Yesterday, Spyderco announced that it will start drawing the line on prices by enforcing Minimum Advertised Pricing (MAP) with retailers of its products. The measure would require retailers to sell Spyderco products for no less than 40% off its Manufacturer Suggested Retail Price (MSRP). The new policy takes effect starting in 2016.
The move is controversial and the reaction from Spyderco’s customers on the forums, and in social media has turned into a contentious debate between those who believe the new policy is a good thing for the knife community and others who don’t want to see any changes. But what do the people who must adhere to Spyderco’s new policy think?
We asked Jon Blumenfeld, President of HL Dalis, a company that has been distributing a wide variety of products since 1925 for his reaction to Spyderco’s announcement. Blumenfeld who works with both manufacturers and retailers, contends that the move is required because not all retailers are created equal. “MAP pricing is necessary to protect certain retailers from what I like to call ‘garage dealers’ who operate with very little overhead, add no value, and undercut the dealers who are creating all the buzz,” says Blumenfeld.
“In effect, you have dealers that do the videos, take the pictures, write the blogs, mind the databases and spend time distributing all of that information to the benefit of consumers. Good advice can save you money because you’re not ending up with a product that doesn’t meet your needs,” he points out.
Blumenfeld presents an analogy that parallels what he believes has been taking place in the knife industry: “If you call a reputable electrician and ask him to tell you what’s wrong with your house – it’s not fair to then call the world’s cheapest electrician to get the work done once you have already benefited from the expert’s advice.”
The Federal Trade Commission, in a 2007 Supreme Court case also brought attention to the problems caused by manufacturers who don’t adopt MAP pricing policies: “discounting retailers can free ride on retailers who furnish services and then capture some of the increased demand those services generate.”
In Spyderco’s case, Blumenfeld is supportive of MAP. “Moderate MAP pricing is reasonable so long as the knife is worth the MAP price. Spyderco has set its MAP pricing at a reasonable level because the core of Spyderco’s products are worth the MAP price,” Blumenfeld concludes.
KnifeCenter is one of the online dealers who has invested significant resources in keeping consumers informed via their website, blog, YouTube Channel and various other social media accounts. We asked KnifeCenter’s Founder and Owner, Howard Korn for his reaction to Spyderco’s announcement:
“This is great news for legitimate knife dealers. No longer will Amazon be able to undercut prices and drive the value down for these great products,” Korn says. “Amazon is hardly a good actor in the marketplace. They repeatedly steal images from KnifeCenter.com and other hard working dealers then undercut prices because they are not driven by immediate profits”, adds Korn.
Jeff Bezos, Amazon Founder & CEO once said that “percentage margins are not one of the things we are seeking to optimize”. Amazon is able to resell products often below cost because it can sell additional services like product and text advertising and Amazon Prime subscriptions and credit card offers to consumers drawn in by its rock bottom prices. Spyderco’s announcement will cause Amazon to have to raise its prices on certain models which can sell by as much as 53% off the MSRP.
“They just want to own the marketplace and they will not succeed as long as companies establish and police MAP policies,” Korn continues. “We salute Spyderco for finally seeing the light on this and hope they adequately police it. The industry will be watching.”
We asked other reputable dealers for their reactions to Spyderco’s announcement. GPKnives‘ Jamie Quinn believes it was a difficult decision but trusts that Spyderco has arrived at the right policy. “We recognize there are positives and negatives when a company decides to implement a MAP pricing policy. Spyderco has been a long time industry contender and contributor and we’re sure they’ve heavily weighed both sides in an attempt to do what they feel is right for their brand and supporters,” says Quinn.
Cutlery Shoppe‘s Jeff Loffer, while supportive of Spyderco, has mixed feelings about the new policy. “My basic philosophy, be it knives, or anything else is this: I believe in a free and open market, made up of willing buyers and sellers,” says Loffer. “While I’m convinced the market is always ‘right’ and I am less concerned with inefficient dealers, [Cutlery Shoppe] is compelled to comply with the MAP policies our manufacturers put into place. I feel it’s in the best interest of Cutlery Shoppe and ultimately our customers that we retain our valuable manufacturer relationships,” he says. “Regarding the upcoming Spyderco MAP policy specifically, we will be doing our part to comply. Our relationship to Spyderco is symbiotic, and as an ardent fan of the knives and the brand, I could not consider acting otherwise,” says Loffer.
KnivesShipFree Owner, Derrick Bohn highlights another issue confronting the knife industry – the large gap between MSRP and actual prices in the market. “The problem with establishing a retail price at one level and having a MAP price at 40% off is that the retail price is completely meaningless. It is a small step. The next step is enforcing their pricing. We shall see,” says Bohn.
Spyderco will have its hands full trying to enforce its new policy. For MAP to be effective manufacturers must relentlessly monitor retail prices and punish offenders who are also the intermediate customers, neither of which will be easy. And Spyderco might not be able to count on Amazon for help disciplining third party sellers. “Amazon takes a percentage of third party sales within their marketplace .. Amazon is extremely hesitant to enforce seller pricing agreements and risk losing revenue,” says one expert.
In their announcement, Spyderco calls their new policy “a work in progress”, and says they would apply their “Constant Quality Improvement philosophy” to the measures over the coming months. In addition to keeping close watch on the effects of the new policy, Spyderco also promises that they won’t be increasing their prices to retailers and distributors on nearly all of their 2016 product line-up.
Joe Bartholdi
November 10, 2015 at 9:45 pm
This just means you will be paying higher prices.
Michael Waki
November 10, 2015 at 9:58 pm
All I get from this is
“we think we can squeeze more money out of customers for our products so we are taking steps to do so with MAP”
Jake Vandenberg
November 10, 2015 at 10:10 pm
I don’t care if it’s better for the dealers. A competitive market keeps the prices low for me, the consumer.
Daniel Jackson
November 10, 2015 at 10:17 pm
Price fixing. It was only a matter of time before they followed ZT, Benchmade.
Joe Bartholdi
November 10, 2015 at 10:21 pm
Exactly. Oh no the dealers aren’t making crazy money taxing the consumer. I think it is BS.
Jake Vandenberg
November 10, 2015 at 10:26 pm
Frankly I don’t even understand why Spyderco is doing this. It doesn’t help their bottom line at all and it’s ticking off their consumers.
Joe Bartholdi
November 10, 2015 at 10:28 pm
Some of their distributors stopped carrying their knives because they couldn’t compete with Amazon
Riley Coppicus
November 10, 2015 at 10:30 pm
Spyderco is over pricing their products enough even for OVERSEAS produced and now it’s gonna be worse lol
Jake Vandenberg
November 10, 2015 at 10:42 pm
That makes sense I guess. It’s still BS. Who wants to pay 70 bucks for an FRN Delica? Their new line had better be flooring.
Mach Davis
November 10, 2015 at 10:52 pm
For those prices I will buy made in the U.S.A .. I know some of them are made in Colorado.
James Cook
November 10, 2015 at 11:03 pm
The prices don’t justify the knife or quality of knife they make anymore in my opinion. And I say that even though Spyderco was my Favorite EDC knife for almost a Decade but their quality control has dropped drastically that I’ve seen.
Darren Rich
November 10, 2015 at 11:48 pm
Free market is a great thing, but keep in mind it is spydercos product. By not doing this it could result in them making a lower quality product. In a sense it is their brand, so why shouldn’t they be able to set the standard? 40 percent below map is still a pretty good discount.
Darren Rich
November 10, 2015 at 11:48 pm
Will this apply to used knives?
Kris Heather
November 11, 2015 at 12:22 am
Laughable
James Cook
November 11, 2015 at 12:38 am
You find that laughable but it’s really hard for them to compete with BenchMade and ZT and MT in my opinion these days. I think the older seki city blades were better than the Colorado versions all though I support all stuff made in USA I still must be honest in how I feel about their quality.
Megan N Taylor Fast
November 11, 2015 at 1:25 am
Good luck over pricing your proudly stamped china made crap
Tad Chalk
November 11, 2015 at 1:45 am
MAP is good for small businesses but not good for online stores so i say it’s good
Mark Lev
November 11, 2015 at 1:51 am
I feel thst their knives are way overpriced at the MSRP. I think I would probably stick with zt or Benchmade at thst price level
Mike Bonebrake
November 11, 2015 at 1:52 am
Benchmade!!!!!
Larry Velasquez
November 11, 2015 at 2:11 am
Their sales will drop because there are better made knives out there for the money. Hell,if I wanted a Spyderco I’d just find a good trade that cost me nothing. I’ve owned many and have only two that were gifted to me. I’ll stick with ZT and Benchmade for the money.
Jeff Segura
November 11, 2015 at 2:20 am
Does this mean I need to get my stainless endura now rather than later?
Grant Evan Hathaway
November 11, 2015 at 2:51 am
This is good news. When you start to rip off legitimate manufacturers, then they lose the ability to support the manufacturing of their goods at the quality expected. If we want good products we have to pay a good price.
Zach Holstein
November 11, 2015 at 3:24 am
They just lost a customer. No longer buying anything that says, “Made in Taiwan” especially if it has a $300 price tag like all of their new models have.
Jordan Elias Smith
November 11, 2015 at 3:44 am
never was big into spyderco, this just means ill probably never buy any more.
John McKnatt
November 11, 2015 at 1:46 pm
I could just buy a clone of the pm2 for $40, what’s the difference, they are both messages in China. Besides, this might driver the price of the clones down.
Jerran Clifton
November 11, 2015 at 2:48 pm
MAP pricing is set at no lower than 40% off MSRP. That will keep it competitive. I do agree with it being unorthodox. Probably will see more “underground” shops come up in 2016
Jerran Clifton
November 11, 2015 at 2:50 pm
They’re not going to be sold at MSRP lol. Article states no lower than 40% off. That will keep it competitve. If sold for that 40% off most knives will only increase in price by20-30$. I do agree in the move being unorthodox, however.
Kevin Rowe
November 11, 2015 at 3:00 pm
A lot of Sypderco blades don’t sell for more than 40% less than manufacturers suggested retail value anyway
Stacey Everhart
November 11, 2015 at 3:07 pm
Benchmade did something like this a year or two ago. I quit them, and I’ll probably do the same with Spyderco.
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Dustin-Brandie Savage III
November 11, 2015 at 3:47 pm
So we should worry more about Spyderco or big dealers making money, than we do about getting the best deal for our selves??? How bout…….no!
Matthew Kent
November 11, 2015 at 4:05 pm
I agree 100%, I love Spyderco, but their QC isn’t there. Especially in the USA made blades. My best models I own, came out of Taiwan
Matthew Kent
November 11, 2015 at 4:05 pm
It’s not good for the customer.
Matthew Kent
November 11, 2015 at 4:08 pm
No, the PM2 is made in Colorado along with the Native, and Manix 2…….. Plus you know what steel and heat treat you’re getting from Spyderco, not the clone. However. The MAP pricing is bullshit.
Joe Baratta
November 11, 2015 at 4:54 pm
As a end consumer, this is bullshit. This is akin to car manufactures giving early information and tools to dealership mechanics who charge higher prices over a true free market. Amazon and Wal-Mart are selling them cheep, no doubt, but it needs to be addressed why the mark up is so high. Why can they sell half off and make a few pennies still. The MSRP is to high on knife and tools, from all manufactures.
Joe Baratta
November 11, 2015 at 4:56 pm
And as others have stated. If all Spyderco’s start costing $150 on up, ZT and Benchmade are where my money’s going to be spent.
Phillip Hair
November 11, 2015 at 5:05 pm
Benchmade already started the map enforcement.
Joe Baratta
November 11, 2015 at 5:13 pm
I know, but if the two companies start charging the same, I’ll buy Benchmade
Stephen Owen
November 11, 2015 at 5:37 pm
Good. SpyderCo owes its dealers for building the SpyderCo business. Worst thing they could have done was cut out their support structure because some bean counter thought Amazon would make then more money. Walk into any knife shop, they don’t carry SpyderCo anymore.
Jacob Martinez
November 11, 2015 at 6:42 pm
Where are you buying clones for 40 dollars.they sell for lower than 15 on aliexpress.anyway the pm 2 is worth the 100 dollars.
James Ilyich Rogers
November 11, 2015 at 7:36 pm
The end consumer probably isn’t going to notice a price increase, unless you already bought all of your knives through Amazon. All other retailers sell Spyderco knives for around 40% off of MSRP as it is now.
Also, people need to not confuse MAP with the MSRP. Furthermore, MAP only limits the price you are allowed to advertise. It doesn’t mean that you can’t ever sell below that price. BladeHQ or other sites get around this by having you login in to see the discount price, while advertising the enforced price.
Ronnie Raley
November 11, 2015 at 7:36 pm
That’s kind of the point. The Taichung knives are well above ZT and BM. The QC is unbelievably good.
Jeffrey DeBord
November 11, 2015 at 8:12 pm
Spyderco is a great brand and if they want to add map pricing to their retailers contracts more power to them. Their sales numbers will probably drop, but if it’s worth the decrease in revenue to protect their mid level retailers so be it. I will still buy Spyderco, but only if it’s a better deal than the other knives I’m considering.
Jeffrey DeBord
November 11, 2015 at 8:17 pm
Sportsman’s Warehouse in Washington carries a large number of Spyderco knives.
Stephen Owen
November 11, 2015 at 9:04 pm
Interesting. I doubt that will keep. Doesn’t make financial sense for business to stock spyderco anymore.
Jack Smith
November 11, 2015 at 10:13 pm
I was just talking to a good local dealer at a knife/gun show last weekend. He was complaining that he can’t get spydercos as cheap as amazon sells them.
I think all of us will see a slight hike in prices across the board.
David Nalls
November 11, 2015 at 10:25 pm
Spyderco prices have been steadily climbing. They need to consider that as well.
Todd Robbins
November 11, 2015 at 11:30 pm
Nobody is ripping them off, though. Spyderco sets the price that they sell their products to dealers for. What happens after that should be none of their business, but they are now telling a dealer who has already paid for his Spyderco products what he can do with them. That isn’t something I can support.
Todd Robbins
November 11, 2015 at 11:31 pm
A 20$ increase would keep me from buying their products.
Todd Robbins
November 11, 2015 at 11:34 pm
Spydercos aren’t stocked as widely as they used to be because they are overpriced as it is.
Stephen Owen
November 11, 2015 at 11:53 pm
Over priced compared to what though? I agree with you that their Chinese imports are over priced, but the Japanese and American stuff is A+. The SpyderCo VG10 Endura is definately worth $80-$100 (MSRP) compared to what else is on the market for that price range.
I own a knife shop, few friends of mine own shops themselves and we’re done with SpyderCo for jerking us around. Pretty disheartening after all the years of good business. Wish I could tell Sal how disappointed we have been these last few years.
Eric Bergendahl
November 12, 2015 at 12:19 am
As a used to be spyderco fan boy I have to say one thing. There prices have gotten a bit high anyway. That’s why I’ve moved on. Yes I love there knives but they have gotten out of control. Just my 2 cents. I buy all my knives second hand for the most part now anyway.
Jordan Richard Wagner
November 12, 2015 at 12:45 am
Zt did too.
MAP pricing isn’t a bad thing.
Dylan Dobson
November 12, 2015 at 1:02 am
20 or 30 dollars can be 15 or 20 percent of the knives total value lol
Curt Gautier
November 12, 2015 at 3:44 am
I guess my Ronin 2 will be my last!
Richard Kane
November 12, 2015 at 5:25 am
Spyderco isn’t stocked in brick and mortar stores because Spyderco is ok with Amazon and other online retailers selling below the B&M’s cost – like you said, it makes little financial sense to sell them. A 40% MAP is a joke and won’t change anything for actual knife stores. Their pricing on the US prices is just about perfect, but the MSRP on everything else is crazy high.
I own a knife shop as well and this changes nothing in regards to the Spyderco I do or don’t carry.
Richard Lilley
November 12, 2015 at 4:06 am
Thank you,good article.
Dustin-Brandie Savage III
November 12, 2015 at 11:56 am
Smokey Mountain Knife Works stocks plenty of Spyderco, way over priced as is most every knife in the place…
Steven Karroll
November 12, 2015 at 12:43 pm
Most of you folks are missing BOTH how this will effect prices AND why it’s being done.
First off for those concerd with the prices…..they are setting MAP pretty low. This is allowable price and from what I just read it will be 40% off their retail price, that’s quite a bit off and means a $200 knife can still be sold as low as $120.
Second, to give a relevant example to why this is being done….I worked in a retail cutlery store for many years, and being a simple brick and mortar store we had a lot of overhead so couldn’t afford to deeply discount prices. We had great employees that knew and cared about product we sold and contantly had people coming in, taking up hige amounts of our time and taking time from other customers to learn about knives and decide what knife they wanted and would best suit their needs to have them leave and go buy it somewhere else because it was cheaper. The worst was when after spending that time and giving that knowledge, the customer would purchase a knife then return it because they found it cheaper.
This policy is to protect dealers that have worked hard to help Spyderco build their company. There are a lot of dealers with these low low prices that are selling just above wholesale because they have no overhead, and with that they won’t take the time and be as helpful as the dealers that have to charge more.
There used to be cutlery stores all over the U.S., places you could walk into, check out knives in hand and be informed about them and now there are barely a handful because of the kind of attitudes expressed in the comments on this.
Rob Schnickel
November 12, 2015 at 10:30 am
I’m waiting on the Ronin 2 as well and I can’t afford their Knives any longer and trust me I have plenty …. Just way too much money and some aren’t even made in the US anymore . The Yojimbo 2 was the last knives I got and I was shocked that it was made in the US lol , pretty bad nowadays when you think like that …
Maurice Kojayski
November 12, 2015 at 4:18 pm
Rock on cold steel
Jason Long
November 12, 2015 at 4:29 pm
Everyone is different and im not bashing. I just have never liked the hole to flip it open. If seconds matter and all i got is a folder i want to know in wet or any conditions i can quickly deploy my blade. Im a Benchmde guy. But on a budget i say Kershaw USA. I recently bought their Knockout and couldn’t be more satisfied
Jason Long
November 12, 2015 at 4:44 pm
I’ve never bought anything online. I go to American owned and operated independent b-m stores. Sure i may pay more but its a price im happy to pay to receive the knowledge, service and ability to actually open and close a knife in my hand they provide. Plus while i shop they have experts that ask if I’d like them to sharpen my currently carry blade free of charge. That my friend is why online pricing and such does not effect me
Lox Thomson
November 12, 2015 at 5:07 pm
You are a principled dinosaur. Not enough like you… Going extinct
Lox Thomson
November 12, 2015 at 5:07 pm
Prices for customers are going up. I am mighty disappointed
Zach Williamson
November 13, 2015 at 3:24 am
This is the basis for Socialism…and I bet Spyderco bows out when sales plummet…No one can afford $200 for a knife…and if Spyderco gets what they want, that will be the average cost. You can’t control pricing in a Capitalistic market. This is not Soviet Russia…You can take whatever hit you want on your own stock…
Jarret Corns
December 3, 2015 at 9:53 am
Guess I won’t be buying spyderco for a while. Sorry Sal, but the reason knives like the techno got so popular was PRECISELY BECAUSE they got cheap on amazon. When the techno first came out, my local shop couldn’t get rid of them because they had to price so high. Now they can’t keep them in Stock because they cost so much less than they did.