Sword sellers going out?

Who says the economy is getting better? :cry:

Its somewhat abstract... the concept of 'The Economy'... my bet is... it has been a tough couple years between the downturns in the economy and people having less money to spend on luxury items... to the improvements in many sword offerings making competition stiffer... to the 'price wars' between vendors making profit margins smaller and smaller... many sellers/vendors likely held on as long as they can... till they just could not do it anymore.

As for Wiwingti... don't kid yourself... he closed up shop for financial reasons. The last gasp may have been a bit public and expressing his frustration... but the constant exchanges and returns and bending over backward for customers, paying two way shipping fee's and selling with such small profit margins... spending hours every day answering a milions questions via e-mail and telephone... he was putting in WAY too much work for WAY too little return... its that simple. I'm shocked he stuck it out as long as he did.

These have been tough times... and they will likely continue to be tough times for awhile.

Well, I think the global economy system is on crisis and this crisis is transfered to the market. Japan earthquake or the libyan operation can't influence the global economy in a serious scale on their own. Some people are using these as pretexts in order to increase their profits. The whole economical system allows extreme fiscal games on the expense of the public and state economy. These are largely known so I won't write much. It is very unnatural in my opinion for every nation in the world to have a high debt. Even the United States are largely indebted. See this for a refference buttonwood.economist.com/content/gdc

As for sword market; The economy crisis reflects here (multiplied I might add). Swords as a luxury and expensive comodity are on crisis for the last 2 years. A look at the marketplace here is the best proof. Prices are extremely low on some great items and they are unsold or -at best- sold after a lot of time.

Sword sellers are going out of business at a fairly rapid rate - we all know about it now. The question is why... and here's my opinion.

1. The global economy itself is in jeopardy. Far too many western countries are overspending their means - their national government's income is far less than their national government's expenditures. This means that they are entering greater and greater debt that is unsustainable. The results of this can be seen in Greece, Spain, Portugal and other EU countries. Even the royal family of Great Britain has had to cut back on their lavishness due to the economy. That's got to be a sign of bad times. Look at the USA - at the current rate of our country's expenditures we stand to owe more money than our GDP in a matter of years. When that happens what happened in Greece will happen here. Who then will bail us out? We're not the only ones in that boat of course. How does this translate to sword sellers? Well as the economy becomes worse and worse the average people will have less and less money to purchase swords. Now I'm not talking about very expensive art nihonto or very expensive antiques - that market will still have its buyers who are capable and willing to spend tens of thousands and more money to get their desires. I'm talking about those of us who are looking at swords from less than $100 up to a few thousand dollars. As our finances dwindle we stop buying luxury items. As we stop buying them so it makes it more difficult for retailers to do business. Eventually the retailers close. Now had sword prices remained where they were a mere 4 yrs ago this sort of issue might have been survivable for some of those retailers who have closed.

2. Price wars - as a result of lowered demand for these products but yet greater demand for higher quality it is becoming increasingly difficult to make money in the sword business. I have to say that Wiwingti going out of the sword business might be a product of his own making. I know people who are close to him have said it was a personal decision but I believe Sean is correct in his assessment. Not only that but prior to Wiwingti coming into the retail scene and slashing prices to a point where profit margins were nearly non-existent (which of course prompted other sword sellers to do the same to continue to keep their share of the business) it becomes VERY difficult to maintain your business. I can look at this from an insider's point of view where I've seen profit margins around 30 to 35 percent on swords drop to near non-existent after Wiwingti came into the picture selling swords at as little as a couple dollars above wholesale. Add that to many places offering a price match or sometimes (no longer) a price beat guarantee this resulted in swords retailing at below wholesale costs. What does this mean to the consumer? Swords at prices never seen before! What does this mean to the retailer? Little or no profit for every sale they make and sometimes negative profit just to keep their market share. Those retailers that had been very successful in the past and have built up a decent amount of company money to rely on in lean times have and hopefully will survive the current economic crisis. Those who are new and do not have that money to rely on or those who have not been so successful will go out of business. I know that Wiwingti said he was not in the business to make money but really who starts a business and expects to continue to stay in business without making money? You have to at least make enough money to make it worth your while to be in business... This is the same with other sword sellers - and when they reach that threshold of not making enough money to be worth being in business many of them will make the decision to cease their sales of swords.

3. Wiwingti was not the sole factor in sword prices being lower though - there are many ebay sellers out there who are importing direct from the factories in China and they are selling at prices that your normal retailer cannot meet or beat without being driven into bankruptcy. These sellers are either single person importers or often times sales representatives of the forges themselves. As such they can sell their swords at factory direct prices and this is a problem for most retailers worldwide - as most of them purchase their wares from an importer who purchases those wares from the warehouse. In that system the importer adds his own profit margin (at one point in time it was 30-40% I don't know what it would be now) and then the retailer adds their own profit margins too. In the case of the ebay sellers they can sell the swords and still make a 30% profit margin while selling their swords lower than normal retailers.

I see dark times ahead for those like ourselves if the global economy doesn't take a turn for the better. Sword sellers will be consolidated into a small handful of those who had the money put away to make it through. Prices will most likely not rise until the economy gets better and demand for luxury items such as swords increases. At that time with little competition on the market prices will rise - and perhaps to very uncomfortable points too. Its not impossible in my mind for a $300 sword to end up retailing for $400 or more in the future if the sword industry continues to shed low to mid level and even lower high end level retailers.

Yup, it's a mix of economics and consolidation I would say. The Economy(TM) as defined by thirty transnational corporations with loads of assets is doing okay, but unemployment is still extremely high which means a lot of people who might buy swords are out of work and even more are taking pay cuts, not getting raises/bonuses/etc. Throw in the FUD that comes with global turmoil and lulz deficit spending in most Western nations and you don't have a recipe for strong luxury sales.

There's also the repuation thing to consider. Anyone who's ever been to Ebay or a "sword store" knows there's more shysters and morons than legit sellers so people are just naturally going to gravitate to guys like KOA over one-man shops. Same reason people tend to shop at Walmart rather than Honest Bob's Five and Dime, even if Honest Bob truly is a paragon of virtue and could give a better experience.