Pricing a Hand Made Knife

 

Short and Sweet
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Man or Machine?
The first thing that he average person expresses when handling a quality hand made knife is appreciation of the fine detail, aesthetic beauty, the delicate balance of organic character with precision and symmetry, and, of course, the practical functionality of the tool.
 
The second thing that is often expressed by the inexperienced customer is surprise and confusion at the price.
 
The goal here is not necessarily to justify the price of a hand made knife or to rationalize that hand made is better than machine made, but rather to educate about how commercial industry works and how the modern artisan/craftsman fits in.
 
Functional Cutler’s Art
The hand made blade and the mass produced industrial knife are two entirely different beasts and it is best to see the hand made blade as fine art designed to be both an heirloom and also a useful tool. As an heirloom, it has spirit and should inspire, evoke emotion, and touch that deep part of us that is essentially human.
 
As a tool, the hand made knife is a reflection of the craftsman’s personality, imagination, and skill. It is born of the craftsman’s hand’s and passion to produce a tool that is durable, performs supremely, and feels as though it is a part of you.
 
Mass Production
Tools that are mass produced can be high quality or low quality just as a hand made tool. The practical differences are really only the costs in that industrial factories have the automation, marketing, and bulk materials that the small business artisan does not.
 
Of course, there are details in hand made items that factory made items can never have without passing through a craftsman’s hands. Yet, the more meaningful differences lie in the intention—The factory is run by a company who’s purpose is generally to make money by both meeting and manipulating consumer demand via hype and savvy marketing tactics.
 
Labor of Love
The bladesmith or knife maker is driven by a passion for his craft. Money is a benefit that allows him to continue but is not the end goal. Most knife makers produce knives whether they generate an income or not.
 
Production Cost
In my experience, most knife makers severely undercharge for their work. This is the result of a lack of understanding of how business costs factor into the cost of the final product which, sadly, leads to crushed dreams, frustration, and having to close the shop doors for good. This also hurts knifemakers who sustainably price their knives because the expected value of the handmade knife is lowered.
 
There are always differences between makers and their setups but here is a general breakdown:


Overhead:
Before a maker even gets started, there is the inherent cost of his workshop, garage, living room, yard, or wherever he is working. Many of the following points fall under overhead but are easier to explain as separate elements.

Raw Materials:
A knife can’t be made from nothing. Some makers recycle materials but even these are not free and must be located, salvaged, and often times processed to usable dimensions. Found materials are oftentimes more expensive because they require more time an work to prepare than purchased materials.

Tools:
Much like materials, knives cannot be manufactured without tools. Sometimes tools can be found free or low cost, but they still require maintenance, repairs, replacements, and even storage.

Consumables:
These fall somewhere between tools and raw materials. Items such as fuel, abrasives, lubricants, quenchants, etc are required in manufacturing but are also consumed in the process and must be replaced.

Labor:
There is, typically, far more labor than one might expect in hand made items. Even a small forged neck knife will take me the better part of a day and parts of the process such as heat treat and handle finishing require lots of time spread over several days. How much is the craftsman’s time worth? Personally, I have spent thousands of dollars and thousands of hours learning, practicing, and perfecting my craft.

Administration and Marketing:
Accounting, taxes, advertising, websites, e-commerce, photographs, etc., all take time and resources and factor into the cost of the end product.

Value
So what does it come down to?
 
For me, I enjoy bladesmithing and it is something I do even if I have to pay for it. Recuperating my costs and seeing others enjoy my work is a bonus. As such, I produce very few knives and my price point is relatively low but still high enough to be sustainable should I choose to go the route of the full time knife maker.
 
Price Point Breakdown

This is a gross oversimplification but it should be rather enlightening to the aspiring maker and the browsing customer alike.
 

Overhead: ……………….$75
This can be complicated because I operate from my home workshop. I estimate my overhead to be about $300/mo and I produce an average of one blade per week which means my overhead cost per knife is about $75

Raw Materials: …………$15
Also somewhat complicated because materials vary greatly and sometimes I buy in large or small quantities. A rough estimate for a knife with a simple wooden handle would be about $15

Tools: ……………………..$5
As with everything else, this is also more complicated than meets the eye. Some of my tools will outlast me and some will be replaced many times. I have spent several thousand dollars on tools so I’ll estimate over 10 years and 2000 knives to an average tool cost of $5 per knife.

Consumables: ………….$5
Compared to other factors, this is pretty straight forward.

Labor: ……………………$150
With some of my other skills I can generate up to $200/hr so I feel that $25/hr is pretty modest for knife making. The average small knife takes about six hours of solid labor, not including the sheath. This totals $150 in labor. Try offering a plumber $150 for a six hour job!

Admin & Marketing: …$25
This is extremely complicated as I am an entrepreneur with multiple streams of income, most of which I share with my wife. To simplify I’ll say the the average knife costs $25 in marketing and administrative fees.

Total: …………………….$275

So the average small knife costs me $275 and this does not include any extras like sheath, engraving, design, innovation, etc. A simple sheath would take about two hours and $25 in other costs so the average complete knife with sheath will cost me a about $350 including my time at $25/hr. Even at the current minimum wage ($10.50), the knife with sheath would cost $234.
 
If I dedicate myself fulltime to knife making and produce a knife per day then I can lower the price point by dropping the overhead cost per knife and lowering the total to $209. The issue with this route is that I would be giving up my other passions, generate less income and work longer hours.
 
As much as I would like to give others the opportunity to purchase a hand forged knife for less, it simply would not be sustainable for me. I do subscribe to the idea of a new economical paradigm that moves away from capitalistic greed so I am open to barters, but even that has its limitations.
 
Any ideas about how I can sell knives for less and pay my bills with the income? Feel free to browse the knives available for sale while you think about it.
 
If buying one of my hand forged knives is outside of your budget, I’m happy to teach you how to make your own. Check out our schedule of classes.

 

 

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