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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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#16
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Chris I believe in the inherent integrity of human beings and do not expect them to take advantage of me (there are some exceptions who will lie and cheat at every turn but they are discovered quickly and people will give them a wide berth).
Warrenty is a valuable tool in building customer relationships even if it is never used, just knowing that it is there with no questions asked strengthens the relationship. I can tell of two occasions where warrenty came into play. The first was where a customer brought a kitchen knife in for free sharpening and during the sharpening and repolishing (I call it a factory tuneup) I found a stress crack starting, the customer was very surprised and pleased when I told that his knife was being replaced at no charge because a stress crack had developed...he has since added several more to his collection and referred me to several of his friends. The second was where the customer had damaged the wooden handle on his hunter and wanted it replaced, it was replaced and despite his wish to pay the cost of replacement it was no charge, again a happy customer. Yes there are "problem customers" but they must be treated as valued customers until the problem is resolved them you must decide whether to deal with them again. If you don't satisfy them they can give you an unfavourable referral. The exception to the rule is that I do not give a lifetime warrenty on sheaths because they wear out and dogs like to chew on them. I suggest to all knifemakers that they offer free sharpening on all of their knives as a way to build relationships with their customers. It brings the customers back to the shop and allows you a chance to see how the knife is performing and spot potential problems before they become big problems. __________________ george tichbourne www.tichbourneknives.com sales@tichbourneknives.com |
#17
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First, I don't know many knifemakers that feel they price knives well. It's probably the toughest job I do. I don't know, formulas might work for some, but not for me. I do know that if a better job was done pricing, we'd be more succesful. I have a base price for a model and options just like a car. My prices will be consistent from customer to customer. My only variable will be in the steel(damascus or carbon), and the handle materials. Let's take the handle material...
From the time I started making in 1998 till now I had bought as much handle material as I could afford. I bought the best I could, at shows, and in good quantities. I bought blues back then for as little as $30-50 and could not buy the same pieces for less than $120. I got stag from $5-10 a taper and now, with the ban, runs $30-80. It's a win-win. My customers get the best of what I have. There are variances on quality and rarity that can run materials up on the $$... Exibition pearl is about double what A+ is. With mammoth, bark, blues, copper are premium... popcorn stag, good color in walrus, etc... all add value no matter what I paid for it. I charge replacement costs, and use the excess $ to cover losses, MY LOSS, and buy more material. This is my ROI for buying materials in quantity. Shooting a $120 set of mammoth through your work rest sucks, but you just shake your head, pull more out and start again. It's just the cost of doing business. Everything we work with in the knife shop is sharp, hot or toxic. I enjoy working walrus, very stable and beautiful, second is MOP, then mammoth, then stab. hardwoods... then WAAAYY down the list is micarta and G10. On both ends are MOP and G10, probably the most dangerous materials I work with. Although I do use G10 or Micarta, I charge more just to steer people away from them. It's cheap $, but they can get a free upgrade just by staying away from it! What a bargain! Would this be my health ROI? For me, this business is not about the money. If it were money, I could make a LOT more selling widgets on the side of the road. I do the best job pricing my knives as I can so I can continue making knives without being married to my shop. Pssst, I know this sounds selfish, but the actual building of the knives is for me first and my customers second. I mean, they wouldn't be buying my work if they didn't like it, right? Along the way I develop relationships with customers, most I call friends. That's what this "business" is about as far as I'm concerned. I have enjoyed the thread so far and everyones input has some kind of impact on the others way of thinking. While the craft side of knifemaking has been coming easily, I sure want to learn more about the business end of it. __________________ Jason G Howell ABS Journeyman Smith howellknives@yahoo.com http://www.howellbladesmith.com |
#18
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I think it depends on whether you are trying to make your living at making knives. If so, you need to add up all your costs (shop, grinder, belts, sandpaper, electricity, etc) and make sure you are covering all this PLUS money to put food on your table, pay your health insurance etc. in the price of the knives you sell. You should charge a premium for using exotic materials, not only because you might ruin the material, but also because you had to spend your time looking for it; spend your cash on it instead of gas for the car; and because it makes a more unique and distinctive blade. It's none of the customer's business why you price the knife the way you do, and they have no right to get exotic materials at "wholesale" prices. They can buy it or not, it's up to them. But you have a responsibility to yourself and your family to support yourself and that means taking in more money than you're spending.
edit -- I understand establishing good relationships with customers. But this doesn't mean that you should let them take advantage of you. If they really value your skill, they'll want you to be around next year! Last edited by gator68; 08-24-2004 at 02:49 PM. |
#19
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When we pay insurance premiums we're paying for all claims, not just our own. When we buy a warranted product we are paying for warranty service, regardless whether we use it. When a customer buys a knife he is paying for all of the maker's overhead; materials - including any materials accidentally destroyed during manufacture, supplies, facility cost, insurance, salary, etc. Knife makers tie up their capital, often for years, in supplies. This is capital that could otherwise be earning interest somewhere. Ideally the maker is able to purchase exotic materials so that as their current market value increases he can realize some return on his investment. Pricing for current replacement cost, and including a factor for lost material, is only common business sense.
In most companies profit calculations are carried out at a very specific level, and prices set to allow a required return on investment. To be competetive a business must controls its costs, but this does not mean ignoring any of them. George proposes an excellent, objective method to acknowledge a cost of doing business. This is not charging any customer for a maker's ineptitude or mistakes, it's pricing for a cost of doing business. I applaud any maker who has given these considerations rational thought. This serves to eliminate subjectivity in pricing and goes a long way toward ensuring all customers are treated equally. __________________ Dave What's another word for synonym? |
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blade, knife, knives |
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