Investing in Custom Knives: Part 3 of 5
3. Value Pricing
Many people mistakenly think this means the best price or cheapest price. In fact, a value price is one that, given the maker’s position in the custom knife market, provides the buyer a value, regardless of the price tag. Basically, this price offers the potential for the knife to hold its value. In some cases, the purchase price will enable the owner to sell the knife for a profit.
Custom knifemakers are considered to be the primary market. That is to say buying from them directly will eliminate any previous owner. Whereas the aftermarket is specifically comprised of previously owned knives. This ranges from a used/carried/sharpened knife to those who have never been used/carried/sharpened. The custom knives in the latter category dominates the sector of the aftermarket where those who buy and resell or “flip” operate. You have probably seen videos or photos of the owners showing off their knives while wearing some type of glove on their hands. This is especially true if something like Timascus is used.
The custom knife market moves in cycles. From 2000 to 2010 forged blades seemed to dominate the market. Starting in 2009 as interest waned in forged blades, tactical folders became popular again. Over the last 9 years, the tactical folder market saw buyers with the ability to “flip” a knife for almost an instant profit in the aftermarket. Starting in late 2016, the aftermarket started to cool. Today for many that market has become stagnant. The reason for this is and the waning market for forged blades in the early part of the 21st Century is the same.
Increased demand lead to escalating prices. This led to more collectors being shut out of that particular market sector. I have always stated that “collectors want to collect.” Meaning simply collectors want to add to their collections. If they can’t participate in a particular style or type of knife, they will turn their collector’s eye to another style or type of knife leaving the bloated (prices) behind for knives that are priced on the makers position in the market and not the hyped up aftermarket. Unfortunately for many who either didn’t read my article about tactical folders in Blade in March 2016 (or ignored it), they now have knives in their possession that they will never get even close to what they paid for it. While this may not be an issue for collectors. It is an issue for investors!
There is short term investing and long-term investing. With regards to custom knives, the best is probably short term collecting. That can be anywhere from immediate re-sale to 2-3 years. A mistake often made by investors/collectors is that they think the particular market they are in will keep going up. In 2000 to 2007 flipping houses became all the rage. Multiple TV shows, books, magazines and commercials talked about professionals coming to your town to teach you the secrets. Most of us were familiar with what happened in 2008. Ten years later there are some people still underwater in their mortgage. Generally, this is why short term investing is the way to go.
More on Short-Term Investing in this 5-part blog on Investing in Custom Knives.
Robertson’s Custom Cutlery is your source for custom knives from today’s leading custom knife makers. We only feature the highest quality knives at value prices. Our custom fixed and folding knife selection includes tactical fixed and folding knives, presentation fixed and folding knives, bowies, hunters and skinners, and a large selection of forged blades. Les Robertson, author and owner of Robertson’s Custom Cutlery, is also a Field Editor for Blade Magazine and an instructor at Blade University. If you have questions about the content in this article or about any knife or maker on our website, you can contact Les directly at firstname.lastname@example.org or (706) 650-0252.