertson Les Robertson is offline
 
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Makers and Dealers. A business partnership

Do makers need dealers? No.

However, in todays exceptionally competitive market. A professional custom knife dealer can give you a competitive edge.

As for Discounts, I'll tell you what I get right up front. Established makers 25% (yes there are exceptions). New makers 30% (yes there are exceptions).

The main question(s) you as a maker need to ask is "what are you going to do to improve my position in the knife market(s) I want to make knives for?

While most of the established dealers carry a wide variety of knives. Some have specialties.

For instance one of my specialties would be tactical knives. Another would be big fixed blades.

While I can and have sold just about all types of custom knives. If you were a maker who specialized in replica antique bowies, I probably wouldn't be your first choice. Honestly, I would tell you that up front.

You should view the discount you give dealers as part of an advertising budget. When you run an ad in a magazine, the quote you price on size of the ad, placement of the ad, how many times you run it, how many colors the ad will have and price to create the ad.

So you should ask dealers similar type questions:

1) How many shows do you set up at...not meerly attend.

2) If you don't set up at shows how will you put my knives into potential customers hands.

3) How will you position me on your web site for maxium exposure.

4) Regarding the type of knife that you sell, what is the dealers position in the market?

4a) Work with a dealer who can maximize your position in a particular market. However, first you need to know what your position is in that market.

5)Is the dealer asked to judge at shows. I mean major shows..like the Blade Show or asked to judge knife makers for entry into the Knifemakers Guild.

6) Are they routinely interviewed for articles in the knife magazines. Regarding show critiques, market trneds, up and coming makers, etc.

7) Do they conduct seminars on trends in custom knives?

8) Have they started their own Brand of Custom Knives?

9) Is their advise routinely sought out on matters of Markeing, selling strategy, pricing, materials to be used and critiquing of their knives by your fellow knife makers?

10) Have they written a book on collecting custom knives? Ok, trick question...Im the only dealer that has done that.

The percentage you give should be based on what you get in return. Example, you have two dealers,

One has an internet site and travels to shows...doesn't set up, doesnt talk about your knives or put your knives in clients hands.

The other dealer has an internet site, sets up a 6-9 shows a year to include some of the major ones like New York, Blade, Guild, etc.

Which dealer should get a bigger discount?

Don't be afraid to ask for what you will get for your discount. Base the discount on what they can do for you?

Lastly, this relationship should benefit both parties equally.


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  #2  
Old 02-15-2004, 01:49 AM
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Keith Montgomery Keith Montgomery is offline
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Re: Makers and Dealers. A business partnership

Quote:
Originally posted by Les Robertson
Do makers need dealers? No.
I know I am picking a very small part of this post to comment on, but I don't fully agree with this statement. There are some makers that i do feel need dealers. They need the business acumen of the dealer, because they have little or none themselves. They know how to make knives, but little or no clue as to how to market them.


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Old 02-15-2004, 11:36 AM
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Les Robertson Les Robertson is offline
 
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Hi Keith,

I don't fully agree with my statement either. Although I have heard more makers than I can remember tell me that.

I was speaking in pure black and white terms.

If there were no dealers than makers would still be able to sell their knives.

That being said; most successful business's have "experts" either internally or outsourced.

As you have pointed out, in theory it would benefit a maker to work with a dealer. As in theory the dealers have more of a business mind set.

Now being able to sell custom knives is a completely different thing than providing sound business advice.

A good sales person is generally out going, good sense of humor, excellent product knowlege and has the ability to answer and remove objections, leading ultimately to closing the sale. People who have this ability can make a very good living as a sales person.

This does not mean the salesman understands the business.

So you are correct Keith. It can be advantageous for makers to work with dealers.

My advice to the makers is to figure out where you are at, where you want to go and how you are going to get there.

Then pick the dealer that will give you the best chance to accomplish your goals.


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Old 02-17-2004, 11:25 AM
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Kevin Wilkins Kevin Wilkins is offline
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Excellent post Les, worth printing out in fact!!!!


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  #5  
Old 02-17-2004, 07:26 PM
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Les Robertson Les Robertson is offline
 
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Hi Kevin,

Thank you for your kind comments. The point of these threads is to educate and inspire.

Also to show that all dealers are not equal. So it pays to ask questions before the relationship starts.


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Old 02-18-2004, 01:14 AM
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Kevin Wilkins Kevin Wilkins is offline
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Thank you Les! I realize it takes a lot of time write such posts and draws on your long experience in the field. Your point about asking questions is also well taken.

Do you think it would be appropriate for a maker considering a dealer to ask other makers who are already represented by said dealer if they are happy?

I see the knife dealer / maker relationship somewhere between a wholesale / retail business arraingment and the relationship between an art dealer and artist. it's some of both I think. In retail a buyer buys the goods and if they dont move, will want mark down money on top! Pure hardball. Otherwise next year they buy shirts from someone else. The 25-30% margin in knifedealing is real small too. Art Galeries take a bigger cut. Tough business really.


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  #7  
Old 02-18-2004, 08:44 AM
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Les Robertson Les Robertson is offline
 
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Hi Kevin,

By all means the maker should ask other makers about the pro's and con's about working with a dealer.

I hear from makers I represent on occasion that a maker is "checking up" on me.

Regarding selling a makers knives, every dealer has strengths and weakness's. The amount of the discount is irrelevant if the dealer cannot improve the makers position in the market(s) they compete in.

Also, when you are going to ask around, try and find makers who sell similar knives to what you are making.

Regarding your view of the dealer/maker relationship.

Personally, I don't see myself getting the "wholesale" price. The discount I receive is due to my position in the custom knife market. Coupled with my ability to help a maker improve their position in the market.

So I don't have the "Hard ball" approach that some delaers do. If a maker I represent knives aren't selling. Then I get with the maker and we figure out why.

T-Shirts are mass produced items (as are most retail products). As such price is generally more of a concern.

I wrote about this in a previous post. Most makers want their work to be classified in the "art" category. As such it is up to them to insure that their work is "dumped" by a "Hard Ball" dealer.

With the ability to search forums savy buyers can find out aftermarket trends on a makers work. As well as which dealers with reduce the price of knives to sell a "slow mover".

Of course the very savy buyers understand two things:

1) Those dealers who will reduce the price to sell a slow mover. Has no interest in helping either the collector or the maker maintain the knife's value in the aftermarket.

2) Those makers who continue to support delaers who do this. Are letting their buyers know that it is more important to sell this dealer knives.
Than it is to continue their position in the market.

I keep very close tabs on this. I know it has an impact on my "business" decisions.

Each maker will have to decide which business "model" is best for them.


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  #8  
Old 02-27-2004, 05:43 PM
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David Johansen David Johansen is offline
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Les,

I hope this question is not too broad. I am a fairly new maker who is just starting to get orders (currently just from coworkers who have seen the current project I am working on). How would a maker judge if their work is to the level where a dealer would consider working with them? Also, how do you recommend starting to market? As I have done no marketing at all except for word of mouth what is the next step you would recommend? A website maybe? If so then how would you recommend letting others know it is there? Again if this question is too broad please let me know, but any insight on this would be appreciated.

I was not sure if I should post this as a new thread, so if you feel it should be let me know.
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  #9  
Old 03-17-2004, 08:48 PM
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Steven Licata Steven Licata is offline
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As a full timer I find that dealers are a great help to me. If I am set up at too many shows then I loose time in the shop. The shows are also a strain on capitol. I hear stories from my dealers of private clients that visit them and buy my knives in private viewings. There are people who just do not attend the shows. Some of the private collectors who have purchased my knives are celebraties. Yes we all love those celebraties with lots of disposable income to buy art. With any industry "who you know" can be the pivitoing point in making a sale. There are just soo many people that I will meet and know. The dealers are a great resource for word of mouth.


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