MAP policy change? 35%

[gaj999]

The transparency and openness about this is truly appreciated. I especially appreciate the mention of the interactions with Amazon...

+1 to all of it. I shortened the quote for readability. I also want to comment that a brand not being available on Amazon isn't a big deal to me. I just ordered a carbon-steel slippy from a US maker. The brand isn't available on Amazon and I was actually kinda relieved not to have a moral dilemma to deal with. :)

[Johnnie1801]

I just hope these pricing changes are only for the US market. Prices over here in Europe are getting insane. I paid 70 euro for my Delica in 2013 and now the same knife retails for +/-120 euro. I recently saw the "Value Line", Tenacious for 85 euro (used to be about 45 euro a couple of years ago) that's about $100US, I don't see much value in that.

[awa54]

vegetable, you just read it direct, yes. I felt a near wave of electrical tingle ripple through my entire earthly form when I read that statement, A FRN POLICE 4? WOW!

There we have it, SEF has finally slipped and as good as admitted to being a space alien!

An FRN police sounds pretty cool to me too, it might finally win me over to buying a large Japanese made Spyderco where the Endura never did.

[palonej]

Great point Dave.
I saw the same exact thing happen between American Standard & Home Depot....and it was absolutely nauseating.
I worked corporate for Amer Stand from 1998 - 2005 and watched our quality go in the dumpster.
We had around 25 plants in the US employing about 4,000 people in each one. Quality was excellent.
In 5 years there were no plants here. 5 opened up in Mexico, couple in the Czech Repub, Thailand and a bunch in China.......all because Home Depot decided what they would pay. By that time they purchased so much it was impossible to say no.
Moral of the story??? Do not purchase Amer Stand products. They are horrendous......but they meet a price point!!! Ugh, nauseating.
Joe


I should really just walk away from this thread but I can't help myself.

Years ago I worked for a specialty monomer manufacturer. The monomers we manufactured produced special properties (increased strength, UV resistance, etc) in spray paints. A well known spray paint manufacturer was using our monomers in their spray paints and they truly were the best spray paints available in the market place.

The spray paint got to be widely known and recognized and Wal-Mart offered them a huge contract to sell spray paints in their stores. The paint manufacturer expanded production and sold high volumes at low margins at Wal-Mart, we sold more monomer to the paint manufacturer. Then Wal-Mart came back and demanded the paint manufacturer cut their prices by 15% or lose their shelf space. The paint manufacturer would have been selling a loss at those prices.

They came back to their suppliers looking for discounts. We gave them some - we were selling a higher volume and didn't want to lose their business. Their other suppliers did the same. They were able to reduce their prices but not the 15% Wal-Mart wanted. Wal-Mart accepted the new lower price for the still high quality paint - for 2 years. Then Wal- Mart came in and demanded another 15% price cut.

We coulf not cut the prices for our specialty monomers any lower, nor could the paint manufacturer's other suppliers. The Wal-Mart business had become such a large part of the paint manufacturer's business they were forced to change their product formulation - if they didn't provide Wal-mart the price cuts they would lose all of their business their. They bought commodity styrene (instead of our monomers), cheaper pigments, spray nozzles, etc. Their new product still had their label on it, but their paint was now the same discount garbage that other manufacturers were selling - and Wal-Mart proudly advertised high quality XXXXXX spray paint "for the same price as most places charge for the discount brands".

The paint manufacturer tried to fight back, they produced a new "premium" grade paint that was essentially their old formulation and they sold it mainly in hardware stores and specialty hobby shops, but it was too late the damage to their reputation was done. Years later I was in a hardware store, looking to buy some spray paint for some patio furniture. I was looking for XXXXXX brand at it wasn't on the shelf. I asked one of the clerk's if they had any and his response was "We don't sell that here anymore" when I asked why he said they had received to many customer complaints about poor quality. The complete destruction of the brand only took about 6 years once they entered their agreement with Wal-Mart.



That same destruction of the brand is what Spyderco is attemping to fight off. They are not entering into deals with the discount sellers. The introduction of MAP pricing was the 1st step, changing MAP from 40% to 35% is the second step. I expect there ill eventually need to be a third step to fully right the ship. If Spyderco loses this battle, then within 5-6years (probably less) you can expect to lose everything you love about Spyderco's - good bye to quality, innovation, steel selection, model diversity, sprint runs, etc. Then people will say "Spyderco's suck now, Sal and Eric sold out!"

Sorry you don't like the price increases - what you're really seeing is Spyderco attempting to "right the ship" for their dealer networks that have stood by them as Spyderco's popularity took off and the big discount chains have made their attempts at corrupting the brand.

David[/quote]

[MacLaren]

You see it happen all the time. Quality taking huge hits, not only to meet certain price points, but also for just pure greed.
Case in point- Sig Sauer and Kimber. And, I could go on and on.
I trust Spyderco.

[palonej]

I remember one of my first top end Spydercos in September 2005 was the Military Model C36GPSE with G-10 Handle and ComboEdge S30V steel for $103.09 shipped. Now, the PlainEdge C36GPE with G-10/S30V is $160.77 and soon to be $174.18!

Yes, and you could get a pound of potatoes for 2 cents in 1913. Not sure what difference it makes, unless you have a time traveling machine (meaning you somehow figured out a flaw in General Relativity, proving you're smarter than Einstein).

What you're not getting is that the Military, for the end consumer, has gone up 69% in 12 years. That's not in line with inflation which says it should be closer to $129. I'm not saying the Military should have a $129 street price but $174 seems quite excessive.

So there were absolutely no CQI / manufacturing changes in that period, as far as you know? Only inflation at play, right?

Excellent point, that I have been thinking of since the increase for the Millie was posted!
Along with CQI comes New tooling and training along with R&D. If the Millie had NO changes since its inception, it is doubtful the price would have climbed the way it did.
Joe

[jmh58]

There is one thing we got to remember.. This is a hobby.. Nothing more or less.. Justa hobby.. Not a necessity.. In reality we can get by with 1 knife.. We really don't need a pile!! (Did I really say that?? :o ) As I read thru these posts there were some that I wanted to cheer about and some not so much.. We pick and choose how much we are willing to pay for a knife.. No one is forcing these down our throats.. Just a hobby.. :D As time goes on and income dwindles the choice become more important.. Do Ya? or.. Don't ya?? John :D

[wsdavies]

Little Johnny doesn't need piano lessons...daddy needs a new knife!! LOL

There is one thing we got to remember.. This is a hobby.. Nothing more or less.. Justa hobby.. Not a necessity.. In reality we can get by with 1 knife.. We really don't need a pile!! (Did I really say that?? :o ) As I read thru these posts there were some that I wanted to cheer about and some not so much.. We pick and choose how much we are willing to pay for a knife.. No one is forcing these down our throats.. Just a hobby.. :D As time goes on and income dwindles the choice become more important.. Do Ya? or.. Don't ya?? John :D

[palonej]

Not counting a few years out of the field, I have been in the HVAC industry for over 40 years, my family since 1925, or so.
Things have changed so drastically, it’s almost impossible to keep up.
Where loyalty and great service used to be enough to keep accounts, they don’t even enter the equation any longer. I won’t make a blanket statement, but I probably could......the only thing that matters to most today is the bottom line......period.

I explain it with the example of doing an expansion valve change out. The entire job will cost around $600.
Very rarely had an issue with this particular job.......until the advent of the inter webs!! The cost of the valve is around $75, and now the customer knows this with a couple of clicks. Most will go postal!
What is never figured in, from the customer’s view point, is the cost of doing that job. Approximately $5,000 in tools and around 3 - 6 hours of labor.....on top of the usual costs to run a business. The customer refuses to see this and wants to pay a 20% mark up on the part only. It gets really old very quickly.
I see it in the knife industry constantly, where people without any business background at all spouting what it costs to manufacture a knife and what companies SHOULD be charging.
Joe

Sorry for whining and ranting, but this is a very sore subject with me. To make up for it, I’ll post a pic of a hard working Spydie doing some HVAC work!! :D

[FCM415]

From my understanding of the replies so far.My guess of how this move will affect this symbiotic relationship...

DEALERS gain the most
CUSTOMERS get squeezed more, can choose not to buy.
SPYDERCO risks losing sales from all but the most serious collectors.

Knives at this level are already a very niche market. Time will tell.

[wsdavies]

5% - I am counting the big $ right now. Think I'll run down and pre-order a bright orange Lambo! Here's what I think will happen: You are going to have more dealers representing the brand, the kind of dealers who treat people right and the perceived value of the brand will go up, not down. You'll over time see more product availability in B&M stores nearby that you will be able to handle in person.

In the current globalized marketplace manufacturers have 2 options: 1) A race to the bottom where you constantly are cutting costs by outsourcing, working people harder, using cheaper materials..etc. 2) You focus on quality, customer service and innovation. You create value for the end user through innovative design, quality materials and automation where you can find it. You also create value by selling through a network of people who share your vision and are eager to promote your product. If you value human relationships and running a business you can be proud of you choose option 2.

From my understanding of the replies so far.My guess of how this move will affect this symbiotic relationship...

DEALERS gain the most
CUSTOMERS get squeezed more, can choose not to buy.
SPYDERCO risks losing sales from all but the most serious collectors.

Knives at this level are already a very niche market. Time will tell.

[FCM415]

5% - I am counting the big $ right now. Think I'll run down and pre-order a bright orange Lambo! Here's what I think will happen: You are going to have more dealers representing the brand, the kind of dealers who treat people right and the perceived value of the brand will go up, not down. You'll over time see more product availability in B&M stores nearby that you will be able to handle in person.

In the current globalized marketplace manufacturers have 2 options: 1) A race to the bottom where you constantly are cutting costs by outsourcing, working people harder, using cheaper materials..etc. 2) You focus on quality, customer service and innovation. You create value for the end user through innovative design, quality materials and automation where you can find it. You also create value by selling through a network of people who share your vision and are eager to promote your product. If you value human relationships and running a business you can be proud of you choose option 2.

From my understanding of the replies so far.My guess of how this move will affect this symbiotic relationship...

DEALERS gain the most
CUSTOMERS get squeezed more, can choose not to buy.
SPYDERCO risks losing sales from all but the most serious collectors.

Knives at this level are already a very niche market. Time will tell.

Spyderco and customers were happy with the quality and evrrything you mentioned before MAP. They put out tge same PM2 S30v as they do now.

I was never treated wrong by any dealer I dealt with.

[MacLaren]

[MacLaren]

Lol....sorry guys! Wrong thread...

[wsdavies]

Did you read any of the other posts in the thread about how Walmart/Amazon gain leverage by controlling a higher percentage of a manufacturer's sales and use that to force lower and lower pricing from the manufacturer and then the manufacturer is forced to compromise quality and outsource offshore and the more that cycle occurs the less and less value the brand is perceived to be...which in turns makes customers willing to spend less and less...which then cycles back to Amazon/Walmart forcing the manufacturer to cut prices more...It's a downward death spiral that leads no where quick. The antidote to this is a broad and robust dealer network which gives leverage back to the manufacturer to maintain quality and innovation. The thing is, dealers like ourselves need to make a minimum amount of $$ to exist and sell any particular brand. It's not a lot, let me tell you. So, if you want Spyderco to keep doing what makes them interesting and all of us love them, then buy through any of the knife dealer network...you know knife sellers. When you do, believe it or not it helps Spyderco in the long run. My 2 cents.

5% - I am counting the big $ right now. Think I'll run down and pre-order a bright orange Lambo! Here's what I think will happen: You are going to have more dealers representing the brand, the kind of dealers who treat people right and the perceived value of the brand will go up, not down. You'll over time see more product availability in B&M stores nearby that you will be able to handle in person.

In the current globalized marketplace manufacturers have 2 options: 1) A race to the bottom where you constantly are cutting costs by outsourcing, working people harder, using cheaper materials..etc. 2) You focus on quality, customer service and innovation. You create value for the end user through innovative design, quality materials and automation where you can find it. You also create value by selling through a network of people who share your vision and are eager to promote your product. If you value human relationships and running a business you can be proud of you choose option 2.

From my understanding of the replies so far.My guess of how this move will affect this symbiotic relationship...

DEALERS gain the most
CUSTOMERS get squeezed more, can choose not to buy.
SPYDERCO risks losing sales from all but the most serious collectors.

Knives at this level are already a very niche market. Time will tell.

Spyderco and customers were happy with the quality and evrrything you mentioned before MAP. They put out tge same PM2 S30v as they do now.

I was never treated wrong by any dealer I dealt with.

[palonej]

It all sounds good ^^^ BUT many people will still buy from Amazon or eBay. They’ll wind up here posting a thread hoping their NIB $90 ‘Para 2’ is real........it’s not.
Joe

[Chopping Broccoli]

Sal (or anyone else who cares to chime in),

Question for you. I'm just curious what you predict would be the downside if Spyderco set a fixed dealer cost on each knife. That assumes your previously stated loyalties to your staff, suppliers, manufacturer's, etc would all be honored. Those costs are what they are and I'm sure Spyderco has a bottom line that each knife needs to sell for to cover those costs and profit. All dealers, big and small, get the same knives at whatever this cost is that you set. Then the marketplace can decide which dealers are successful based on advertising, sales, customer service, etc. If Amazon or Walmart does not see enough profit margin in your fixed dealer costs, then they obviously would not elect to not participate. I'm sure WSdavies would also likely elect to not participate because $5 a knife is not enough of a profit. It just seems like that would level the playing field. Any dealer could buy your product. The consumer has the ability to get a good deal on a knife. I feel like Spyderco would likely have more sales volume and be in the pockets of more people if that were the case.

I understand this proposition sounds like it ignores Spyderco's loyalty to the dealers and I suppose it does somewhat. Spyderco makes a great product. I am sure many dealers can find a way to make it profitable selling a great brand without MAP and this would greatly benefit the consumer which I assume is a mission critical thing for a business to do.

[ChrisinHove]

Hi Ramzar,

Loyalty is a very important core value in Spyderco's business model, for crew, vendors, customers, etc. We have, for various reasons made adjustments, but not likely if they are doing a good job and the price problems are no fault of their own. (dollar value, government, etc.). We are still working with our very excellent Japanese partners when ALL others have moved to less expensive countries. Partly for quality, partly for giri, partly for the Karma bank, partly because they saved our *** when we came close to going down, etc. But you won't see too many G-10 models coming from Seki in the future, at least in pocket knives. Most will go to FRN, for which they excel, like the new Police 4.

sal

I had to google "giri". I really, really like the Japanese G10 Spydies, and this gives them soul. My current favourite is the Lil'Temp3.

[PaleMoon]

Oh, I don't run my own business. I work for a major corporation. I can't even imagine trying to run a smallish business on the global market these days.

Sorry if I gave the impression I owned a business. I agree 10000% with you though.

My bad, I read this wrong :o But your point still stands, and I pretty much agree with everything you said in this thread so far.

Did you read any of the other posts in the thread about how Walmart/Amazon gain leverage by controlling a higher percentage of a manufacturer's sales and use that to force lower and lower pricing from the manufacturer and then the manufacturer is forced to compromise quality and outsource offshore and the more that cycle occurs the less and less value the brand is perceived to be...which in turns makes customers willing to spend less and less...which then cycles back to Amazon/Walmart forcing the manufacturer to cut prices more...It's a downward death spiral that leads no where quick. The antidote to this is a broad and robust dealer network which gives leverage back to the manufacturer to maintain quality and innovation. The thing is, dealers like ourselves need to make a minimum amount of $$ to exist and sell any particular brand. It's not a lot, let me tell you. So, if you want Spyderco to keep doing what makes them interesting and all of us love them, then buy through any of the knife dealer network...you know knife sellers. When you do, believe it or not it helps Spyderco in the long run. My 2 cents.

Not to come off as too much of a defeatist, but I wouldn't hold my breath. I'm always surprised to see how many users here have next to no qualms buying from Amazon in the Crazy Deals thread, and that's looking at the tiny, most loyal fraction of Spyderco's customer base. You can imagine how that goes looking at the bigger picture.

When money is involved, and I'm paraphrasing Sagan here, reptilian instincts tend to prevail. It takes a great deal of dedication & foresight to accept paying more, knowing that you may not be doing the best thing for your personal bottom line right now, but that you are doing the right thing for the long term, collective good.

[FCM415]

Did you read any of the other posts in the thread about how Walmart/Amazon gain leverage by controlling a higher percentage of a manufacturer's sales and use that to force lower and lower pricing from the manufacturer and then the manufacturer is forced to compromise quality and outsource offshore and the more that cycle occurs the less and less value the brand is perceived to be...which in turns makes customers willing to spend less and less...which then cycles back to Amazon/Walmart forcing the manufacturer to cut prices more...It's a downward death spiral that leads no where quick. The antidote to this is a broad and robust dealer network which gives leverage back to the manufacturer to maintain quality and innovation. The thing is, dealers like ourselves need to make a minimum amount of $$ to exist and sell any particular brand. It's not a lot, let me tell you. So, if you want Spyderco to keep doing what makes them interesting and all of us love them, then buy through any of the knife dealer network...you know knife sellers. When you do, believe it or not it helps Spyderco in the long run. My 2 cents.

5% - I am counting the big $ right now. Think I'll run down and pre-order a bright orange Lambo! Here's what I think will happen: You are going to have more dealers representing the brand, the kind of dealers who treat people right and the perceived value of the brand will go up, not down. You'll over time see more product availability in B&M stores nearby that you will be able to handle in person.

In the current globalized marketplace manufacturers have 2 options: 1) A race to the bottom where you constantly are cutting costs by outsourcing, working people harder, using cheaper materials..etc. 2) You focus on quality, customer service and innovation. You create value for the end user through innovative design, quality materials and automation where you can find it. You also create value by selling through a network of people who share your vision and are eager to promote your product. If you value human relationships and running a business you can be proud of you choose option 2.

From my understanding of the replies so far.My guess of how this move will affect this symbiotic relationship...

DEALERS gain the most
CUSTOMERS get squeezed more, can choose not to buy.
SPYDERCO risks losing sales from all but the most serious collectors.

Knives at this level are already a very niche market. Time will tell.

Spyderco and customers were happy with the quality and evrrything you mentioned before MAP. They put out tge same PM2 S30v as they do now.

I was never treated wrong by any dealer I dealt with.

Before Amazon (Walmart never really carried Spydies), was there already a broad and robust dealer network before MAP enforcement?. Has quality remained consistent throughout the years..preMAP and now? Spyderco quality has remained the same.

Hobby level knives are a very niche market already as it is. The arguments and points that you make, I have no qualms about and can agree for the most part. But you leave out certain realities of the situation. Dealers have to make a living and can't survive in this age's capitalization. Ok, how many customers are willing to pay $200 a pop and how many per year? Will there be enough customers to go around for these poor dealers?