Spyderco, Japanese knives, and cost vs. materials

[dplafoll]

So let me start by saying I absolutely do not intend this thread as a criticism in a negative sense. Instead, I intend it as positive, and as information-seeking. After reading the new catalog and hearing some discussion of this, it prompted me to seek a more "official" response.

I've read and heard and talked to folks and have felt myself for a while that the higher-end Spyderco knives coming from Japan are... confusingly-priced for the materials involved. Or, perhaps, they are confusingly-built for the price. They come with plain handles, usually black G-10, and are in VG-10 steel. But, they're often priced higher than would seem, to me, appropriate for the materials.
Examples: Ouroboros, Introvert, Tatanka, Starmate, Junior, Q-Ball, Lil'Temperance 3, Roc, Mike Draper (yes, Ti, but still VG-10).

I know that these are all knives that will work well for what they are. And I'm not knocking G-10 or VG-10. he worst one, to me, is the Firefly. This one retails over $200, but it's just orange G-10 and VG-10, with a little carbon fiber (which could easily be just laminate). But if I'm going to pay that much, or the amount for some of these others, am I nuts for expecting a better steel at a minimum, and perhaps better handle materials? I'll take plain black G-10 if I can get better than VG-10, but either way, the cost vs. materials has already knocked multiple knives down my list because if I am spending that money I can get another Spyderco for the same or less but with better steel and probably a better handle.

I also get that Spyderco is trying to keep the cost down by using these materials. But what I don't get is how VG-10 and Japanese production can make the Ouroboros retail for $170. Is it a matter of scale and they don't make enough of some of these? I know the Golden knives are sold at an aggressive price, but are they really discounting the significantly-larger Para 2 with S30V by $45-50 in comparison? Does G-10 and steel liners really add $40 from the FRN VG-10 DF2 to the G-10 model? Is there not a middle-ground steel that is available in Japan at a reasonable price that would slot in between VG-10 and ZDP-189 that would allow these nicer knives to have an upgraded steel but not have to go with the increased cost of ZDP? Is this why there are rumors of S30V making its way over to Japan, probably to serve that purpose?

I really, really like the Ouroboros. But at around $170, I could get: Hungarian, Pingo, Military, S110V Military, Mantra/Mantra2, Positron, Foundry, Caly 3.5; and for not much more, knives like the Sage 2, Gayle Bradley, or around $200 instead of a Firefly you're getting into Techno, SpydieChef, Chaparral Ti, Domino/Dice, Stretch 2 ZDP-189. And drop down to $140-150, and there you have all kinds of PM2, Native 5, Manix 2 XL, Sage 3, Gayle Bradley 2 options. So when I was asked to make a wish list of Spydero knives recently, the Ouroboros fell down that list behind knives that give me better materials for the money, and the Ouroboros isn't interesting enough to overcome that difference with black G-10, VG-10 steel, and teflon washers. And those lists just now didn't include some of the more esoteric knives available in those prices as well.

Sorry for the wall of text, but I wanted to make sure I was being clear. TLDR: Why are G-10/VG-10 Japanese Spyderco knives so expensive with those materials?

[Blerv]

I've asked about price before and within the context of that thread Sal mentioned they rarely (if ever) build a knife with cost being a main factor.

If left to guess I expect their Japanese manufacturers need projects. Spyderco spreads the book of business to keep all the makers happy while keeping their specific skillsets in mind. This is also a business survival technique; if one maker folds they don't take Spyderco down with them. Further depending on volume and materials being used some knives just can't be reasonably built in certain locations. I understand the costs of making a modern folder in Japan is just slightly higher than Golden which are higher than Taiwan and China. I can only assume the labor wages of the two countries (Japan and USA) are similar so with shipping costs/tariffs that alone could be the MSRP difference.

I like Japanese Spyderco knives. The MSRP's, especially with fancy materials, tend to quickly scale out of my production folder budget. For what Japan did in the early days of Spyderco to get them off the ground I appreciate the loyalty and the mutual adventuresome spirit of tackling some of these products. No I'll never buy some of them and they may even face discontinuation but some people will and it adds to the colorful history of the companies.

Their approach is very interesting but seems to be working. My main critique is the product line canibalization with so many overlapping products...but again that doesn't seem to be a problem. Some of their models seem criminally cheap (like the 110v and ZDP FRN knives, Tenacious, Manix2 & Para2, etc) and others seem out of sorts (the "fancy" ones as mentioned). Then again, even the most exotic of collaborations are 2-5 times cheaper than the original custom. For many it's the only way to reasonably buy and use one of those.

[dplafoll]

Yeah, let me be sure to be clear: I absolutely love Japanese Spyderco knives. My entire Spyderco collection to this point is from Japan and Taiwan. It's just that overlap you mentioned that makes me buy one Spyderco over another, and cost vs. materials is one consideration.
And you are exactly right about the collaborations. I paid a lot for my Nirvana, and also saved a buttload on the design.

[ChrisinHove]

Economic factors will ebb and flow over time. Japanese exports may be relatively expensive right now, but that may change. If Spyderco abandon those relationships, they won't exist when they are needed or most beneficial.

[dplafoll]

Economic factors will ebb and flow over time. Japanese exports may be relatively expensive right now, but that may change. If Spyderco abandon those relationships, they won't exist when they are needed or most beneficial.

Absolutely, and I wouldn't suggest that they should stop working with those makers. I'm just wondering about what factors are in play at the moment.

[yablanowitz]

Two words: Exchange Rate. Any time you think a Japanese (or any other country) model looks too expensive for what it is, check the rate of exchange between that country's currency and ours. When the Yen is strong, Japanese models will cost more US Dollars.

Next factor, who designed it? In house designs don't have to pay out royalties the way collaborations do. If it has a mark other than Sal or Eric, someone else is getting paid, and that gets added to the price.

[Able Dog]

Exchange rate, import/export tariffs, manufacturing costs, and shipping to and from as already stated.

I also think that for some models there is a degree of R&D on the part of the Japanese manufacturers that need to be recouped with certain models. With G Sakai now working with steels like S30V and K390 for the first time it is likely to impact street cost.

While certain models seem unusually costly, the Ouroboros I suppose, others seem fairly reasonable. The added cost of shipping Böhler K390 to Japan, developing new tooling processes, and handling a steel that much more abrasion resistant only raised the cost of the Police 4 $30 or so for the customer (as compared to the $140 Police 3).

I just assume there is some reason why a knife costs what it does, and whenever an explanation is provided it usually makes sense. The only question I have then is, can I justify the cost to my own desires/needs.

[SpyderEdgeForever]

Here is a related question: What balancing of costs, profits, and other things would it take for them to make a knife that had, say, Tatanka or Paramilitary-level quality, with Byrd-level price, or, would such a thing not be very feasible given current manufacturing abilities?

[Bodog]

I don't think the Japanese knives offer a lot of "bang for the buck" like Taiwan or Golden knives do. In the $180 range I can buy a lot of good knives, step it up another $100 and I can get a great knife. I can get a Taiwan made Mantra for $160 brand new with M4 and nicely shaped titanium handles or I can get a Japanese made stretch for $210 brand new with ZDP-189 with slab G10 handles. That's not a hard choice.

I hate to say it but once you hit whatever price the Japanese made knives demand you can get something better, even if it's outside of the spyderco lineup. It's why I can't ever bring myself to buy a Japanese made spyderco knife. Or, and I know this is heresy, a spyderco fixed blade knife. The return on investment seems low unless you are just really determined to have that specific knife. But then your opinion becomes discredited because reasonableness has already been disproven and any attempt at neutrality is immediately failed because overt bias has been shown.

[zhyla]

I'd like to know the material cost of one of Spyderco's knives. I bet a regular G-10/stainless liner/VG-10 mid size knife is $15 in materials. Maybe less. People get so hung up on material cost. I know the high end steel costs a fair bit more than ordinary cutlery steel, but my point it's about the labor cost.

[dplafoll]

I'd like to know the material cost of one of Spyderco's knives. I bet a regular G-10/stainless liner/VG-10 mid size knife is $15 in materials. Maybe less. People get so hung up on material cost. I know the high end steel costs a fair bit more than ordinary cutlery steel, but my point it's about the labor cost.

That's part of my question here. The G-10 is probably all from China regardless of at which Spyderco plant/OEM the knife is made. And the steel liners are likely from a single or very few sources, and likely don't cost a lot. So the main costs are the blade steel and the labor, and then the various non-production factors come in, like exchange rate and production scale. I was hoping to find out what specific factors cause the Japaneses Spyderco knives to have a more premium price while being made of similar materials to less-expensive knives.

[sal]

Hi Dplafoll,

Interesting question and many good answers . Shipping is a big cost. Most of the G-10 used in Japanese knives is made in the US. Shipping a duties do add up. Now the Chinese G-10 makers are getting better at quality, so we're experimenting with that, but the Chinese Yuan is unfairly devalued, so it creates other issues. That's political which I prefer to avoid on this forum.

As mentioned, labor is the big cost, and that too is relevant to different countries.

Also, while VG-10 has been around for a long time, it is not a cheap steel and not easy to process. The quality of the processing of all materials requires higher skills. Training is a costly part of the equation.

We spend a great deal of time on pricing, with many details covered. We try to be fair to all. We still have to make enough money to cover our expenses and grow, but we are always conscious of the ELU and their money, and we believe that to charge as much as the market will bare is biting the hand that feeds you. The obvious answer is China, as many companies are doing, but we believe that has long term issues.

We understand your concerns and you need to know that we are always keeping you, the most important part of the business chain, in mind.

sal

[SG89]

Thanks Sal

[Bodog]

I know here in the US someone can import materials for manufacture and if immediately re-exported no duties are paid. Does the same thing apply to Japan? I'm sure your customs brokers are probably more knowledgeable about this stuff but I think we have agreements with China and Japan reciprocating. Free trade and all that. Gives people jobs without actually introducing goods into the county's commerce thereby keeping other jobs going within that country.

Are any of Spyderco's foreign factories free trade eligible?

[dplafoll]

Hi Dplafoll,

Interesting question and many good answers . Shipping is a big cost. Most of the G-10 used in Japanese knives is made in the US. Shipping a duties do add up. Now the Chinese G-10 makers are getting better at quality, so we're experimenting with that, but the Chinese Yuan is unfairly devalued, so it creates other issues. That's political which I prefer to avoid on this forum.

As mentioned, labor is the big cost, and that too is relevant to different countries.

Also, while VG-10 has been around for a long time, it is not a cheap steel and not easy to process. The quality of the processing of all materials requires higher skills. Training is a costly part of the equation.

We spend a great deal of time on pricing, with many details covered. We try to be fair to all. We still have to make enough money to cover our expenses and grow, but we are always conscious of the ELU and their money, and we believe that to charge as much as the market will bare is biting the hand that feeds you. The obvious answer is China, as many companies are doing, but we believe that has long term issues.

We understand your concerns and you need to know that we are always keeping you, the most important part of the business chain, in mind.

sal

Thanks Sal! I was really hoping you'd take a look a this thread. :)

All of that makes sense. Is there not a quality source of Japanese G-10, or would it cost as much as the US-made G-10+shipping/duties?

I'm not complaining about VG-10 itself, per se, but just that, fairly or not, it's now perceived in the market as an average or non-premium steel. I was just wondering if there was an option "nicer" than VG-10, but not as expensive as ZDP-189, that could be used on these more premium designs.

I have no qualms with Chinese products, nor do I buy into the patently-false stereotypes about the quality of Chinese manufacturing (I own an iPhone, and that tells me all I need to know just right there). But I am glad that Spyderco has a diverse set of OEMs in addition to the Golden facility, and that you aren't putting all of the eggs in the Chinese basket like some companies. And I would never suggest that Spyderco sacrifice running a business properly just to save me a few dollars unnecessarily. I also very much respect how Spyderco respects the history and relationships with Japanese cutlery makers, and I have no problems paying extra for quality work.

I know you guys are keeping us customers in mind by the way y'all have such incredible customer service and the way that you and your employees engage with us here on the forum. It's still mind-blowing and refreshing to know that I can go on a forum like this and talk to the founder of a company whose products I enjoy so much.

[sal]

Hey Bodog,

Some in/out duties savings is often possible, though not easily done. Shipping things from one place to another is not ever "reimbursed".

Dplafoll,

Thanx. We try to be a good "model" company.

sal

[JD Spydo]

For several years now I've had a special love for the GOLDEN, CO USA Earth made Spyderco models. But in a really close second place I absolutely love all of my Japan made Spyders. My C-60 Ayoob model for instance is one of the best overall, ergonomic designs of a folder that I've ever used.

For the most part if the model isn't GOLDEN made or Japan made I tend to shy away from it.

Now there are a few exceptions>> one being the TAIWAN made units. Some of those are really well made. But 95% of all the Spyders I own are either GOLDEN made or JAPAN made. Excellent quality on both lines IMO.

[araneae]

The Japanese models are largely outside of my price range now (FRN standards excluded). I am sure there are many others in my boat. Looking at AG Russell, who has moved many historically Japanese made models to China and maintained his quality standards makes me wonder if Japan is pricing themselves out of the market. With such high value coming from the Taiwan and US models, I can't see sense in having Japan produce so many new G-10 models. I can't be the only one who is priced out of the market for many of those knives. And I'd really, really love to own a Lil Temp, D'allara 2 and ATR, but at nearly $200 I won't. That's pretty sad as all 3 have been in the pipeline for years and I've been waiting to see them happen.

[sal]

Hi Nick,

I don't know that there is a choice in "Pricing themselves out of the market". If it costs just so much to make a product, and the XYZ margin is necessary for survival, then it is what it is. We make G-10 Seki models because;

1) They are a platform to work out glitches before tooling up and making an FRN version.
2) There are some that can afford and do enjoy them.
3) The market is too small to warrant an FRN mold.

sal

[Bodog]

The Japanese models are largely outside of my price range now (FRN standards excluded). I am sure there are many others in my boat. Looking at AG Russell, who has moved many historically Japanese made models to China and maintained his quality standards makes me wonder if Japan is pricing themselves out of the market. With such high value coming from the Taiwan and US models, I can't see sense in having Japan produce so many new G-10 models. I can't be the only one who is priced out of the market for many of those knives. And I'd really, really love to own a Lil Temp, D'allara 2 and ATR, but at nearly $200 I won't. That's pretty sad as all 3 have been in the pipeline for years and I've been waiting to see them happen.

I feel the same. I believe I'd genuinely love a stretch. I believe it'd do really well for me. But I cannot and will not accept the pricing of the knife. I'd also really love a Temperance 2 for my EDC fixed blade knife, but with the price point and steel used I just can't bring myself to buy it. I'd also love to buy several other spyderco fixed blade knives like the south fork, sprig, Bradley bowie, and the miniature version. I'd love the new M390-ish knife. I forget the actual name. But some things are priced out of the competition. Freak man, I'd love to carry a pigmy warrior on my body armor but I just can't bring myself to spending the money on it. For the time being I'm carrying a ZT 0180 that I rehandled myself that I got for $120 plus the handle material cost. That's some high quality stabilized buckeye burl. The sheath kind of sucks but whatever. It's molle compatible so it does its job.