Hi NJ,
I was actually writing that a quick way to end a career in custom knives is to make what you want to make...and not what the buyers want. Over the last 25 years I have heard maker after maker loudly and proudly proclaim...They make only what they want! Most of those makers are long gone.
Those same makers will also lament:
1) Why don't I win Awards? Usually because your knives aren't good enough or fit into any particular category (read gaudy looking)
2) Why don't dealers work with me? Usually because there is little or no demand for the makers work. But more to the point these makers are slow to take suggestions/advice on how to make their knives more marketable. Given the amount of makers compared to dealers...why would a dealer waste their money and time on this type of maker.
3) Why don't I get articles? Because more than likely you are not attending major shows, advertising and having professional photos taken that can be used in magazines. When I first started as a writer for the magazines I went out of my way to try and put photographers and makers together at shows. I have stopped doing that...it is now incumbent on the maker to get the photos for the article.
The objective of any business is to make a profit...even non-profits (which is a tax status not a business entity). If you are not making a profit...you will eventually go out of business. You may still be a knife maker...just one that loses money on every knife.
My feeling is that a maker should build knives that best represents/show cases their skill set. That is the artisan/craftsman aspect. You then have to combine that with what materials are currently in demand. I am still amazed at how many makers use brass and nickel silver. There is a place for those materials...but that is generally when building knives that are copies of antiques or factory knives. Some factories uses brass, such as Randall. That is because they have a long history of building particular knives with brass. People have seen that for years...and that is what they want. Doesn't bother Randall that brass is CHEAP and easy to work.
Last is the price! This goes back to understanding your position in the market. I created a matrix while in Graduate School...it took me about 100 hours to create this. Then again I was looking at every maker out there...that I had heard of. I have told a couple of makers about it...and they felt it was either too hard and or time consuming...easier just to ask another maker or guess.
A maker should right off the bat be able to use basic cost accounting:
Cost of Steel + Cost of guard/bolster + Cost of handle material + Cost of shop time (this will include fixed and variable costs) + Cost of sheath (if there is one). Then add what you need to get for your time. Come up with a cost. Now go and compare that to other makers building a similar knife. If you are more than better known makers...you should lower your price. You can choose not to...you will just not sell as many knives as you would like.
This comes into play even more so when you start talking about Gross and Net profit! Most people don't know the difference.
I have had this conversation with more makers than I can remember who sold out at shows...and lost money. They tell me they made $3,000 (Gross). I then ask them did you deduct the cost of the table, air fare/ gas for the car, cabs, food, hotel? Once you have deducted all of that, did you deduct material(s) cost, belts, shop costs? Now you have your Net profit. It is at that point that many realize they lost money coming to the show...or made .25Cents an hour for their labor.
This the main reason that about 98% of the knife makers in the world are part-timers.
As someone who has been full time in the Custom Knife Business for the last 16 years...I can tell you it is not easy.
For me the time spent on the Matrix has been invaluable...I can price just about any knife from any maker with no problem. Well there is one problem...when I price a knife it is what it should sell for...not necessarily what the maker wants for it.
A "game" that collectors and myself play is look at the knife on a table...guess the price. Then turn the knife over and look at the price.
If the price is too high..you set the knife down and walk away. If the price is right or below what you think it should sell for...pick up a couple other knives on that table and see if the prices are where they should be on those. I call this a "Value Price". For me if I see that...I start talking with the maker.
Then there are the makers who don't let you play the game...they don't put a price on their knives. They are from the "Don't price them and get them to talk to you". The truth is generally they don't know what to price the knives at. They are hoping to throw out a price and the customer will let them know if it right or not.
It is the same with websites, my experience has been that without exception the makers who do not price their knives on the website...when you do ask them for a price...are too expensive for their position in the market. I have had several tell me..."That is what they have to get". Question is how long are you willing to wait to get that price? There is something that then comes into play called the "Time Value of Money". Basically the money tied up in inventory cannot be spent to purchase (materials, belts, etc) to make the next knife. The longer the knife sits there the higher your "Opportunity Costs" go up. Opportunity cost:
The cost of passing up the next best choice when making a decision. For example, if an asset such as capital is used for one purpose, the opportunity cost is the value of the next best purpose the asset could have been used for. Opportunity cost analysis is an important part of a company's decision-making processes, but is not treated as an actual cost in any financial statement.
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For most makers it is about making a knife and selling it and buying more materials. Nothing wrong with that, makes for a very nice hobby.
