How is the recession treating Spyderco?

[fishtale]

The downturn in the economy is effecting everything. It looks like many folks are taking a "wait it out" approach. I have not purchased a single knife this year.

Regarding sales strategy, I was very surprised to see this year's price increases. Considering the flat inflation rate and the fact that raw material pricing has come down considerably, it may make sense to reduce MSRPs to drive sales.

Look at the recent success of WM and McDs. They are thriving because they are both using low pricing to increase sales. I'm not a marketing executive but I am a consumer who can see a big shift in buying patterns.

I was in a major sporting goods chain the other day and couldn't help but think, "wow, they just don't get it!" There were very few customers and very few deals. If they don't wake up and smell the coffee soon, they will be out of business.

Best of luck to Sal and the team.

[mark greenman]

Well, between the Tenacious and the H1 lineup, I'm sure Spyderco is doing better than most. I think those two lines provide a very solid bedrock.

Also, in a recession, consumers tend to buy more durable, long lasting items. I was in NYC this Christmas, and while overall sales at Bloomingdales were way down, their kitchen knives were selling briskly.

To do my part, I'm quitting buying oldschool spyders and only snagging the new production models. That, and showing of my knives to everyone I know :D

-mark

[Shenmue728]

I agree with most on this subject. Quality is recession-proof and spyderco oozes it. I think the only obvious hint we would get about Spyderco feeling a pinch is that the newer seki-made models (Native IV, Urban) have the sticker shock they do. Sal has mentioned that is because the yen is stronger than the dollar right now.

Another thing i have noticed is its a buyers market now for discontinued knives. Many people are thining there collections either for economic reasons or to make room for newer, more expensive models.

[Bolster]

Several enlightened responses (and a bunch of off-key ones) to my question.

I wonder if Spyderco would consider the use of more inexpensive handle materials in response to lower spending power of the average consumer. Two years ago I would have bought a CF handle without thinking. Now I'm looking for the G10 or FRN version of same.

I can hardly imagine that normal buyers (not the people on this forum, obviously) are spending big on fancy handle materials right now.

Or maybe they are! Maybe when you cancel your Mercedes order, you comfort yourself with a CF Spydie instead!

[The Deacon]

I wonder if Spyderco would consider the use of more inexpensive handle materials in response to lower spending power of the average consumer. Two years ago I would have bought a CF handle without thinking. Now I'm looking for the G10 or FRN version of same.

Well, there was a major thread over on another forum with Sal looking for reactions to the idea of a lower priced version of one of the SlipIts. So am sure Sal thinks there's going to be more of a market for "reduced cost" models.

I'd tend to think the two FRN versions of the Stretch II, Sal's almost incredible openness of late to the idea of less expensive blade steels, discussion of the possible use of FRN finished in a similar manner to Spyderco's G-10, and some of the ideas being tossed about regarding the FRN version of the Native IV all have some connection with the new economic reality.

[Sequimite]

Wow, the dollar lost 23% of it's value against the yen in 2008. Look at this chart for the last three months of the year:



The only "good" news is that Japan is going to fare worse in the global recession than the US, so the dollar should climb back up in value during 2009.

[sal]

Actually, I'm taken that you would care. I would guess that few in today's world think about the health of the companies they buy products from.

These are tough times and we are also feeling the situation.

Fortunately, we are small by design so changes and adaptations can be managed more easily than with larger companies.

Unfortunately, we are small and we don't have large contracts with the government like our larger competitors.

We are about as lean as we can be. We try to keep a staff of about 40 people. Each one important. Our staff is committed, most have been with us many years.

Our makers are cooperative, the advantage of 25 year relationships.

Our bank is being cooperative.

We have a wide variety of models from small to large, "bad" to mundane, inexpensive to high-line.

We have a wide customer base worldwide, although I must admit this economic situation is global.

We recognize that we work for our customers.

We are planning to increase the number of lower cost models; UK, Urban, Manix, Native, Stretch, etc.

We are not planning on reducing build quality, just lower cost materials.

Prices are modified to adjust to our costs. As shown, the value of the Yen has increased greatly which means our Seki made knives cost more. This increases the challenges, but many of our customers can see the difference in the design, build quality and materials selected.

We have a few low costs Spyderco's on-line or in the works. (Tenacious, Bugs, Persistence). We have our byrd line which is continuing to improve in design and construction.

Naturally, we appreciate all of the business that we can get.

sal

[kbuzbee]

Sal, what a great response! Of course we care. Both about the company and all the great people who work there.

I can't think of another company whose health (and survival) I care about as much as Spyderco.

These are tough times and I think, a couple years from now, we'll all be remembering some companies whose products we used to enjoy that didn't survive. I don't want Spyderco to be one of these and I will continue to support you as I'm able. It's at least partially selfish. I love your knives!

Keep up the good work! We're with you!

Ken

[tkdman41]

In tough times it isk more important to support the companies you love with your dollars. I find myself making fewer purchases but making those purchases more meaningful.

[tonydahose]

i just looked at my spread sheet...14 knives bought so far this year. i am doing my part :) .

[Henry1960]

I have cut back myself. Just three so far this year :eek: but like everybody else we are feeling the hit on the economy. The strong will servive and Spyderco is definitly in that category....

[Sequimite]

After reading Sal's post, I have to tell one anecdote about government sales. Our company was roughly the same size as Spyderco. We designed a piece of helicopter ground support equipment. Since it was an original product we had to go through "first article" testing and approval. As part of this process we paid a consulting company $140,000 to help us with the paperwork.

Being in business for decades it always amazed me how willing many companies were to blow up old relationships and trash their goodwill in order to make an extra dollar in the short term.

I became a fan of Spyderco products because of their cutting edge innovations.

I became a fan of Sal and Spyderco because of their old-fashioned approach to business.

[Netsquash]

I think it's great that the owner of my favorite company actually takes the time to talk to his customers on a personal level. It's this style company that will make it through the economic downturn because they are true to their customers and their responsibility to the customer.

There is nothing I respect more then a company that knows what it is doing.

Thanks Sal

[Fred Sanford]

I say that for those that can afford it, we should buy an extra knife this month or next that we wouldn't usually buy.

I was not going to buy anything in 2009 as far as knives go. If I did it was going to be 2 or 3 instead of about 10.

I will buy a Spyderco in the next week that costs between $60 and $100 to help out. Maybe we can all do that (those who can) and try to help out. I mean, I realize it's not going to fix everything, but if we all come together and spend a little more than we normally would this month....or next month it will help a little. :) A little is better than none.

[Sequimite]

I too am ready to be altruistic and selflessly buy myself another knife.

The first nine I bought this year were for my own selfish pleasure, but I am now ready to sacrifice.

[SecSpyral]

I say that for those that can afford it, we should buy an extra knife this month or next that we wouldn't usually buy.

I was not going to buy anything in 2009 as far as knives go. If I did it was going to be 2 or 3 instead of about 10.

I will buy a Spyderco in the next week that costs between $60 and $100 to help out. Maybe we can all do that (those who can) and try to help out. I mean, I realize it's not going to fix everything, but if we all come together and spend a little more than we normally would this month....or next month it will help a little. :) A little is better than none.

Oooooo, I like this philosophy :) I've got 6 so far this year.

[camvdcs]

I love my Spydies. As far as brands for me to buy, it's about 15 to 1 (Spydercos to all others). I've been buying my spydies regularly but I'm afraid I'm starting to feel the pinch of the economy. I'm in agreement with the previous post about limiting my purchases to the current day models instead of trying to get the older retired models (see the price of the Yojimbos?). FRN Native & Stretch sounds good to me. Hopefully their price will be good to. But there's that new Sage with the RIL!!!

[Spygineer]

Yes, my spending habits have definitely changed. I try not to spend on wasteful things. As such:
- I no longer buy coffee at starbuck. I brew it myself.
- I've reduced the number of times I go out to restaurants
- No longer shop for clothes, instead wear old outdated stuff.
- I no longer buy knives...from other companies, that is!!! :D
- list goes on...

With a portion of the money that I do save...I buy spydies!!! :D Ya, I aint that crazy to quit cold turkey!!! Though admittedly, not as much as I used to. I figure, why support businesses who could care less about its customers, when I can support a company that I know for a fact listens to their customers. Spyderco is a good ol' fashion American business with integrity! It would be a **** shame if we didn't support it!

[FastEddie]

In tough times it isk more important to support the companies you love with your dollars. I find myself making fewer purchases but making those purchases more meaningful.

Very well said and I feel the same way. So far this year, I have purchased 4 Spydercos that ranged from $90-$130 apiece(and 1 white Dragonfly). What about a UKPK/Urban/Calypso jr. style knife made in China, like the Tenacious, but cheaper than the current UKPK's? I think the idea of changing the scale design on the FRN knives is good too.

fe