Times change and knife companies’ sales methods must too

I’m intrigued with knife company history, as you probably know. While I wasn’t much of a student of history back in school, now that I can relate it to something, I love it!

History is not everyone’s cup of tea and I recognize that, but today we need to take a bird’s-eye view back regarding knife companies and their sales methods to see how things have changed….and continue to.

Quick Look Back

Union Cutlery Co saleman's case

Union Cutlery Co saleman's case

In the mid to late 1800s knife companies used jobbers and traveling salesmen (drummers) to peddle their knives. Then large wholesalers and retailers came into the picture. These firms often promoted different knife brands in their catalogs- often boasting over a 1000 pages. Eventually, the traveling salesmen died out and then came the age of advertising & merchandising. Local hardware and general stores were also primary sales outlets for the knife companies.

Even today, you can still find the local general or hardware store scattered around the country. These retailers and dealers still represent, for several knife companies, their primary sales channel. Next time you travel and run through a small community stop in- you will often find several brands available, like Case, Old Timers, Buck and Gerber knives, to name a few.

Times changed

Wal-MartFor many of the knife companies gone are the day of having thousands or tens of thousands of local sales outlets. Today Big Box Stores- the Wal-Mart, KMart, Home Depot, Target and Lowe’s- monopolize sales. These national chains have tremendous buying power too, providing them significant leverage when negotiating with the knife companies.

The speciality knife stores, like Smokey Mountain Knife Works, are the exception rather than the rule. There are very few stand alone knife stores out there today.

Big Box vs. 20,000 dealers

With fewer mom and pop stores across American many knife companies are faced with the dilemma of courting these Big Box Stores

buckknifecLast week, we saw a revealing article about Buck Knives in the Wall Street Journal. C. J. Buck was interviewed about his decision to relocate their company in 2004. The bottom-line was Buck’s move was an effort to lower operating costs, and thus allowing them to maintain their pricing (in other words, they were faced with potentially needing to raise their prices due to their costs).

Mr. Buck points out- “We (had gone) from having over 20,000 small cutlery dealers like Don’s Hardware store and some chains to a few big accounts like KMart, Wal-Mart, JCPenny and Montgomery Ward. We saw tremendous volume increases… But price became a big factor and our margins began to get squeezed.”

Knife companies like Buck, who use the big accounts as a way to volume sales are directly impacted by lower margins, while the companies still relying on the small dealer network have higher overhead to facilitate thousands of accounts and these dealers are being directly impacted by customers pulling in their spending reins. Many of these stores are now struggling to stay in business.

Online Knife Sales

Today, the World Wide Web plays an important component in knife sales too. Most every small retail and hardware store at least promotes their store online. The majority of them have some aspect of e-commerce too- allowing their customers to order direct from their site. Their challenge is, however, in order to command any measurable web sales they either have to have a very loyal customer base or continued marketing. Moreover, these stores simply can’t get the page rankings to compete online against the big boys- Amazon, Wal-Mart, etc. And at times their online stores compete with their physical location.

mainstrsupplystore

Here’s an example- Main St. Supply Company–  a 100 year old general store. Its web site offers hundreds of products, in addition to knives from Case, Buck and Old Timer.

Then what about each knife company’s own website? I can’t think of a single knife company without an online presence today. They realize the benefits of online promotion of their firm and their knives and yet, they are faced with the decision of whether to have direct online sales from their websites or to remain loyal to their existing distribution network- their dealers and retailers- by not competing directly against them.

Interestingly, a quick review of 16 top knife companies, nine offer direct online sales. Of the seven that don’t, they point buyers to their dealers list provided from their site.

Business Model Changes?

Are the knife companies in the middle of a paradigm shift (sorry to use that worn out phrase) from the tried and true dealer network of physical locations to more web oriented sales? The majority can’t count on landing a big box account or national retailer.

Wouldn’t you be interested in seeing the total number of online knife sales compared to the total sold for the last few years?

I would guess that number is going to increase to a point over time. Does that fact, coupled with higher profit margins for direct to the pubic sales, influence knife companies to increase their direct online sales efforts? And if they do, is that move helping or hurting their dealer network? Only time will tell, but the majority of knife companies already do. The question then becomes, will they keep their dealer networks?

Closing Point to Ponder

Recently I asked one of the most popular knife companies about whether they would allow a dealer to only have an online store. The answer was “No. We require our dealers to have a physical location.” … sounds like a bit of 1980s thinking, now doesn’t it?

Photo Credits: Buck Knife – The Wall Street Journal; Main Street Supply Co.

Leading Knife Companies Hold Gigantic Knife Auctions

Now that it appears the immediate threat to the Knife Manufacturers is well in hand, these companies’ focus is back to the business. Yes, before the recent scare about the Customs and Border Patrol redefining a switchblade, the knife makers had a more pressing problem- very sluggish knife sales.

Knife companies, like other manufacturers, are trying to balance production against sales orders. Unfortunately, knife companies are out there with a high level of knives produced before the severity of this current economic slowdown was clear.

In the past, knife companies found themselves in a similar dilemma, that is a substantial inventory on hand and insufficient demand through their normal channels to absorb it within a reasonable period of time.

Knife inventory represents precious capital.

J P King Auction Did you know cutlery history provides us examples of knife companies actually cooperating together during tough economic times to sell off their respective knife inventory?

Knife companies joined forces to hold gigantic knife auctions.

gavelA large two day auction of pocket knives and other cutlery was held on February 13 & 14, 1877.  John Russell Cutlery Company, Meriden Cutlery Company, Lamson & Goodnow, Frary & Clark, Beaver Falls and Chicago Cutlery contributed inventory. The New York Times reported “..the prices obtained were extremely satisfactory, being well up to current market prices. There was a very large attendance, including representatives of the leading houses in Boston, Philadelphia, Cincinnati, Chicago, Baltimore, and even San Francisco.”

gavelAlso another very large 4 day sale conducted in New York that same year. The knife inventory was contributed directly from the manufacturers. Buyers came from all over the country, including 156 wholesale and dealer firms, as reported in the August 13th 1877 edition of The New York Times. The articles also notes, “Prices ran well, and the sale is said to indicate that there will be a good demand for cutlery this fall and that prices will be stiffly maintained.”

gavelThe next year another auction was held for “large quantities of hunting knives, pocket knives, skinning knives, sticking knives, and other similar articles.” The two day auction was held July 24 & 25, 1878 and was reported by The New York Times. The article states, “Bidding was spirited and fair prices realized.” And while a lot might contain a single knife or dozens of knives, in all 2481 lots were offered.

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With the advances in technology, compared to the late 1800s, the auction bidding could be simultaneously offered online and “live” right from the auction room. The firms with inventory in the auction would be allowed to set up booths outside the auction ballroom to promote their firm- much like a huge knife show- but the difference is the real purpose behind the event would be the auction, unlike today, where the auctions are but a side note to the knife shows.

Wouldn’t it be exciting to attend an auction of current production knives represented by all the top knife manufacturers?

It would be hotter than the Blade Show and the SHOT Show combined!

Photo credit: J P King Auction Company

W R Case lays off 45 additional associates

caselogoReporting some knife collector news is not fun and this “news” is one of those. Last week, Case announced its third round of lay-offs this year. As reported in the Bradford Era, last Thursday Case laid off an additional 45 associates.

The culprit of the 154 layoffs is the current economic conditions we are in the middle of here in the US. Folks have tightened their belts and are holding off on buying non-necessities, even to the point of purchasing fewer knives.

“Reducing our work forces is an unfortunate outcome of the current economic environment. We will continue to evaluate our staffing needs until the economy regains strength.” said Chief Executive Officer Tom Arrowsmith in the release put out by the company the end of last week and as reported in the Bradford paper.

Case is continuing to develop new knife offerings to stimulate sales and hopes it will be in a position to bring back these associates in the future.

Published in: on July 9, 2009 at 10:10 am  Leave a Comment  
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For the knife fan with all the toys

Earlier this week, we reported Victorinox diversifying its product line by offering non-knife items, like perfume, watches and other personal items.

For the knife fan with all the toys

For the knife fan with all the toys

Now they are really stepping out with a joint venture with Airstream– maker of high-end recreational travel trailers. The two are now offering the ultimate knife guy’s toy- great for hitting the show circuit in.

This special edition Airstream commemorates Victorinox’s 125 anniversary. It comes loaded- the Airstream way and is only a cool $59,000. I’m sure they are only offering this as a limited edition so better hurry to reserve yours today.

Now there is no excuse for not taking the whole family on the road with you.

Just think, you will have it paid by saving on the hotel rooms for the shows- 789 nights stay at $75 per night room charge and you will have paid for this puppy. Sounds like a deal to me. This assumes you can park it somewhere for free and doesn’t include the extra gas you’d burn pulling it.

OK, so most of us won’t live long enough to stay that many nights at shows, but my gracious, we can’t cost justify most of our knife purchases either and we bought them anyway :).

Thanks to KC’s Tech blog for making us aware of this opportunity.

Published in: on May 21, 2009 at 5:14 am  Leave a Comment  
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Popular Swiss Knife Maker Diversifying Product Line

What does a knife manufacturer whose brand is known worldwide do when times get tough? It diversifies.

logo_victorinoxVictorinox, the 125 year old Swiss knife maker, is now offering watches, shirts and perfume to bolster profits.

This old cutlery firm is the maker of the original Swiss Army Knife, first issued to the Swiss military in 1897.

In an recent interview with Reuters News Service, Victorinox Chief Executive, Carl Elsner said the new product line is breathing new life into the brand.

Two recent episodes- 9.11.2001 and the current credit crunch caused the firm to look outside cutlery for revenue by capitalizing on it brand’s recognition.

The firm posted a net profit of $436 million in 2008 evidencing its recovery from the decline in its knife sales resulting from the war of terror, and then came the current “credit crunch.” Mr. Elsener said in his interview this year has been the hardest year in the history of Victorinox.

safflash-2This old firm hasn’t rested on its laurels though. If you are a Swiss army knife fan undoubtedly you have noticed their recent innovations. Here’s my favorite-

Wrench and Tool Knives

guppiecrkI’ve already admitted to you earlier this week I am a gadget nut. I like unusual inventions. Today, if you want a knife gadget you get something like the Guppie by CRKT.

The newest ones are cool, but to most knife collectors our preference is even odder than that.

homeimprovI have never considered myself a tool/wrench knife collector (probably like most folks who own knives, but don’t consider themselves collectors either), but let’s just say a have a few. The other odd fact is I’m not a tool guy at all, but even still I like old wrench and plier knives.

The other day, I ran across Multi-tool.org and their section on vintage wrenches & knife tools. I was reminded I had a couple.

These are the  wrench knife combo made by the same knife company- the Cattaraugus Cutlery Company, Little Valley, NY. In fact, Tint Champlin, the son of founder, actually invented and patented their first knife wrench.

Knife Tool Patent granted to Tint Champlin in 1918.

Knife Wrench Combo Patent granted to Tint Champlin in 1918.

Cattaraugus Combo Knife and Wrench pre-1918

Cattaraugus Combo Knife and Wrench pre-1918

Now here’s the real deal. Pretty primitive looking isn’t it? The knife was only made for a couple of years and is extremely rare.

On the wrench part of the knife it has “PATENT APPLIED FOR.” The patent drawing shows a date of March 8, 1917, so who knows if it was before that or not. It was patented March 5, 1818.

1- W Cattaraugus Wrench Knife- 1920s

Cattaraugus 1- W Wrench Knife- about 1920

Cattaraugus began selling the 1- W combo knife tool next and around 1920.

Cattaraugus 3-W Wrench Knife

Cattaraugus 3-W Wrench Knife- early 1920s

Around the same time came the 3- W (don’t know what happened to the 2-W?).

Cattaraugus Cutlery Co. catalog from 1922 actually shows this model as the earlier 3- W.

The other 3- W pictured in Levine’s 4th Edition is from the 1930s. The differences are the form/shape of the cap lifter. The more recent one is very pointed.

1922 Cattaraugus catalog showing the 1-W and early 3-W model

1922 Cattaraugus catalog showing the 1-W and early 3-W model

3-w

The earlier model 3-W

Here’s a 3- W that went off on eBay yesterday. It sold for $482.

Obviously, these knives were our modern-day tool’s predecessors. Thought you would enjoy.

I’m doing a little digging on the old plier knives too, but that is for another day.

Source: Dewey Ferguson’s Cattaraugus Cutlery Co. catalog reprint.

Case lays off additional workers

caselogoBREAKING NEWS- The Pittsburg Post-Gazette reported today, W R Case & Sons Cutlery Co. of Bradford, Pa. laid off 78 more employees. This is the second workforce reduction this year.

Case puts knives on sale in first-ever Spring Sales Event

casespringsaleW R Case announced a “Spring Sales Event” by discounting knives through participating dealers. According to Case, this is the first time in its history to run a spring sales event. Unprecendented times call for unprecedented actions and Case is getting out of its box to increase sales and move inventory.

Published in: on March 20, 2009 at 5:39 am  Leave a Comment  
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Think you are buying a knife soon, well think again. You may have already bought it.

217441_f520Many people not familiar with the sales process think the purchase is made at the cash register, or when clicking a button on the keyboard. Retailers know the purchase is made before then. And this fact is known among the Knife Industry too, and for a long time.

 

“Millions of dollars’ worth of cutlery is purchased everyday by people on the sidewalks looking in at window displays. Although the actual transaction takes place in the store, the decision to buy is made standing on the street.”                                                  The Cutlery Journal, December 1931

While most of us no longer walk down Main Street, we may, however, drive through town while on our way to check out knives at the Bass Pro Shop or WalMart .

So, is the decision to buy made at the point we are walking up and down the isles looking over their knives?

In some cases, yes, but most of the time we made the decision even before that point. Knife companies know we decide to buy very early in the sales process, and sometimes at the point we first see a knife. Because of this, they place ads and messages everywhere we are sure to see them. We know about ads in magazines and on websites, but what about the ones on the drive over to the store?

Here’s one of my all time favorites. And while it isn’t for a knife we carry or collector, it is one we regularly use.

knifeoutdoor

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Henckels, the knife company advertising along the roadway, was born on June 13, 1731, when Peter Henckels registered the Gemini twin (Zwilling) with the Cutlers’s Guild in Solingen. 278 years later the knife manufacturer from Germany is a global player.

Editors note: This photo was not altered by CNJ. We have contacted the US division of Henckels to verify the billboard’s legitimacy and are waiting for a response from their corporate headquarters in Germany, however, based on our research to date, we believe it to be authentic.

 

Knife marketing and RAT Cutlery Company

Weekend Edition

Knives come in a wide variety of shapes, sizes and designs. 

Many of us have different knives for different uses, and moods. Kind of like hats and boots, and if you are like me, I decide which to wear based on what I’m going to do and what kind of mood I’m in.

There are about as many knife makers as there are different kinds of knives, and as I watch the knife industry and its players I pay attention to how each knife company brands itself. How it attempts to separate itself from competitors and the message points in its advertisements. 

One company’s ad gets my attention every time.

ratcutlery

 

And while it catches my eye for more than one reason, I find their location to be of particular interest. The firm is based here in Sweet Home Alabama- Gallant, Alabama to be exact.  

The firm’s name is one you probably have seen before and you may even own one of their knives. It is RAT Cutlery Company

I was reading through the current issue of Blade Mag and noticed this ad again, so I decided to google map Gallant.

Would you believe they are only 20 minutes away?

I acted on a wild hair and emailed the owners requesting a time I could come visit on behalf of CNJ. Later that night, I got a favorable reply. So, in March I’m going to go check out this knife maker and it should be interesting. I’ll report back.

Published in: on February 21, 2009 at 10:25 am  Comments (6)  
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