I met a blacksmith at a Christmas party the other day.
Not the usual meet cute, I grant you.
His name was Tom, and he’s not just any old blacksmith – he makes customised armour for battle re-enactments.
I’d assumed the armour used for such purposes was plastic, but no, it’s actual armour, manufactured from steel, and making it and selling it is quite the endeavour.
It takes 2-3 months to prepare most orders (with their biggest order taking 18 months to complete).
There’s more demand than supply in the UK, so they get plenty of work, but I wondered whether there might be competition from overseas.
He told me that while you can source cheaper armour from Eastern Europe, they can’t offer customised fitting, so his target market isn’t interested in lower prices from further afield.
That’s when I forgot the hat I was supposed to have on.
Rather than “entertained guest at the party”, I immediately put on my “business owner who loves sales, niche offerings, and pricing”.
I immediately jumped in with, “Wow, that is brilliant, you have a trapped market, you can charge whatever you want!”.
Tom looked at me blankly: “No, we can’t because it is a luxury item. People don’t have spare money for luxury items. You can increase the price on something they need, but not on a luxury item”.
Still not reading the room, I replied with, “Look at Rolex. Who NEEDS a Rolex? No one. But there are plenty of people willing and able to pay them £19,000 for a glorified Casio watch!”.
“Armour is not like a Rolex”.
“No, it is even better, as it is not even conceivably utilitarian. If they have the spare money to buy customised armour, then they won’t miss an extra £500 or £1,000 for the same armour, which would be pure profit. “
“No, that is not how luxury goods work”.
And that is when I realised I was talking to the blacksmith. Not the business owner, not the sales and marketing guy.
Tom was extremely able when it came to producing armour. But it was down to someone else to sell it, so he didn’t have to worry himself about trifling things like price elasticity.
