Over the last few weeks I have had several people comment on prices for custom knives. Knives from us, and from other makers. So I wanted to address the issue.
Over the years I have had many people say stuff like "your knives are like this other makers but he overcharges for his!". I think the case is more often that we UNDERcharge for ours, not that the other maker charges too much. There are many factors that go into deciding the price. Materials cost, time, taxes, shipping, lifestyle, if you are a full-time or part-time maker, etc.
So I'll break it down to you guys to see exactly what you are paying for.
Part time vs full-time
In general part timers can charge less because they are not dependent on the income. It's easier to charge lower prices when your mortgage is not dependent on it. The trade off is part timers often have a lot less experience. For example, we now make over 300 knives a year as a full-time business. I was a part time maker for over 15yrs before becoming full time. In that entire 15yrs I probably only made 500pieces total. You learn a lot more being full-time. We occasionally get customers saying stuff like "your steel holds an edge much better than these other makers I tried, whats your secret?" There is no secret, its simple metallurgy. We are just striving to do everything right. Comments like that tell me there are many people doing things wrong....and its usually from lack of experience.
This is a huge determining factor in pricing. Basically there are 2 ways to have more money in life...make more money..or spend less money. If you have an expensive lifestyle you have to charge your customers more to provide that lifestyle for you. Some of it is expensive tastes like what kind of car you drive and where you eat, etc but a large part of it is where you live. For example if I lived in New York City there is absolutely zero chance I could survive with the prices we charge.
Luckily for us we have simple tastes, and chose to live in an affordable environment. In the US I had higher rent prices, the cost and upkeep of my cars, car insurance, etc etc. But even in the US I looked for bargains. When I bought my Porsche I chose an older model and fixed it up myself (the joys of being a mechanic), which saves tens of thousands compared to buying new. Then I moved to the Philippines. My rent on a 2-bedroom house is just $75/month. We don't own a car (no desire to own one...traffic sucks), and take very affordable public transportation, we buy most of our foods from the local market, we don't have hot water (who needs it in the tropics?), no AC, heck we don't even own a refrigerator.
Simple life suits us. We are both avid readers and that's our main form of entertainment. But when we go out to dinner and the movies they're affordable too.
This allows us to pass the savings on to customers.
So comparing our prices to someone in Hawaii or New York isn't really fair to them.
This can also play a huge factor in cost. We choose nice utilitarian materials that perform well but also have a low price point. For example a chunk of 1095 steel for a blade may cost $5. The same size piece of steel in a nice mosaic pattern damascus(which may still be made from 1095 mixed with a similarly priced piece of steel) may cost $120. If you make the exact same blade from the 2 materials the 1095 one you may be able to price at $60, the damascus one you would need to add $115 materials cost onto the piece so the price soars to $175. But both makers make the same profit.(unless the maker is also making the damascus, in which case he makes more overall profit but has more hours into the piece).
Now throw in a $80 piece of mammoth ivory and the price jumps to $255. You just paid almost $200 more for a knife that will perform the same. Is it worth it? That is totally up to you, if you like the looks of the more expensive piece, the cost is justified. I started off using more expensive materials then I kept getting requests from customers that bought the nice pieces to make a similar model with a lower price because the nice pieces were "too nice to use". That's when I realized there were few affordable custom knives on the market. So we started Ecos to address this issue.
But after years of it I'm wanting to make some higher end pieces again so sometime soon we will launch a second business with pricier pieces.
You pay for the knifemaker
Some people look at a knife and say "its only $10 in steel and the maker wants $100??, I can make that myself". The funny thing is...that was my mentality when I started teaching myself to make knives at age 14. Little did I realize there is a lot more to it than that. There is a reason mothers encourage their kids to be lawyers, doctors, etc and not knifemakers...it is simply not a lucrative profession. Sure some makers do quite well, just like every market has standouts. Some painters sell painting for millions, many talented painters have trouble getting $20 at an art fair. This applies to the knife industry as well.
So what are you paying for when you buy a knife from a full-time maker? Everything in their life if that's their sole income. Costs don't stop at the price of steel...you have materials, rent, taxes, medical bills, etc. This is true for every industry but many people don't realize it. Even when you buy something from the grocery store its not just the cost of the materials, you are providing for every employee that store has. They just sell in such large numbers that its not as visible.
Paying for the brand
Just like any other field there is product branding in the knife industry. Sometimes you pay more for a knife simply because of the name attached to it. Just like people spend $800 for a designer purse. This is really nice for collectors who are investing for monetary gain, usually not so good for a guy that just wants to beat up a knife in the field. When we started Ecos we did not want inflated prices due to name recognition. That is one of the reason you don't see our logo etched on our blades. We also do zero advertising, every single sale is by repeat customers or word of mouth.
So to sum it up our knives are considered underpriced compared to most and that's due mostly to our lifestyle and design/materials choices. Some makers overcharge and make very good profit margins but the majority charge a fair price when you look at the overall picture.