Even in a more level playing field, materials matter and command AT LEAST their own value in increased price, if not a little more for the 'exclusive' or 'cool' factor.....as well as the future replacement factor, which SHOULD include anticipated inflation.
Another distinction that needs to be made is what is the end game in making a particular knife? If you are making a knife with salvaged and scrounged material, and locally sourced (maybe read inexpensive?) handle material with the goal of repurposing, or making a knife in the most economical way possible to satisfy your or your buyers desires, that is totally fine. Read no further.
IF YOU PLAN/WOULD LIKE TO SELL KNIVES FOR A PARTIAL BUSINESS OR PROFIT.......read on.
I see newer makers all the time say "I'm only selling $150 knives....I can't justify a $60 plus piece of handle material." The real truth is, if you want to sell knives and outsell the competition, you can't afford NOT to use high quality handle material. If you have to raise your price to account for AT LEAST the increased cost of the material.....so be it.
I can't be the only one that has noticed the HUGE influx of new makers into our field in the last year or two due to shows like Forged In Fire and the booming interest in handmade/handcrafted stuff and the entrepreneur spirit that is surging in this country right now. And 90% or more of those guys are making simple basic three piece knives (full tang, two scales). I see guys ALL THE TIME on Instagram putting $90 pieces of koa on knives that barely crack the $300 mark.....and they can't keep up with sales.
If you're a newer maker making three piece knives and wanting to sell them, what are you going to do to differentiate yourself from the vast sea of new makers doing the exact same thing as you? The answer?....... High quality handle material, well finished. As my good buddy
@John Wilson says, "Handles sell knives" He couldn't be more right. Clean, well finished blades with nice grinds and a nice high quality wood handle will outsell just about anything else, all day long.
There are undoubtably folks that will appreciate a well crafted handmade knife with plain, locally sourced, inexpensive handle material. But show them a premium wood handle upgrade and their jaw will drop. If you asked 100 people if they wanted to save $50 or $60 on a custom knife by going to a plainer handle, only 2 or 3 will go for it....if that.
It doesn't take any more effort or time or skill to finish a piece of koa or amboyna burl as it does a piece of pine or hickory. So put the absolute nicest piece of handle material that you can afford on it, finish it well and charge accordingly.