How do you set prices when you are new? a discussion..

BossDog

BossDog

KnifeDogs.com & USAknifemaker.com Owner
Staff member
The new makers always want to know how to set prices.

There are several different ways but the one that really works the best is this:
Rule 1. If you sell a knife with in 30 minutes after posting it on the internet, it was too low.

Rule 2. If you post a knife and it doesn't sell for a long time and you complain about all the other makers under selling and bringing the market down, you are too high.


At the very beginning, you should consider yourself ahead if you can sell one to simply cover the costs. You are then practicing for free.


Costs include:

the steel
bolster/guard/end cap steel
spacer material if used
the handle material
the glue
at least one or two belts
machine maint fund (machines wear out - I set this at $5/hour)
any pin material
sheath material
heat treating
postage for any back and forth
general shop fee for hand tools, super glue, markers, masks, band saw blades, rags, solvents, etc (I set this also at $5)

For me, the most expensive part of the knife is usually the handle material.
Steel second. It's funny how some get pretty worked up over the cost of the steel in a knife when it's only $10 or $15. Sending one out and back for heat treat is usually more expensive than the steel.

Anyway, I've calculated this a dozen times myself. *My* typical cost of everything above is around $75 to $85 dollars. When I finally started selling knives, I charged a dollar an hour for my labor and gradually increased that until sales bumped into rules 1 and 2.

Anyone else have a pricing method?
 
Wow that deffinetly put's it in perspective for me. I posted my first knives for sale a couple of day's ago and it lasted 1 minute. And these I didn't concider my best work. Don't get me wrong they turned out better then I expected, Just not to my standards. Thank you for the insight, I will have to apply this to my priceing. 2thumbs
 
That helps a lot sir. Answers a few questions I've been thinking about for the past few weeks.

Thanks,

BC
 
I think the most expensive part of making knives is the belts. I spend more on belts than steel or handle material. I use a combo of Norax and Trizac CF belts to get the finish I desire. I usually charge $50 and then $50 per inch of blade as the base price. More expensive handle material or steel will raise the price.
-John
 
Use belts like they are free :eek:and you will have better knives for it....


(of course I sell belts...but that doesn't make it less true)
 
John,
How do you like the trizact cf belts? I don't use the same steels as you, and I get a lot of blades out of them. When I say a lot, I mean 100+ blades per belt. I am using O-1 and L-6 damascus. How many blades do you get out of a CF belt using the cpm steels?
 
If I recall, Bob Engnath's advice for new makers was to charge enough to make 3 more knives. . .

But, there are other factors that go into knife pricing, like fit and finish.
 
Delbert Ealy said:
John,
How do you like the trizact cf belts? I don't use the same steels as you, and I get a lot of blades out of them. When I say a lot, I mean 100+ blades per belt. I am using O-1 and L-6 damascus. How many blades do you get out of a CF belt using the cpm steels?
Click to expand...

Not 100 that's for sure. I just use them till they don't cut as well. Maybe 5 or 6 depending on the grit, but I've been using them on CPM D2 with a rockwell hardness of 60. I've be trying them on some CPM 3V soon and I'll try to keep track of it. If it's not cutting really good, I change it. I love how the blade floats on the belt though. It's really nice.

-John
 
John Barker said:
Not 100 that's for sure. I just use them till they don't cut as well. Maybe 5 or 6 depending on the grit, but I've been using them on CPM D2 with a rockwell hardness of 60. I've be trying them on some CPM 3V soon and I'll try to keep track of it. If it's not cutting really good, I change it. I love how the blade floats on the belt though. It's really nice.

-John
Click to expand...

John,
The grit goes a lot further down than that, Grab a piece of an old 60 grit belt and refresh the surface and they will cut almost like new.
They don't glaze easily but when they do thats the trick to refreshing them.
They cut a lot cooler then the others though don't they?
With the steels you are using, don't skip any grits, with the lower alloy steels it doesn't matter as much. If I want I can go from 60 grit to the A45 in one step. If you did that with cpm D2 you would be there for hours.
 
Thanks for the tip. I'll try it. May save me a fortune!!!! Yeah, I can't really skip any steps to get the finish I want. I start with 60 grit, then 120, then 100 micron, 65, 45, 30 , and finally 16 micron. Then I do my satin finish running the length of the blade.
 
John,
You might want to pick up some of the other cf belts, the a300 works quite well right after HT, even for the higher alloy steel. They make a300, a160 a100, a65, a45, a30, a16, and a6.
From my experience you won't regret it.

Sorry to get off topic here, as an experienced maker, I set my prices by adding materials, a set shop fee to cover belts and glue and such, and a set per hour rate for how many hours I have into the knife.
 
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I didn't know they make a 16 micron. I will be looking into that and the 300 micron. They are my favorite belts. Thanks for the info Delbert.
-John
 
Delbert Ealy said:
If I want I can go from 60 grit to the A45 in one step. If you did that with cpm D2 you would be there for hours.
Click to expand...

I go from 60 grit to 45 micron all the time with CPM 154 or S30V.... Sometimes I do 100 Micron in between but only about half the time. :cool:

When the Norax belts get dull I reface them by turning the speed all the way and and raking a small point of steel across the face. Brings them back up nice! 2thumbs
 
As for the original question about pricing... When I priced my first folder, I looked around at what was selling that was similar to what I was making. Since I was a new guy, I priced mine a little less than most similar knives, just a little....

Once I found a good price point for that model, I price everything else off it. So if I make a knife that is 50% "more knife" I price it accordingly. So far it's worked out OK.

I bump prices up at the first of the year to adjust for the increasing cost of everything.

"Best way to make more money is to become more efficient!" - Ken Onion
 
Some kibbles to chew on.........................

Setting prices is no easy task, that's for sure. I suspect there is no "right" or "wrong" way to do it.

Here are a couple things to consider.

First: Be honest with yourself about what you are making. Look carefully at where you fall in the marketplace. It's real easy to think a knife is worth more than it really is. When you put so much effort into something, it's natural to be proud of a good result and want to get a "fair" price for it. To a customer, it's about what your knife looks like (and is) in comparison to the other knives out there. If you are really honest with yourself about what you are making and where you fall in the product area, as well as the reputation area, then you will find it easier to price things.

Secondly: You can price things from a "production" viewpoint. That's where you make the knife, then add up what you have into it, and then multiply, or add, or what ever your rule of thumb might be, to arrive at the price. In my experience, this usually results in extremes in over-pricing AND under-pricing. Doing it this way can give you lots of headaches and heartaches.

Thirdly: You can price things from a "market' viewpoint. That's where you look at what is selling, and in what price ranges, and you work backwards to come up with the knife you want to make. (or the knife you have already made and want to price) Most experienced makers do it this way, even if they don't do it intentionally! Just remember, the customers ultimately decide prices. If you start with a market viewpoint, you are more likely to come up with something that will sell.

Much of pricing depends too on what your own goals are. If you are interested in making knives, being creative and learning...........then selling something is secondary and selling something is a bonus. If you are trying to make part of (or all of) your living by making knives, then you have to make things that you like to make AND are in a price range that sells at a profit.

My original kibble I think is the most important............ be honest with yourself and keep your expectations in check. It does not matter what other makers are doing, just be true to what you are doing. Your potential customers will see that and everyone will be happier.

IMHO

Thanks,

Tim
 
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Tim makes some excellent points.

Like it or not once you decide to sell something...it takes on a "business" aspect.

Given the amount of knife makers out there...you have to do something to get yourself noticed.

IMO the most important thing a new knife maker can do is get their knives into as many hands as possible.

If you list a knife and it sells in 30 minutes...the knife is priced correctly.

To a large extent what determines what you can charge for a knife has little to do with the materials, how much you paid for a belt, etc. Most knives have less than $100 worth of materials in them. It has more to do with your position in the different markets you and your knives compete in.

While it will take some time and effort on your part you can figure out your position in any market.

Knife makers will offer pricing guidance. Almost always they are wrong. Why? Because they "feel your pain"! They know what it took to make that knife. The down side to asking a maker is A) They are your competitors B) They generally don't know their position in a particular market...let alone yours and C) Makers don't buy knives.

Starting by figuring out what your materials cost is a great start. Remember, people are paying for your learning/mistakes...reward them with a fair price. Then reward them a second time when you get noticed and your prices go up. The second reward comes when they go to sell the knife and they make money on that knife.

Doing so will give you a better than average chance of picking up another sale from that customer.

Pricing seems to be something that all knife makers deal with....even the very well known ones.
 
Another fine thread demonstrating one of the many reasons why I love this place.

Murph
 
A fellow knife maker told me that when you price your knives the best one is the most expensive and the worst one the least. The rest fall somewhere in between.
 
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