The author’s system is designed to help you accurately price custom knives.

After I wrote a recent BLADE® article on custom knife pricing, editor Steve Shackleford suggested I write a follow-up on the system I use to price custom knives—Robertson’s Maker Market Matrix or RM3. I wrote it to provide a basic guide for each collector or maker on how to do their own pricing. You can find many examples of weighted score tables with a quick Internet search.

A collection or business is a very individual thing. The research required to create a successful Matrix for either one depends on the individual doing it. Let’s dive in.

Market Position

A maker’s position in a market is not always apparent. While in graduate school, I wrote a paper on the impact of pricing and how it can apply to products. As a custom knife dealer, I was looking for a business advantage. I applied the findings in my paper to my business.

I opened my copy of KNIVES ’92 and, using a weighted score table, started to compare makers I found in the book’s index. Initially, I placed the knives in recognized categories, for example, hunters, fighters, bowies, tactical folders, etc. I wanted to compare similar knives/apples to apples. Each category had several hundred entrants.

My goal was to create a top-third, middle-third and bottom-third strata. This is where the weighted aspect of the table comes in. I developed essential criteria, such as quality of work, demand in the primary market, demand in the aftermarket, materials used, delivery time, awards and other gauges. Once I established the criteria, I gave each criterion an importance weight.   

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Maker: Steve Randall  
Model: Feather Damascus Fighter  
Blade Length: 8”
Overall Length: 14”
Blade Steel: Feather Pattern Damascus 
Guard Material: Feather Pattern Damascus  
Handle Material: Ancient Walrus Ivory  
Author’s Comments: “Steve is the quintessential ABS master smith. He is versatile, inquisitive, loves a challenge and always strives for perfection in every aspect of his knifemaking.” (Robertson’s Custom Cutlery image)

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After the Matrix determined the maker’s position in the strata, the ultimate goal of the RM3 took shape in determining which makers’ prices accurately reflected their position in a particular market sector. My research showed that hundreds of makers’ prices were above their position in the market. In other words, many of these makers who were in the second strata were asking first-strata prices. The same was true for third-strata makers asking second-strata prices. The main reason for this is that the makers asked their knifemaking friends to price their knives.

Knifemakers are not knife buyers and, as such, generally do not have a real sense of what knives should sell for. This is especially true if they don’t know their market position. Additionally, asking your competitors/fellow makers to price your knives is not a recommended business strategy.

Among other things, one aspect of the RM3 I was surprised to find is that it identified makers who offered value pricing. At first glance, many people mistakenly think this means the least expensive price. Instead, given the maker’s position in the market, a value price provides the buyer value regardless of the price tag. The makers who came to my attention were those pricing their knives commensurate with the pricing in lower strata, e.g., a first-strata maker asking for a second-strata price.

Blade Game

When knife shows or knife sales are slow, the blame game begins. The reasons for the slowdowns usually center around the show promoter not doing the job. The economy is a favorite reason, along with the weather, lighting and position in the room. A maker once told me his sales were slow because he was facing a wall. Note that we were in a square room; everyone was facing a wall. What seldom, if ever, is brought up as a reason for slow sales is the maker’s prices.

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Maker: Jimmy Lile 
Model: 20th Anniversary SLY II Fighter 
Blade Length: 6”
Overall Length: 10.5”
Blade Steel: 440C stainless
Blade Finish: Bead blast 
Guard Material: Stainless steel 
Handle Material: Aluminum tube w/cord wrapping 
Author’s comments: “A BLADE Magazine Cutlery Hall-of-Fame® member, Jimmy did more to introduce the knife world to the tactical fixed blade than any other custom knifemaker. This young infantry lieutenant saw a Rambo movie and it changed my world.” (Robertson’s Custom Cutlery image)

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Very few people will tell makers their prices are too high, as makers can be touchy about their pricing. At the same time, few makers ask collectors or buyers what they think of their knives. This interaction is a prime opportunity for a maker to work on his or her Matrix. Further, this is an opportunity to educate the collector on why the maker’s knives are priced the way they are, and to give the collector a chance to work on his or her Matrix.

I cannot overstate how vital this flow of information is for both the maker and the collector. For the past 30+ years, at every show I have attended I have heard, “Les, come and look at my knives and tell me what you think.” I have the utmost respect for the makers who ask me to do that. It can be daunting for a maker to ask someone to critique the maker’s knives and prices. A quick “good job” may be nice for the maker’s ego, but a critical examination of the work and pricing will ultimately improve the maker’s knives and bottom line. 

Hype Cycle

The Hype Cycle occurs when a custom knife market sector takes center stage. In 1988, interframe folders were all the rage—many sold for over $10,000 each. In 2001, I bought one of the same knives for $600 at an auction. The original sale price was $14,000. What happened? Answer: the Hype Cycle. The hype drove up the prices, and when the hype went away, the prices crashed. The Hype Cycle is a Matrix killer as prices become skewed to the point that they are unsustainable. 

Whether you’re a collector or a maker, the Matrix can benefit you. Identifying the maker’s position in the market aids in an appropriate price, thus increasing sales for the maker. At the same time, it gives the collector a chance to sell or trade a knife at a fair price in the aftermarket, as it is in the aftermarket where collectors pay to go to school. 

Custom knife markets are small cycles inside of larger cycles. New criteria will always enter a Matrix. Consequently, both makers and collectors must be sensitive to the ever-changing markets. Retirements, new materials, awards, bad reviews and other factors can all impact pricing.

R&T

Reading this, some may think the RM3 is a quick and easy solution for pricing knives. I assure you, it is not. The amount of research and time you put into your Matrix will directly affect your ability as a collector or as a maker to identify the maker’s position in his or her market. It also will give valuable insight as to whether the maker is offering value pricing. Makers will gain useful knowledge on how to price their knives correctly for their position in the market, helping them eliminate the blame game.

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Maker: David Broadwell   
Model: MLR Sub-Hilt Fighter 
Blade Length: 8”
Overall Length: 14”
Blade Steel: Wolf’s Tooth Pattern Damascus Guard, Sub-Hilt and Pommel Material: Wolf’s Tooth Pattern Damascus
Handle Material: Ancient Walrus Ivory  
Author’s Comments: “Dave has been making some of the finest sub-hilt fighters for over 40 years. His knives are the epitome of the 4 F’s; Fit, Finish, Form and Function.” (Robertson’s Custom Cutlery image)

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More On the Robertson Matrix

How do you give what you call an “importance weight” to each criterion in a Matrix? What makes specific criteria more important than others?
ROBERTSON: One criterion that has moved up my list and now carries more weight is customer service. We deal in so much poor customer service in our everyday lives. We don’t need this in our hobby. I am still amazed at the number of clients who tell me they have emailed or called a maker, often several times, with no response. Everyone is busy but it takes literally 60 seconds to respond to an email acknowledging receipt and indicating a response will be forthcoming asap. Those makers who don’t respond in a timely manner are telling you it is about them and not you. If they are making it difficult for you to give them your money, don’t. 

What makes the ratings for your criteria change?
ROBERTSON: Actually, it is the ratings of knife organizations that have caused me to change the weight the ratings carry in my criteria. When I first started in custom knives, to be a Knifemakers’ Guild voting member carried a lot of weight in the knifemaking community. Today the Guild is more of a club, though still a good idea that provides insight and help for makers. For me, at least, if a maker tells me he or she is a Guild voting member, that mostly tells me the maker is serious and has shown improvement in his or her knifemaking skills over the years, but it does not carry the weight in my criteria it once did.

How often do you update the ratings, and why?
ROBERTSON: The custom knife market is never static and is always evolving.  This evolution demands that weight associated with each criterion evolve as well. The weight I associate with a particular maker changes with the maker’s ability to incorporate the changes the collectors want, be it materials or design elements.

How often do you change the criteria themselves, and why?
LES ROBERTSON: I’m generally one-to-two years ahead of where a market sector that interests me is going. Given this extended lead time, I often have to account for new information and tweaking of the weight within a particular criterion or the criterion itself. Perhaps the most difficult aspect of this is to not put too much weight into a criterion due to my personal biases. In other words, just because a particular style of knife is my favorite does not mean the majority of other collectors feel the same way. I try to take my feelings out of the equation and I am not always successful. The Matrix is not an exact science.

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