How do you set a price?

[sjaqua]

While I'm not super new to knifemaking (I have made my first few knives). I am new to the idea selling custom knives. So my question is how do you set a price? Is there some sort of tutorial? I know it's based on skill of the maker or how well the maker is known. But all things being equal, how do decide what to charge?

[Bob Warner]

Pricing your knives is almost as much of an art as making them.

You would have a hard time justifying a price by taking the cost of materials and applying some magic formula to get a price.

You also cannot price them by comparing to a similar knife by another maker. The other maker may be well known or really terrible at knifemaking.

I finish the knife and look at it. I try to forget the hours I put into it and the cost of the materials. I just look at it and try to determine what it is worth to ME. If I decide it is worth $200 to me, then I would expect it would be worth $200 to someone else. Therefore the price is $200.

You still have to look at it and decide if you are making any money. You don't want to put $200 worth of MOP on a good knife and sell it for $150. There is a trade off and sometimes you may not make a lot on a knife but that is called "Paying your dues." and everyone here has made lesson knives than they wanted to but sometimes it is better to sell it without a big profit to show someone how good you are at knifemaking. If your knives are good, they will be willing to pay more next time.

As your skills grow and you become recognized by the knife buying community for your skill and the quality of your knives, you will get more orders and there will be in increaded demand on your time and skills, your pricing should grow with this demand.

[Ray Rogers]

The market value of an item is the amount that the buyers are willing to pay. Like Bob said, pricing the knife is nearly as much of an art as making it in the first place. Since that is true, it is obvious that there will be as many ways to arrive at a price as there are ways to make a knife.

I assume that you are not a full time maker. That gives you greater leeway to follow Bob's method than if knifemaking were your only income.

From my point of view, the absolute minimum you would want to charge would be ddetermined by the material costs, including belts and accessories, that you put into the knife. Even so, if that's all you charge then it is a 'lesson' knife.

The hours you put into it only count if you area full time maker or one of the few highly regarded makers who still keep their jobs in the real world. Even then, the hours usually have to be seriously discounted or your per hour rate has to be very, very small. You don't get rich doing this for a living usually.

Look around and see how other makers are pricing knives that you think are similar to yours in fit, finish, materials, and embellishments. Look only at makers who are not 'big names'. Just because you make an identical 4" Loveless hunter to the ones Bob makes doesn't mean you'll get his prices! But, there's no reason you can't get the same price as many of us rank and file makers as long as you're sure you are comparing apples to apples. If you haven't seen knives up close by other makers then get to a knife show and look before you even think about pricing....

[cactusforge]

Handmade sometimes means minimum wage minus $4 per hour if you are lucky. Gib

[Kelly Carlson]

I just sold a folder with total material cost of $ 311, and a week's work for $ 500, and another with material cost of about
$ 10, and a day's work for $ 350. So, for one week, I earned less than miniumum wage, and probably nothing when adding in belts, machinery depreciation, etc. For the other, I earned ten time as much.
Candidly, I think the prices were both about right, based upon what I would have paid another maker for the same items. One just took too darn long and I invested too much in materials, and the other came together beautifully.
What I did earn, however, was how to avoid a lot of errors in the future, and to plan out my designs on paper before diving into machinery with an undeveloped picture and a lot of expensive materials - and that's priceless.
Bob Warner's comment is probably the best guide - what would you pay for a comparable knife from a comparably known maker?

[Chris_Crawford]

Hello sjaqua,

I'm a fairly new knife maker myself. I've been making knives as a part time hobby for a little over a year and a half. I sold my first knife on Ebay for something like $25. It was a railroad spike knife, and I was proud that someone bought it.

Almost all of the knives that I make are pocket knives. As my knives started getting a little better, I decided that I wanted to see if I could sell a few. I had the same questions about pricing that you have. "How do I set the price?"

The best answer that I can give you is something that someone told me. Start off by setting the price at what you believe the knife is worth. By that I mean two things: 1) How much would you be willing to take for the knife considering the time, expenses, and personality that you have in it. 2) Then decide if that would be a fair price for the buyer. To me, the best price to sell anything is the price where both the buyer and the seller benefit.

Now here is the key to setting the perfect price for your knives: If you can not keep knives in stock, you have the price set too low. If you can't get rid of them, you are setting the price too high. Find the place that's in the center, and you've found the perfect price for your knives.

Hope this helps. -chris