I recognize that if I price too low, I will be competing unfairly with the professionals
It's not so much the fact of "competing", but more so as has already been mentioned..... that first knife sale will "feel good", and if the price is too low, you will find yourself in the position of having a bunch of orders on the books, with everybody expecting to pay that "low ball" price that you sold the first one for. (news of overly low knife prices travels at the speed of sound). That in turn will be like a slap in the face when you're sitting there with all those orders, and realize you're not making enough to pay for the materials, let alone your time.
Keep this in mind when it comes to producing and selling custom knives..... You can always reduce the price on an individual sale....but you CANNOT ever raise it. What that means is that when you price a knife, you can always price it higher then you think it will sell for, and if someone shows interest, you have the opportunity to offer a discount. In the end, you can usually get what you have to have out of the specific knife, and the customer feels they got a bargain because you gave them some type of discount. That's an age old sales tactic that is used in every sector or retail. On the reverse side of that coin, if you set prices that are too low, and then try to bump them up, most potential clients will view you as "greedy" and avoid you.
Just think of it this way..... you can always negotiate "down" with a client, but good luck every trying to negotiate "up".
Where the main problem lies is that in general, beginning/hobby knifemakers are passionate craftsmen, but most are terrible "businessmen"(along with a lot of "professional" knifemakers). In many cases it's just a lack of experience, but learning those business lessons cannot only be brutal for the individual, it also affects others within the industry.
As for a knife being of a certain quality level, versus how it should be priced.... that is a solid recipe for disaster! From the VERY FIRST knife you sell....not give away, not give as a gift, but SELL. YOU are creating and building YOUR reputation as a craftsman/professional.
If you're in doubt about the quality level of what you sell, it doesn't matter if you sell it for $1, it has to be the very best you can turn out at the time. Nobody will ever care if they "only paid $XXX for it", if it's substandard or fails in any manner, you have to be prepared to repair/replace, or refund. If you're not, don't ever sell that first one, or if you do anyway, be prepared for the grief you create for yourself.
I've been at this a LONG time, and I have seen even long time "professional" knifemakers destroyed because they took shortcuts and did less then the best they were capable of. The moment you step across the line from giving away knives, to selling knives, everything about your responsibilities changes.... and if you're not ready for it/have thought it through, it can cause you a LOT of grief.
Maybe this will help someone when it comes to pricing their work...... Look at it this way. Take a good look at everything it took you to build a specific knife, at the highest quality level YOU can produce.....then quantify that into a dollar figure and ask yourself..... How much money would I charge to make that particular knife again? Then you have a STARTING point of where YOU should be pricing YOUR knives.
For someone such as myself, it's a bit easier to decide prices. As one of less then 120 ABS Mastersmiths in the world, because I chose that path, spent the time and effort to "go through the ranks", and submitted myself to the testing standards set by the organization, and successfully navigated the course, it not only forced me to gain a lot of knowledge and experience, but also, in the eyes of many, it gives me a certain level of credibility. Now, that doesn't mean that I know everything there is to know about knives, nor does it mean that my way of doing things is the "right" or the only way. It only means that I've likely stumbled my way through many things that others might not have....at least yet.
All of that took a lot of years, and a lot of time/dedication..... but even with all of that, I often cannot demand the same prices as some of my peers..... simply because I am not as popular as they..... but if I offer similar knives that are not priced "in the ballpark" of what their work sells for, I am viewed as trying to "undercut" them. So, unless you are the #1 knifemaker in the world, pricing and sales will always be something you struggle with. I think in the end, as long as you are HONEST, with both yourself, and your clients, then your on the right track.
