Knife making buisness question #1

[NJStricker]

A couple thoughts here regarding pricing/shop rates.

First, from Wayne Goddard. (Not that I think that he is THE authority on any of this, but he's one of the few makers that has been in a position to actually put some of his comments regarding business in print.) Anyway, he suggested that the price of a knife should be based on YOUR SHOP RATE x 4 X HOURS TO MAKE THE KNIFE. So, at $20/hr., a knife that takes 8 hours to make should bring you $640. That's a bit much, in my opinion, unless you are one of the current hot makers or have established yourself as one of the top knifemakers.

Then, a suggestion from the late Bob Engnath: the price of a knife should be enough to enable you to make 3 more like it. I think Bob's opinion was if you started breaking things down to an hourly rate, you'd realize how little you were making, especially when you start considering all the other business-related tasks that need to be done (which means the knives aren't being made).

Finally, something remembered from an economics class in college: The market determines what price it will bear for a particular product. Whether or not the production costs are above or below that price determines whether the business will thrive or fail. So, if you follow Wayne Goddard's advice and make a $640 knife, but potential customers aren't going to pay more than $150, then you are going to realize real fast that your business isn't so hot.

I'm enjoying this discussion, guys, and learning a lot. I think this is the most traffic this sub-forum has seen in a while. . .