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  #1  
Old 10-18-2004, 12:35 PM
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Stephen F Stephen F is offline
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Types of customers in the Custom Knife market

Hi Les,

I was wondering if you do any form of evaluation of the demographics and motivations of the custom knife buying public eg:
  1. What % are collectors, what % one off "users"?
  2. Is there a "typical" age range that most collectors fall into?
  3. Are there more collectors entering the market than are leaving the market at present?
  4. For new collectors entering the market for the first time do they have a most likely price range for that first purchase?
  5. Is there a particular type of knife that is the most common first purchase?
  6. How do most new collectors or "one off users" find out about the custom knife market?
  7. Does the market comprise a body of long term collectors, plus a dynamic group of collectors who only stay with it for a short while?
  8. Which group will on average pay the most for a single knife - the long termers or the "fad" collectors?
  9. What % are Long termers and what % "Fad" collectors?
  10. Has that % share shifted recently (very hard to tell until the new "fadders" leave I suppose)
  11. Are long term collectors more likely to purchase a higher % of knives direct from makers?
  12. Within the US are there any particular states that has a higher concentration of buyers from any particular group?
  13. Outside of the states which country has the highest demand for US sourced customs?

I realise that this would be quite time consuming to research, and don't expect answers to them all - but it would be interesting to understand a bit more about the market and what makes it tick - and I really can't think of a better person to ask!

Cheers,

Stephen
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  #2  
Old 10-19-2004, 03:39 PM
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Les Robertson Les Robertson is offline
 
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Hi Stephen,

First, let me thank you for your confidence in my ability to answer those questions.

Secondly, as you pointed out, this would require significant time and cost to obtain accurate results.

Lastly, if I did have these results I would be hesitant to publish them for all to read. For the same reason Coca Cola doesn't release it's demographic research to it's competitors. I already provide enough market research and business information on the forums for them

I too would love to have all of this information. I could make educated guess's, but that is all it would be.

Things have been so busy for the last 8 weeks I can't even get to all of my emails and phone calls. This is the first post I have made in over a month on any of the forums.

Busy = Good.

Personally, I don't think there is a person any where who could answer these questions with any degree of accuracy anywhere.

It's like the post they had on BF about who sells the most custom knives. People were guessing with no basis on reality of who they thought sold the most.

If you can narrow it down to a few main questions I might be able to help.


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  #3  
Old 11-01-2004, 11:20 AM
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Stephen F Stephen F is offline
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Hey Les,

I fully understand your position. If I try and distill my primary issues they are as follows:
  1. How much of todays prices are driven by new buyers entering the market with high disposable income - buyers who stay in the market for only one or two years then exit?
  2. Can this cause a higher margin opportunity for purveyors? - My reasoning here is that long term collectors may be on lists, short term collectors need a quick fix, so will go to an established dealer and pay the market price rather than the makers price.
  3. Although not all dealers will put a higher price to a customer, some will - will this then lead the maker to put the prices up?
  4. Do new short term buyers get taken advantage of on pricing in this respect?

Now .... if this cycle continues and exiting short term buyers are replaced by new ones, then all in all this is good for the market as price inflation will be maintained, and the long term collectors benefit the most (interms of return , however the increasing prices can also be seen as a bad thing for some).

But ... if we have a disproportionatley high number of new short term buyers at the moment, then, when they exit, there could be a dip!

My questions where aimed at getting some statistics together to correlate against price movements .... but a good gut feel will also do

Cheers,

Stephen
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  #4  
Old 11-04-2004, 02:08 AM
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Kevin Wilkins Kevin Wilkins is offline
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So if I understand you correctly, you're asking if a lot of Les' customers are New Rich idiots who buy knives for a year or two without giving a crap how much anything costs and is this a good opportunity for dealers (and Makers) to jack their prices to clean out these suckers before they get tired of knives and move on to throwing their money away on some other (semi)useles luxury goods they neither need nor understand?

Gee Les, you better get yourself a New York market research agency to get right on that! Or maybe just start asking each custormer: "Say, are you a fool with more money than sense? If so, add 50% to that price!" Let us know if it works!!!



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  #5  
Old 11-04-2004, 11:48 AM
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Stephen F Stephen F is offline
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Hey Kevin, thanks for your unconstructive and derogatory response. Do you have anything meaningful to add? Its good to see that the knife market in Europe is so strong that you can afford to alienate potential customers.

I mistakenly thought this would be an interesting topic, and was actually prompted by a remark made by Les himself in the thread below:

http://www.bladeforums.com/forums/sh...ght=tim+herman

look in post No. 6

Unfortunately Bladeforums no longer has the benefit of Les's input so the question was posted here.

...... sorry to drag you into this Les.


Stephen
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  #6  
Old 11-04-2004, 03:18 PM
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Les Robertson Les Robertson is offline
 
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Hi Guys,

Ok, no need to get into a urination contest here, save that for BF or USN. Kevin, I appreciate you looking out for me. I agree it is difficult to answer any of the questions in this thread with specific numbers.

However, in fairness to Stephen, his newest set of questions are some I think I can answer if I am allowed to use my experience and best guess.

1. "How much of todays prices are driven by new buyers entering the market with high disposable income - buyers who stay in the market for only one or two years then exit?"

Personally I think only very small portions of the market are affected by those buyers with a high amount of disposable income. It is true that many stay for a very short time, then again a small percentage do stay around for decades. Most of these buyers most buyers and makers have never seen or heard of. As most either work with a maker(s) directly or one dealer who keep these buyers anonymous.

I think the biggest impact these buyers have is allowing custom knife makers to experiment and try new things. This experimentation allows new materials, designs and techniques to be perfected and ultimately shared with other knife makers. There by brining these new ideas to the overall custom knife market.

If these buyers do have an impact directly on the market it is a small nice market or a particular maker or two.

Examples are:

The Damascus Auto market 8 years ago. Prices went through the roof in a very short periord of time. I think both the makers and dealers got greedy and killed the market within a couple of years.

Currently, there are two individuals who are driving the aftermarket prices of Ken Onions knives in the aftermarket. The plus side is a huge profit margin for those lucky enough to get drawn for one of Ken's knives. The down side is, prices are going up so high, most people cannot afford one. As this happens there will be fewer and fewer buyers for Ken's knives in the aftermarket. As with most things one or both of these buyers will find a new maker to collect. Onces this happens the prices of Onion's will start to come down.

If you need proof of this, look at the Emerson market now compared to 4 years ago. People who paid top dollar for those knives in the aftermarket then are selling their Emerson's at a loss.

2. "Can this cause a higher margin opportunity for purveyors? - My reasoning here is that long term collectors may be on lists, short term collectors need a quick fix, so will go to an established dealer and pay the market price rather than the makers price."

Yes, some dealers will take advantage of the need for a "quick fix" and pay the sometimes grossly inflated prices. This is acceptable and no dealer has ever held a gun to a buyers head to buy the knife.

These buyers need to understand that when the "quick fix" has worn off and they try to sell those knives. The dealer in most cases will not buy back the knife for any where near what they sold it for. Most will not take it back in trade for the price the buyer paid for it.

So if your going to buy knives to fullfill a quick fix, you might want to seek out a dealer you can develop a long term relationship with.

3. "Although not all dealers will put a higher price to a customer, some will - will this then lead the maker to put the prices up?"

Yes, some makers will. To their credit makers like Onion and Emerson have kept their retail prices affordable for most custom knife buyers.

Unfortunately, some makers do adjust their prices based on a couple of knives they saw sell for a lot more money on a Internet site like Ebay. What they feel to realize is that they are basing their new price on information they cannot qualify.

Personally with these makers I will shift from buying knives outright to only placing orders when I get an order for one.

4. "Do new short term buyers get taken advantage of on pricing in this respect?

Most new buyers buy "what they like". Most new buyers are going to go with lesser known makers because of the price point. Buyers, whether new or not have to do their homework and understand the ramifications of any purchase. However, most buyers even very experienced ones buy what they like.

It is only a very cold, calculating individual who does their homework, knows who to buy, when to buy and more importantly when to sell. Who seldom if ever get "taken advantage" of regarding pricing. If the value is not there or if the ROI is not there, the knife is not purchased. They are usually not affected by the hype and almost without exception sell every knife they buy for a profit.

Buyers move in and out of custom knives. Most who get the "bug" bad go through their money like its free. Then buyers remorse sets in, then they sell the knives at a loss. Some come back others leave forever.

Probably the biggest negative on the custom knife market is Makers who lie about delivery times, demand a 50 % or higher deposit or worse yet payment in full. These experiences more time than not turn out to be a negative one. This is the quickest way to lose a new buyer. The other problem are dealers who will knowingly lie to a buyer just to sell a knife.

Although with the advent of the Internet it is getting tougher for that to happen. Especially if the buyers do their homework.

My best advice to buyers is to constantly seek out pertanant information about the makers you like or the markets you like. Determine for yourself which makers work you think is the best bang for the buck. As well which styles of knives you like and try to focus on those makers and styles at least for the short term. It is very difficult to gain any level of expertise moving from style to style. While it may give you that short term fix. Long term it could be very sobering.

Stephen I hope this answers your questions at least to some degree.


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  #7  
Old 11-18-2004, 02:51 AM
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Kevin Wilkins Kevin Wilkins is offline
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Ah, humor is lost on those who don't lnow how to laugh!

See the little laughing head: he thought it was funny!

I guess I have been in the advertising business too long and forget those marketing guys take their stuff REAL seriously! We art directors just get drunk at lunch and draw pictures all afternoon!

Oh, forgot to mention: "alienate my customers" ? What's up with that? The people you describe aren't my customers! The majority of my customers are very knowledgable regarding custom knives, tool making and related fields. They ask me inteligent questions, provide solid design and user related input and most of them already own quite a few custom knives. A very large procentage of my customers return and buy at least one more knife and a signicicant procentage buy multipe knives. Relatively few of my knives appear on the secondary market because most people who buy them, keep (and often use) the knives. Now that don't sound like no alienation to me.


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Last edited by Kevin Wilkins; 11-18-2004 at 03:03 AM.
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  #8  
Old 11-20-2004, 02:17 AM
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Stephen F Stephen F is offline
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Hi Les,

Thanks for taking the time to write such an informative and constructive response - as usual.

For me its important to understand what may influence the value of the investment (other than knife and maker) one may have in custom knives, if thats how you view them, and is relevant to the type and quality of knives one may acquire. Of course it is understood that some custom knives are tools and will never be worried by problems such as collectors, investment, and RoI.

It was a pleasure to talk to you again the other day, you have an encyclopedic knowledge of the knife world - you should possibly consider setting up a consultancy line that charges by the minute

Stephen
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  #9  
Old 11-22-2004, 02:47 PM
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Buddy Thomason Buddy Thomason is offline
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Just a quick "thumbs up" and thank-you to Les for once again providing much food for thought here. BT


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