Hello, and welcome to Crafting a Life.
I’m Evan Dunstone and this is the Dunstone Design podcast
Episode 10, “Value Verses Price”
For my 46th birthday, I bought myself a hand forged double bladed Swedish competition throwing axe from the good folk at Gränsfors Bruks. Boy have we had some fun with it.
Gränsfors Bruks produce their axes “off the hammer”. In many ways, axes are ideally suited to mass production techniques. The head can be cast, ground, polished and out the door in the blink of an eye.
Instead, Gränsfors Bruks have a team of smiths who use a variety of power and hand hammers to make each axe with intent. They are beautiful objects. They also perform extremely well.
When I bought my axe, the sales man tried to tell me that each axe took more than 10 hours to make. He was trying to justify the price. He then offered me a discount without my asking for it.
I was a bit surprised. Did he seriously expect me to believe that a Swedish craftsman could take 10 hours to make something, ship it halfway around the planet, and sell it to me profitably for $360 including GST?
Working backwards, the GST in Australia is 10%, so the raw price of the axe to me was $327.27. Who knows what the seller’s margin is, but let’s say he had put a paltry 50% margin on the cost price. This gives us a wholesale, or cost price, of $218.18.
Let us suppose that the steel for the head and the timber for the handle collectively cost the equivalent of $15 AU. Let’s also suppose that the nice leather sheath and the printed booklet cost a further $15. Let’s throw in a further $15 to ship it to Australia. That leaves us with a gestimate of $173.18. This amount has to be covered by the hourly rate of the craftsman. Whatever that hourly rate is must allow for all the fixed costs or overheads, as well as the wages of the craftsman and the variable overheads of the marketing and support staff. I have seen the Gränsfors Bruks web site and I know they have a well-equipped workshop with some very old and very lovely trip hammers and forges, as well as a support team. There are 30 people employed there, of which I believe around 20 are smiths. Each smith’s productivity in effect supports half an employee as well as one twentieth of the fixed and variable overheads.
There is no way that 20 people each making only four axes each a week for $173 each could support all that infrastructure. 20 x 4 x 173 is only $13,840. Divide that by 30 people and they are each earning $461 a week without meeting any of the overheads.
I’m taking a wild stab, but I’m guessing the axe head takes about an hour to forge, the handle takes about 20 minutes to make and fit (it is clearly made on a copy lathe and hand fitted) and I recon it takes another 10 minutes or so to sharpen and finish.
I understand that the salesman has the same problem that I have. How can he explain to the average person that this axe takes around an hour and a half to make and is worth $360? Very few of his clients will be professional craftspeople and see what I see.
First, to be a Gränsfors Bruks smith, you have to have the latent talent. I guess maybe 1 in 1000 people would have the basic potential. The number might be lower. Then you need the dedication to spend the 5 years or so that I imagine it takes to be able to make the full range of Gränsfors Bruks designs well enough to do them completely unassisted. Quite a number who start this process will not last this long, either because they discover that they are just not good enough, or they find the work too hard on their body, or because they realize that there are many easier ways to make a living.
It probably takes another 2 to 4 years to develop the combination of speed and feel to make the axes at the commercial rate of an axe head every hour or so. Obviously the time to make different designs will vary, but you get what I mean.
In my experience, it takes somewhere between 6 and 8 years for a craftsman in any field to truly hit their pace. Even then, if we assume that quality must be consistent, you will find a range of time taken across the team to make the same object. Just think of shearers here in Australia.
I bet that two or three of the Gränsfors Bruks team are real guns and can power through the work. I bet that the majority of the smiths, let’s say 12, are pretty similar in their times and quality, and there will be two or three who are just slow by comparison and unremarkable with their quality. And there will be one or two guys who are quite slow, but are incredibly capable and knowledgeable and make beautiful work. They are probably the oldest.
Gränsfors Bruks makes a point of saying that their smiths do not work on piece rates. They are given the time they need to do the job properly. This is a critical point in a craft workshop. Piece rates can put unhelpful pressure on a maker, and damages the team work. If they are on piece rates, a senior craftsman can resent training or assisting a less experienced maker, because they are slowing them down and thus reducing their income. They might grow to resent the apprentices.
Also, those two or three slower guys at the bottom and the older guys at the top, might not be quite able to get by on piece rates alone.
So why not introduce piece rates, get rid of the slow guys and pay everyone directly on their personal productivity? Because, quite simply, there are a limited number of people good enough to work for Gränsfors Bruks at all. The pricing will be based on the guys in the middle. The guys at the top carry the guys at the bottom, because the collective output is what is required. Craft teams can only work if everybody in the workshop understands and accepts what everyone else brings to the table. A craft workshop is much like a family, with the people in their prime supporting, to an extent, the juniors and the seniors. Everyone is contributing, but the contribution has a trajectory over time, and within the scope of their abilities. By definition, they are all elite makers, even the slow ones.
My axe salesman could have taken quite a different approach. He might have said something along these lines; this axe was made by an expert craftsman. The axe is finished straight off the hammer; only the cutting edge is ground. A handful of people have the skill to do this. It takes the best part of a decade for a craftsman to reach the skill level required to make you this axe in an hour. It was only possible to train this craftsman because of the 100 year history we have in axe making, and because of the efforts of generations of axe makers. Everything we know about axe making is in this one axe. It is uncompromised. You will not buy a better axe from any axe maker anywhere in the world, for any amount of money. We can make this extraordinary axe, bring it halfway around the world and sell it to you for only $360. Its value is priceless, but its cost is only $360.
I love my axe, and I also happen to think it is as cheap as chips.
You have been listening to Crafting a Life, the Dunstone Design podcast on all things furniture and woodwork.
I’m Evan Dunstone, and I look forward to your company next time.
Disclaimer; I have no particular knowledge of the commercial operations of Gränsfors Bruks. My comments relating to the operations and/or staff of Gränsfors Bruks is purely speculation on my part. My only relationship with Gränsfors Bruks is as a satisfied customer.