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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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  #31  
Old 02-02-2004, 08:59 PM
Larry Harley Larry Harley is offline
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easy les

Once again your myopic view of the custom knife market skews the value of your opinion.

(myopic:showing a lack of foresight or long-term planning


if by myopic u mean i dont set around and try think of who i can do and how many times i can do them yep i,m myopic)


Scare, is that the word you used...Scare.

Personally I have never used a weapon, threat of a weapon, bodily harm or threat of same to gain a discount.

(u know
i sleep alot better at night knowing u r EX army)

So what method do these "dealers" use?

(most of the time it consist of finding someone new with some talent and blowing smoke up there dress or an established maker w 1 too many knives on there table at the end of a show)



Larry, more to the point This is about dealers undercutting a makers price.


(if dealers started w a makers price to begin with then there would be no undercutting
ive never seen a dealer break a sweet sweat over a knife
something a maker does EVERY day
dealers by there very naturew live off the sweat of others peoples brow
and then want a discount!!!!!
if we as makers would gee and haw togather then this is what would happen
we can only make so many of these sharp pointey things
its a limited supply
but being the rugged indivuals we are we tend not to do that)


So put down the cherry flavored refreshment and try to focus on the topic at hand


(i happen to like cherry flavored refreshments
cheerwine is about my favorite
they r second only to grape nehi)
harley
darth possum
p.s.
les u are so easy
even in your older declineing yrs all i got to do is dangle the bate
ha ha ha


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  #32  
Old 02-02-2004, 11:07 PM
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KNAdmin KNAdmin is offline
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It sounds like what you're insinuating is that every maker who is good at making knives is also good at selling them. I disagree ... truth be known, so do you!

For a maker reading this ...

Do you think you can consistently sell your own work better than Les or another high level dealer can?

If you can answer "yes" to that question, then your decision is made. Is it not? I mean, why even read this forum?

I would point out, though, that you might want to bring your money you're saving on that discount when you make your play. I say this because I know for a fact that several high level dealers are spending as much as $10,000 per month on advertising and many hours a week on the phone with the magazine editors to get the press they receive for their maker's knives, not to mention e-mail wars and handling sales calls on their inventory, toll free numbers, etc.

If you can do it better, think you can out-sell them, think you can make yourself more famous and collected than they can, rock and roll!

In fact, I think I need to start a forum for makers to post their name in where they opt-out of dealer sales. This way, at least the dealers I work with, and the others who secretly read these forums will know who not to waist their time with in trying to contact or look for you at shows, also saving you time and embarassment from turning them down. I mean, why try to change each other's position, let's get them on the table and move on. Everyone deserves to save what little time investment they have in this busy world ... am I correct?

I'll bet collectors would love to see this list too. I know I would!

Alex


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  #33  
Old 02-03-2004, 04:30 PM
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Les Robertson Les Robertson is offline
 
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Larry,

So the "Scary" technique dealers use is to "blow smoke up a makers dress" or to buy knives from an established maker with too many knives.

First, I think you would agree as would most people who know me. Im not the type who "sweet talks" a maker.

As for buying knives from an established maker that has too many. That makes no sense. If he has too many. That means they are either over priced, their position in the market has weakened. Possibly they have reached a saturation point for their knives in the current market.

Larry all dealers have different criteria for the knives they buy. Just as those makers who do give a discount ususally have criteria as well.

As the saying goes, what is something worth...what you can sell it for.

Larry, as I have shown by relooking your comments. You have posts have little useable information. As such their merit is questionable at best. You appear more interested in stirring the pot than contributing to the thread.

So in the future please offer useful information or refrain from posting.


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  #34  
Old 02-03-2004, 10:44 PM
KitCarson KitCarson is offline
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I don't post much here but figured it was time to add my 2 cents worth. Hell, I don't post much anywhere since I saw long ago that too often you make enemies out of friends when you join a thread of this nature. With that said, I sure hope I don't loose any friends with what I say.

I'm a big supporter of working with dealers. Currently there are 3 that I work with. Les is one of them and has been for more years than I can remember. I've never regretted working with him or the others.

When they buy my knives they post them on their web sites. When they buy my knives on the secondary market, they post them on their sites. That helps me alot since I'm so bad about not updating my own web site.

I feel that a maker needs to research the dealers just as a customer would research a maker. Talk to them, check their sites out, ask questions. That he is making money off you is ok as long as you are making money off him. Personally, when I price my knives that price is based on selling it to a dealer, at a discount. That gives me some leeway on price when selling to my regular customers. New guys most likely will pay the full price, until they become "regulars".

FWIW, I had 3 calls this week from other "dealers". Told them that I already had three and couldn't supply them, much less a new one.

I've been making knives alot of years and there have been times, slow times, that having a few good dealers has kept the repo man away and put groceries on the table. They are customers, just like all the rest. Pressure or scare tactics? Not hardly. When they try that they soon become dealers of others, not mine.


If you are a new maker, imho, working with a reputable dealer is one of the best things you can do. If you are an old has been like me, working with a dealer is a good thing, especially if you don't go to alot of shows or are bad about updating your web site.





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  #35  
Old 02-04-2004, 06:55 PM
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Ed Caffrey Ed Caffrey is offline
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I can see the various points of view associated with dealing with purveyors. I agree that dealers must make a living too. Before I relay my experiences, let me say that dealers, as Kit said, are a valuable part of any maker's business, getting you through the lean times, and giving you exposure that you would otherwise not receive, so don't misunderstand the following.
I also agree with Larry H in the respect that some dealers DO scare younger (read less experienced) makers into giving them discounts. My own first experience with a dealer was the dealer walking up to my table and without an introduction or greeting stating, "I'm (business name intentionally left out), I like that knife (pointing to a knife on my table), but I get a 30% discount on any knife I purchase!" My response was to tell him if he though I was going to do that, then he was "a blood sucking leech. At the time it did sorta take me back, just the mannerism he approached me with, hence the obtuse response from me. But, after some later private discussion with the individual, we worked it out, and now he is one of my favorite dealers. Honestly, even now, I find it difficult to prepare to deal with dealers at shows, simply because I have always priced my work based on what I must have for it, and to tack on an extra 20-30% to make up the difference seems unfair to the collectors and general public.
In a nutshell, dealers are a valuable part of our industry, but it's also true that the makers are the backbone of that same industry. Therefore it will always be a give and take situation. The whole trick is to realize that with the give and take, it will some how always work itself out in the end. I suppose there is a difference between the terms "wholesale" and "retail"


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  #36  
Old 02-04-2004, 07:17 PM
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Les Robertson Les Robertson is offline
 
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Hi Ed,

I think the key component that most makers miss is that it is not a "give and take" between makers and dealers.

Makers and the dealers they work with should be a team.

While some makers are reluctant to give a discount. These would be the same makes who would balk at me asking them to pay to put their knife on my site as well as to cover the expense of taking the knife to the show.

Why would they be charged a fee for this? Because it is free advertising. How much would it cost a maker to attend 10 shows a year all over the country. Not to mention the exposure on a web site that has over 5,000 visitors a week!

How much is it worth to have a dealer who gets interviewed several times a year for different magazines. To mention you by name as one of the best or an up and comer?

How about that same dealer doing an exclusive series of knives and taking out ads with your knife in that ad. How much did that cost the maker? $0.00

How about a dealer being asked to write an article and supply picture(s) for that article. How much did that cost the maker? Again, $0.00

This is not to say that all dealers have this ability....they don't.

The key is to find out what the dealer can do for you. Then base the discount on that.

Im going to discuss dealer discounts in another thread.

Ed, a question for you. How much of a discount do you or would you give a good customer who bought 5 knives at a time or spent over $10,000 a year with you?

You don't need to answer here, just something to think about.


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  #37  
Old 02-04-2004, 11:20 PM
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Ed Caffrey Ed Caffrey is offline
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Les,

It's ironic that you mentioned that last question in your post, because I have had that situation occur many times. Example: An individual calls me up, wants to order, and asks me how much of a discount I will give them if they order 5 knives. If all the knives where the same, then perhaps a discount would be in order. On the other hand, if the person was someone who purchased that $10,000 worth of knives a year from me, it is very likely they would get a discount of some type. In general, my thoughts run along these lines: If a Maker takes as much care and effort to build the #5 knife of a lot, as they did the #1 knife in that lot, why would a maker be willing to accecpt less for that knife? If we put the shoe on the other foot, would you as a buyer be willing to accept 1/5 the workmanship and quality on the #5 knife versus the #1 knife? Probably not. The same would hold true for most commodities....... houses, clothes, cars.... I know I would not be willing to accept a discount on a car or truck in return for lower quality, so I'm willing to pay top dollar for a quality product that I know will serve it's function in an outstanding manner. Why would knifemakers be any different? I know those products I mentioned often times have huge mark ups associated with them, but most knifemakers are not the kind of people who think in the terms of "mark up" when creating knives. For most of us it's a passion and hard earned skill that we seek to improve thoughout our lives.......of course if all the maker want's to be is a businessman, that's OK too, but that will be reflected in the work he/she produces. The "personal touch" associated with that maker's work will vanish, and the knives will all begin to look alike. I've seen this happen many times over the years.
Your 100% correct about having to work as a team, but it's a team with two very different perspectives, one from the dollars and cents perspective, and the other from a true love of the art perspective. In a lot of ways, dealers and makers are an ideal combo in that they can learn a great deal from each other if they can get past the surface differences.
I still hold true to my previous statements about dealers being an important part of the equation, but I do differ with you about the "give and take". If there were no "give and take" involved, then this thread would not be happening.........dealers would not ask for a discount on a makers knives, and makers would not have to agonize or bargin over how much of a discount is acceptable in return for have a reputable dealer handling their work. I think the whole issue is that most knifemakers, myself included, have a difficult time thinking in terms of a businessman, and most dealers, who ARE businessmen, have a difficult time thinking in the terms of a Maker. So it boils down to trying to understand, and learning from each other, since both varieties are likely going to be around as long as the other.


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  #38  
Old 02-11-2004, 08:42 PM
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Keith Montgomery Keith Montgomery is offline
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Alex made a good point. Being a knife dealer is a business and if the dealer has a knife that isn't selling then the price has to be reduced to the point that it will sell. Dead stock is a bad thing and it must be moved. If a dealer makes a habit of selling knives for a lower price than the maker asks for them, then I can see that being a problem. If a dealer has to move dead stock, then I can't see any problem with a reduced price.

One thing a reduced price does do that is bad is that it tells others that the dealer is having trouble moving a certain knife or a certain maker's knife. This can give these people the impression that this maker's knives are not popular. This can cause the potential customer to have second thoughts about purchasing knives made by this maker. After all, if this maker's knives aren't popular, what would be the chances of reselling the knife if that a poosibility in the future. For that reason I can see why makers don't like to see their knives being discounted by dealers. Unfortunately a dealer's only other option is to hold on to the knife until it sells. At the full price this may never happen. Expecting this from a dealer is expecting too much.

As a collector, there is one thing that has been mentioned in this thread that bothers me and that is the thought that makers would raise their prices by any amount to make up for discounts that they give to dealers. It is my view that the maker should look at the discount given as a payment for the advertising and promotion of their knives that the dealer does. If they raise the price of their knives to cover these costs then they are in effect trying to get these benefits for free and at the same time over charging their direct customers. As a collector that is a disturbing thought.

When I purchase knives from a maker I do not look for a discount. Even if I were to purchase five knives at once, or $10,000.00 worth in a year I would not request a discount. When I order knives I expect that the price I am given is what the maker feels is a fair price for me to pay for that knife. If I agree, I order the knife. If not, I don't.


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  #39  
Old 02-12-2004, 01:44 AM
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Kevin Wilkins Kevin Wilkins is offline
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Quote:
Originally posted by Keith Montgomery
Alex made a good point. Being a knife dealer is a business and if the dealer has a knife that isn't selling then the price has to be reduced to the point that it will sell. Dead stock is a bad thing and it must be moved. If a dealer makes a habit of selling knives for a lower price than the maker asks for them, then I can see that being a problem. If a dealer has to move dead stock, then I can't see any problem with a reduced price.

One thing a reduced price does do that is bad is that it tells others that the dealer is having trouble moving a certain knife or a certain maker's knife. This can give these people the impression that this maker's knives are not popular. This can cause the potential customer to have second thoughts about purchasing knives made by this maker. After all, if this maker's knives aren't popular, what would be the chances of reselling the knife if that a poosibility in the future. For that reason I can see why makers don't like to see their knives being discounted by dealers. Unfortunately a dealer's only other option is to hold on to the knife until it sells. At the full price this may never happen. Expecting this from a dealer is expecting too much.

As a collector, there is one thing that has been mentioned in this thread that bothers me and that is the thought that makers would raise their prices by any amount to make up for discounts that they give to dealers. It is my view that the maker should look at the discount given as a payment for the advertising and promotion of their knives that the dealer does. If they raise the price of their knives to cover these costs then they are in effect trying to get these benefits for free and at the same time over charging their direct customers. As a collector that is a disturbing thought.

When I purchase knives from a maker I do not look for a discount. Even if I were to purchase five knives at once, or $10,000.00 worth in a year I would not request a discount. When I order knives I expect that the price I am given is what the maker feels is a fair price for me to pay for that knife. If I agree, I order the knife. If not, I don't.
A very good post Keith! Again, the differences (and some of the problems) in seeing knifemaking as a business - which it is for many - and a hobby, again, which it also is for many. The hobby knifemaker is happy to sell anything and views whatever money comes in as "found money" which is in addition to his job. So he may be real happy getting a $100 for a knife on which he worked a week and invested $75 in materials.

The professional knifemaker - who earns his living making and selling knives - is in the same position as anyone owning a company which produces and sells a product: ya gots ta make a profit or ya goes outa business!

Dealers can take over the sales / marketing / promotion aspects for a knifemaker and give him instant positive cash flow. Of course the dealer also wants his cut. So either a maker does not sell directly to customers, using only dealer(s) or he better make sure that the price through a dealer is about the same as what he sells the knife for directly. Otherwise there are gonna be some real mad dealers and customers, all of whom feel cheated. If I buy a knife from a dealer and find out later I could buy the same knife from the maker for 40% less... I aint happy.

The maker must establish prices based on how he wants to sell: directly or through dealers or both. The idea that a maker sets his price and that's the same price for consumers or for dealers is ridiculous for 99.9% of all professional knifemakers. That's not how retail business works. Dealers dont pay retail and mark up over that!

I can only think of a few makers who might be able to get by doing this: Loveless, Moran, Lake and maybe Emerson. Other makers who's works consistantly sell for more than their prices in the secondary market might be able to do it as well. And the reason for this is supply. There aren't enough knives on the market to fill demand. If Loveless started making and selling 500 knives a week, his prices would also fall as soon as demand started tappering off.


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  #40  
Old 02-12-2004, 07:56 AM
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RogerP RogerP is offline
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Quote:
Originally posted by Kevin Wilkins
Of course the dealer also wants his cut. So either a maker does not sell directly to customers, using only dealer(s) or he better make sure that the price through a dealer is about the same as what he sells the knife for directly. Otherwise there are gonna be some real mad dealers and customers, all of whom feel cheated. If I buy a knife from a dealer and find out later I could buy the same knife from the maker for 40% less... I aint happy.
There's no doubt that the best case scenario for the collector is being able to purchase the knife from a dealer at or very near the makers price. But it is probably not realistic to expect it each and every time. As a collector, I don't have a problem paying a reasonable premium over the maker's price to have the knife NOW as opposed to 2, 3, 5 years from now. I can't imagine that I would ever knowingly pay 40% above the maker's price, but I also consider it my resposibility to assess whether the dealer's price is fair. Given the vast quantity of information available on the 'net - not to mention off-forum discussions with makers, dealers and other collectors, it's not terribly hard to acquire a fairly good idea of the going rate for a particular maker's knives direct from him / her, from dealers and on the resale market.

If I buy a knife from a dealer and find out that I could have it from the maker in a reasonable period of time for 40% less you can bet I'm unhappy - with myself for not doing my homework.

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  #41  
Old 02-12-2004, 09:40 AM
cactusforge cactusforge is offline
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If a maker does not have a built in discount in his price structure so he can sell to a dealer at a discount then he, the maker, is handicapping himself.
A maker that is back ordered over a year in my opinion does not need a dealer, why give some one else part of your profit, Your product sells it's self.
I feel that a dealer can help a maker that needs to increase his sales to the point where he can fly on his own, but he still needs to remember where he came from.
I have found that a lot of dealers will not help a new maker.
Gib


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  #42  
Old 02-12-2004, 10:32 AM
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Les Robertson Les Robertson is offline
 
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Hi Ed,

There was a reason I asked about giving a good customer a discount.

Lets say it's 10%. You give a dealer 25%.

So we are talking a 15% difference. Exactly how many shows will this collector take your knife to? How about putting it on their web site? Ok, you get the drift.

So the point here is, not whether you are willing to give a 25% discount. But are you willing to give a 15% discount.

This of course is a technique for closing the sale.

If you are selling a knife that is $250 and the client can affored $225. The objection is not the $250...it is the $25.

I had a client last weekend in Little Rock. He was looking at a knife that was $240. He told me could pay $200. I polietly declined. He stood there with a strange look on his face and then asked. "you mean to tell me you would lose a sale over $40?"

To which I replied "your willing to lose out on that knife for $40?". If you ordered it from the maker it would cost $240 and you would get to wait a year. Then pay $15 to have it shipped.

He smiled, nodded and reached for his wallet.

What I showed him was the "Value Added" he couldn't see on his own.

Giving that dealer a "15%" discount you will get value added to that sale.


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  #43  
Old 02-12-2004, 12:13 PM
jbgatlin jbgatlin is offline
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I feel the discount is worth it's weight in gold in assisting with advertising and exposure to new buyers. Sure it might take a bite out of the paycheck, but if done correctly, the dividends will be seen down the road.

Just a newbies perspective,
Brett Gatlin
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  #44  
Old 02-12-2004, 12:29 PM
cactusforge cactusforge is offline
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Brett, If the price structure has a built in discount there is no bite. Price is figured this way. Cost of materials+ cost of labor+ over head (what it cost to operate the shop) + profit for the Maker+ discount for the Dealer. Others may figure it different but this is the basics. Gib


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Old 02-12-2004, 12:51 PM
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Kevin Wilkins Kevin Wilkins is offline
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You're right Gib, that's the wholesale price. In retail sales the wholesale price is usually at least 50% less than retail. Some industries work on a much smaller margin, it depends on the product, sales volume and unit prices. If you make 10% per unit and the retail price is $50,000... well, Bob's your Uncle!

Don't get me wrong, I think dealers earn their money just like makers. I dont begrudge them their profit at all. Makers must take care to figure prices accordingly if they sell through dealers.


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