Midtech advice?

J

jkf96a

Well-Known Member
I'm a small time one-man shop. I do decent work, have been published a few times, and am working toward Guild membership. I've been approached by a custom firearms manufacturer about the possibility of some kind of collaboration or production run on a couple of my designs. I have a few questions, but also realize that there are lots of questions out there that I don't even know I'm supposed to ask.

How do these kinds of things usually work? I can think of several possibilities... They build them on my design, I get a small %. I build them, they sell them, they get a small %. We co-manufacture or contract some of the building, and both get a decent % of the profit. Which is the most common?

Let's say we settle on a knife that I would personally retail for $200. Should the price the dealer gets be less, equal, or more? Am I supposed to give him a "deal" because we're making a bunch of them, or should my standard price be the price?

I'm thinking of having a bunch of blades waterjetted, sticking with one or maybe two standard handle materials, and paying a kid to drill holes. I'll grind, then send out for HT. More of a production run than I usually do, with savings from the quantity processing, and time savings from the outsourcing of profiling and HT. I don't know exactly the quantities yet, but I routinely only produce about 60 knives a year. If I were to go in "big" batches like this, I'd think it would be 30 or 40 knives, based on the size of the other guy's operation.

Open to suggestions and comments.
 
Hello Jason,
I can tell you that getting my blades water jetted, they can do your pin holes too, has increased my productivity greatly and allows me to focus on grinding my bevels and handle sculpting and fitting.

I have used three different water jet companies and the one that I go with every time now is is JAY at http://www.waterjettech.com I buy the steel from Niagara Specialty Metals and have it shipped straight to Jay where he has my patterns on file and then he ships the blanks to me.
 
Jason the retail price they would sell at and your retail selling price would have to be the same. As far as them doing the building and you getting a small percentage, it will be SMALL. This is a case where volume is needed to bring you some good bucks. They might go off shore with this and have say 12,000 made at a time. If it's going to be a big time thing you may need a lawyer which will cost you lots even if you can find the right one that handles this sort of stuff. On the other hand if they are going to only do a couple of hundred, you should be able to get a better percentage and not have to worry too much if you are not deeply involved.
 
I don't think this guy has the capacity to go huge. They do custom AR's, cerakote, and sell some tactical factory stuff. Not sure how much volume they do, and I'm also not particularly familiar with the tactical market. Puts me at a distinct disadvantage in the negotiation process. If we could shoot for a MSRP a little above my usual price, and I could tweak production to make the knifes for a little less than my usual margin, and they could contract the sheaths through their operation, it might be worth doing.
 
They in San Marcos? If so, they seemed like good guys when they called me last year, but, as you know last year was pretty bad. If you need a hand with anything, let me know.
 
I would say The better the quality the more you should get paid. If you have to water jet, grind, ht, and then finish, it sounds like high volume consignments even with waterjet and paying someone to drill holes. Sell each unit to them at around what what you would sell an individual blade with that fit and finish for and they can mark it up a certain percentage to make their money. Another option is to look for a full machine shop with cnc, pay to cad the design, send them the steel, pay them for making the fully ground blades, and then send to ht followed by etching your logo and blasting/cerakote. The machine shop should be able to at least get the handles cut and even add some sort of sculpting pattern, unless you'd rather do that work.
That only leaves the glue up/ final assembly along with sheath work if desired. It won't be custom and your profit will be a little less but it would take the cnc much less time leaving you open for custom work and it's still your design, assuming you could spot the materials and set up. it should save you and their customers cash in the long run and continue to get your name out, unless the demand is for pure custom work . If the firearms place is willing to throw money in for a deposit (and I wouldn't hesitate to ask them): Bonus! I've looked into it recently myself and was fortunate to find a machine shop in the area that also does cerakote and knows a local ht guy. The firearms place may work with you a little to offer a product to their customers but you're still an independent business man getting paid for his services and products. if they want to carry your work they're familiar with your prices, they'll more than likely be willing to fund the materials, and they're gonna tack on their fee as a middle man before selling it. Just another option. Good luck.

Jim
 
If you are talking production knives 100 % mark up isn`t anything special. So with your need for some funds for the work you do may tell you what the asking price of the knife will be. It probably will be too expensive too sell. If you are talking these people acting as a realer you can figure a 25%- 40% mark up. Would they be able to sell many at that price and would they want to try. Frank
 
I have seen some of your work Jason. You make a fine Knife. I think with all the time and effort you will have to put in you would be better off just going solo. Unless they are going to put up the funds to pay for all the upfront dollars to material suppliers and Water Jet company. I think if you really want to do a mid tech line do a small run of say 100/200 and see where that goes. Look at the run of tactical knives Bark River did and sold thru knives ship free. It seems like that batch of knives just stalled out. Just some food for thought. Keep it small and keep it all is my thought. Good luck
 
Mark Andrews said:
I think with all the time and effort you will have to put in you would be better off just going solo.
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Seriously pondering that part as well. If I'm already making as many as I can make, and already selling them as fast as I can make them, what value added would a midtech run give me? It might give me an in with the tactical/AR crowd. It might give me a "sponsor" for advertising in magazines. It might make me some money, or help me front the costs on a big project. It might just be a huge pain in the butt.
 
Made some progress on the deal tonight. Going to make a run of 5 "prototypes" and see where it goes from there. We didn't talk price specifically, but we're in the same ballpark. He's thinking 25-35% markup, which puts my price to him close to my regular retail. We didn't nail down the specifics enough for a dead-on price quote. He's also open to a bigger run if the first five go well. Could be the start of something interesting :) Depending on what we work out for the design and steel thickness, I may still go waterjet. Haven't decided yet though.
 
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