In case you haven’t heard- The Great Recession is over

It’s OK to start buying knives again. Spread the word.

grecessionThe Great Recession is technically over. Yes, the U. S. Government is officially calling an end to the worst economic period since the Great Depression. The U.S. economy expanded at a 3.5% annual pace in the third quarter, as massive government stimulus helped drag the economy out of the longest and deepest recession since the 1930s, the Commerce Department estimated last week.

moneyAnd while we still have some serious issues, if what we’re told is correct, we spent our way out of a bona fide depression (if that is really possible. I know I couldn’t do it-  I’d just get deeper into debt). That is good news, cause back around the end of last year things looked dire. Business screeched to a halt due to the tremendous uncertainty that permeated decisions at all levels.

We know it hit the knife industry hard, as buyers pulled back. But the storm is now over, so knife sales should now pick up, right? Production return back to normal, re-hiring at the plants and new product lines introduced. You know I’m only a knife collector, not an economist, but I think this is what’s supposed to happen. Isn’t it?

christmasI know unemployment nationally is 10.2%, home values have yet to stabilize (despite what NAR says) and folks are still struggling like nobody’s business, but they’re telling us The Great Recession is now over …..and just in time for Christmas.

Image Source: assets3.blurb.com, giantrobot.com, hittingmetalwithahammer.com

Published in: on November 9, 2009 at 11:54 pm  Comments (1)  
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Land of the Free. Home of the Brave. But you can’t sell that here!

Don’t you love America? Our country provides the ability to pursue our dreams, live relatively unencumbered by the demands and restrictions place on us by  neighbors and fellow citizens, and we can pursue jobs, lifestyles and even hobbies we want here. Want to take a vacation- subject to your understanding with your employer- you can strike a trot and to anywhere you want to go. Coast to coast.

webeknivessfYou can even start a business if you want. The purest symbol of the American Dream, and yet, there is one obstacle you will immediately run head on into if you do- and that is WHERE YOU PUT IT. All across this great land of ours entrepreneurs are restricted in the location of their own business by what is called “Zoning Ordinances.”

It’s just a cute little knife shop

Let’s say you want to open a neighborhood knife shop. That little knife shop can only be located where it is allowed. The good news is though theses restrictions are determined by the local municipality, either city or, in some cases, the country (or Parish). So at least you can have an active voice in laws that are enacted based on you community’s needs and desires- in theory, and in the case of businesses, this includes where they can locate.

I’m concerned there is coming a day real soon when businesses that sell “dangerous” items will have increased restrictions- to the point to where they can’t be located where the customers are.

freedomfastfood

Hold on there- you can’t sell that here

If you think I’m reaching here, consider this- right now we have the Federal Government (not city or county, mind you) preparing to lord it over us by requiring businesses to stop selling or limiting FOOD to their customers.

cover.phpA newly released Government Report calls for unprecedented actions by our local government to put a restriction on businesses and in this case, it pertains not to knives, but to “harmful fast foods.” I’m not kidding either.

“A newly released government report details strategies for local governments to combat what it calls an epidemic of childhood obesity, including enacting zoning and land-use regulations that would “restrict fast food establishments near school grounds and public playgrounds.” CNSNEWS.com

The report is entitled: Local Government Actions to Prevent Childhood Obesity.

Don’t get me wrong, BUT…

I don’t want to get cynical here, BUT….well, let me first say, I’m all for healthy kids, and adults, for that matter,- BUT, I just wonder how many of our tax dollars went to study this. And second, seems to me to be one of the ways the Federal Gov. is going to try to enact national health care. As a business owner, I can understand, inflow and outflow of dollars. If I can cause folks to be healthier then less dollars will be spent, and yet, this is purely another example of an ever growing pervasiveness of Federal Government control.

Tell me knives (and guns) don’t potentially offer a more dangerous “threat” to society than what we choose to eat- so, Bass Pro Shop, Outdoor World, Wal-Mart, local hardware stores- all had better watch out. We all know they sell items that can be potentially dangerous too. If the gov can strong arm our local governments to restrict fast food locations (or what they can sell) don’t think they won’t other businesses too.

So, in the end, it is very important for us to make our voices heard and to soak in the “Life Liberty and Pursuit of Happiness” while we still can.

This is an editorial and the opinions expressed by the writer are not necessarily the opinions of Cutlery News Journal 🙂

Published in: on September 8, 2009 at 4:58 pm  Comments (1)  
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A lesson from cutlery history: Getting knife buyers to buy

bluelightIn hard economic times what is the most common approach used by retailers and knife company dealers to sell more knives? You guessed it- cut the prices.

Today, there is no doubt everyone involved in selling goods and services is feeling the pinch of consumers pulling back. The tightening of the purse strings started back around October of last year. Since then it seems everyone is running a sale.

Got an email notice from a knife manufacturer just yesterday about a “One-half off for one day only” sale.

One Case dealer in North Carolina ran a special on all Case knives for 20% off. The business owner commented after the sale, “We actually made a few sales that day.”

But this phenomenon of running a sale to move merchandise- and in our case, knives is nothing new. In fact, it was such a problem in the 1930’s a cutlery publication tried to rein in the knife industry through a series of editorials and articles.

painescutjrnlmastheadOne  such example-  June 1932 edition of Paine’s Cutlery Journal reported, “It is suicide, of course, to merely slash prices in order to get business, and the business man who thinks he can beat a cost plus profit basis better give up now.”

In many cases, the answer, according the PCJ was more and continued advertising. If one subscribes to this theory, then today the approach would be broader than simply advertising- running ads- it’s having a strong market presence and brand awareness to help achieve what is called in the marketing world as “top of mind consciousness” among the targeted group. And in a highly fragmented market, like we have today, one of the best approaches knife companies and dealers have is to go where the knife collectors and buyers spend a great deal of time- online.

The weak economy continues to impact Knife Industry

BuckLogoLast week, Buck Knives announced it was cutting 200 employees salary to hold its own through these uncertain economic times.

The Coeur d’Alene Press reported the Post Falls, Idaho knife company, one of the largest employers in Northern Idaho, made a 10 percent reduction in pay and/or work hours. While the company hasn’t had layoffs in several months this move is a result of “economic woes endured by Buck’s customers” that continues to impact Buck according to Phil Duckett, Buck COO in an interview with staff writer Brian Walker. Buck had multiple layoffs during 2008.

“One of our significant customers is off- plan over 20%, and we have had multiple customers file for bankruptcy,” Ducket said. “(Those) are the major factors in the action we’ve taken.”

Published in: on August 9, 2009 at 12:30 pm  Leave a Comment  
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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.

The tale of two knife sales- Conclusion

This is the tale of two knife sales.

Knife #2

The WR Case Jumbo I bought to sell on eBay for a test

In the Introduction, I shared with you rarely do we have a true comparison of two virtually identical knife sales to provide us with the buyers price differentiation between knife grade conditions. And that I bought a knife to put up on eBay to see how it would compare to a better quality one that was already up for auction on the same site.

Then we saw in Part I- the challenges we collectors face trying to value knives and why this test would be so interesting. Part II- established why past sales are the best gauge of value even though it is so rare to have identical knives being sold at auction at the same time.

These auctions will also provide us a snap-shot of value in the current economic conditions and then to be able to compare them to same knife sales of the last few years.

Now in the conclusion of my experiment, I want you to see the knives and the auctions results. Then we’ll end with my observations.

These knives- two W. R. Case  Jumbo Swellcenter Elephant Toenails (sunfish) offered me for the first time since I started knife collecting a real apples-to-apples sales comparison of two identical knives each with a different grade condition and the buyers’ judgment of their price differences.

And now for the knives and their auctions

These two knives represent one of the most sought-after styles of the elephant toenail pattern.

Veteran knife dealer, Mr. Joe Seale said in an interview I conducted with him in June of 2003, that he usually doesn’t keep a Swellcenter for more than two months- even though this style toenail represents the highest price of the three different styles.

In case you have wondered why I chose to run the test on this knife, well, it is my most favorite- that’s why. I have tracked this style toenail closely over the years. This test also allowed me to see what is happening to values as we go through the worst economy since the Great Depression.

The Two Knife Sales

Knife #1– W R Case & Sons Cutlery Co., Bradford, Pa  Jumbo Swellcenter Elephant Toenail. Excellent Condition

Knife #2– W R Case & Sons Cutlery Co., Bradford, Pa  Jumbo Swellcenter Elephant Toenail. Very Good Condition

Note: The significant masterblade wear on Knife #2 compared with knife #1 and yet, Knife #1 is about 87-90% full. Knife #1 was cleaned. Knife #2 is a real example of a used jumbo (they were hard-core work knives, you know).

Auction Results

  • Knife #1-the Excellent condition knife brought $2595.
  • Knife #2- the Very Good condition knife brought $1200.

Wrap up & General Observations

Clearly we find a measurable difference between the conditions of these two knives and their prices/ values. Originally, I thought Knife #1 would go higher, possibly to $3000. My guess on Knife #2 had it bringing $1300 to $1500.

If the EX brought two times plus more than the VG one, that the grade condition discount is 50%. I’m not willing to go that far and apply that ratio across the board.

While the demand historically has been strong, Mr. Seale also shared with me that only 2% of collectors buy knives over $500. This tells us these knives have a limited buying market than a more affordable pattern or style. I tend to agree with the position he holds regarding high-end knife buyers-

“High-end knife collectors as a group have the where-with-all to be able to purchase the rare ones in the best condition.”

Translation- The discount for less than EX is going to be greater for high-end knives, not just in dollars, but as a percentage. I believe this was evident in this test. There is weaker price support for knives in “marginal” collector condition. This may, or may not, be the result of the heavy emphasis on the “Buy Only Mint Condition” mantra I have seen preached and heard ever since I started collecting. But I don’t know.

The result of this test provides good news for knife owners and potential sellers. It demonstrates there is good demand and price support in the market right now.


FYI- I know of a Near Mint condition W. R. Case Jumbo Swellcenter with the exact same handles and jigging that sold for $4000 in 2004.



UK’s third largest retailer stops selling knives and the power of political correctness

bandwagon

Other UK companies will now be forced to jump on the bandwagon too

There comes a point when companies bow to the pressure of political correctness. On Friday, the third largest retailer in the UK announced it will no longer sell knives at its stores.

The company voluntarily made this decision even though knives aren’t banned, yet there is a political movement to rid the country of knives. Pressure has been growing for months now for the retailers to stop selling knives. And as recently reported here on CNJ,  eBay caved to the pressure there by voluntarily banning its knife sales too.

The East of England Co-op operates stores throughout the country. The chief executive for the company said all the politically correct PR spin when making this announcement, but the truth is had they not made this decision-

  1. Their stores would be subjected to never-ending sting operations to try to get their clerks to sell to minors
  2. The company would be viewed as contributing to knife crimes
  3. It would have cost the company more money in the long run

What does the UK have to do with the US?

The PC crowd here in the US has already successfully associated knives with weapons. That was the first step.

Mr. Obama presenting the "Doing the Right Thing Award"

Mr. Obama would present the "Doing the Right Thing Award"

Now imagine, as a result of political correctness pressure, WalMart (Sears, Lowes or Home Depot) announcing it would no longer sell knives. They’d be hailed as hero’s- looking out for the best interest of the country, over their own. I’ll bet our President would even give them the “Doing the Right Thing Award.”

Here’s where the power of political correctness is magnified-

Do you think the other large retailers would want to be viewed as not doing the right thing?

Of course they wouldn’t. And pressure would mount for them to stop selling knives too. They would probably be boycotted by shoppers. They’d be labeled- greedy capitalistic companies– companies that are not only contributing to, but are even profiting from, knife violence and youth deaths.

All it would take is for one medium to large company here in the US to stand up and say “No more knife sales at our stores” for it to sweep our nation too. It could even be started by an international retailer with a US presence.

It would be the snowball effect from there. The other companies unfortunately would be stuck in the- “Damned if you do and damned if you don’t” situation. And I think I know what their final decision would be. More getting on the bandwagon.

Then the politicians jump in

Politicians would jump on the bandwagon in a heartbeat

Politicians would jump on the bandwagon in a heartbeat

If this situation played out, it would also provide an opportune platform for our politicians to get on the bandwagon too. They’d propose a national knife law.

I can hear their rhetoric now- “While this is an unpopular decision as knives have been a important part of American heritage, nevertheless, it is the “right thing to do for the youth of our country.” Blah, Blah, Blah.

Meanwhile the bandwagon is packed out.

If this scenario came to fruition here in the US, as it appears it is in the UK, it would illustrate the power of political correctness to take down entire industries, and in this case, it would be the knife industry.

Photo credits:Kennedy -Tim Sloan/AFP/Getty Images, Obama- AP/Alex Brandon

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

******

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.

 

eBay Bans Knife Sales

ebayeBay says it will ban all knife sales, except table cutlery, on its UK and Ireland websites.

eBay’s ban is in response to the BBC ‘s Watchdog purchase of illegal knives on two of its sites. eBay is currently the largest auctioneer of knives.

The knives were purchased by this group from US sellers.

One of the knives purchased

One of the illegal knives purchased

eBay said they had security measures in place to make sure only legal knives are offered by UK and Irish sellers on these sites, however, they have concluded the only way to control sellers from outside those two countries was to ban all knife sales from their UK and Ireland sites.

“Safety is our number one priority and we recognise we need to do more to protect our members. Therefore, we are reviewing our position with regards to the sale of all knives on eBay, including those currently permitted by law,” said the eBay spokesman.

 

 BBC’s Watchdog Video Report on Illegal Knife Sales on eBay

Published in: on February 9, 2009 at 9:26 pm  Leave a Comment  
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Gun & Ammo Record Breaking Sales Continue

800px-houston_gun_show_at_the_george_r_brown_convention_centerWithout getting into the politics of it, have you been following the stories on gun sales in the last couple of weeks?

CNJ ran a story a month and a half ago, and it appears the gun and ammo sales are still up measurably.

The contributing factors are two-fold according to Victor Bean, the organizer of the show held last Saturday in Jax, FL.

The Jacksonville.com news reports-

“Bean attributed what he called a record turnout and the massive upswing in business to two factors — a rumored crackdown on gun ownership by the incoming Obama administration and a possible rise in crime precipitated by the economy’s sharp downturn.”

 I suspect, being a “gun show promoter,” he is hyping it for his next show, but according to the Jax paper attendance on Saturday was 5000 folks- up from about 2000 in Sept for the same show.

Here’s another from this past weekend in Louisville. Different show circuit. Different promoter. Kenny Woods’ Gun & Knife Show

Here’s what Google News has pulled back on the increase of gun and ammo sales, as of 8:42 Monday nite. It is kinda scary actually.

So, what does this spending money on ammo and guns mean for knife sales? Not sure, but one retailer said, his knife sales were down. He attributed it to folks spending their money on guns right now.

Published in: on December 30, 2008 at 6:30 am  Leave a Comment  
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