After surfing youtube and the forums for a bit, I read and listened to the answers to the oft-asked question: "Why does that knife cost so much? I can get one at Walmart for twenty bucks". Got to thinking and here are some of my thoughts.
When asked this question, most of us (I say us but being a noob I neither sell much, charge much, or make much) give the answer as something along the lines of "It takes a lot of time, materials, and skill to do", just to boil it down. Belts, grinders, electricity, gas, whatever, and that's just the tools, not even the materials, and doesn't even take into account the time and skill, nor cost of living.
This is a legitimate answer (If time and materials cost requirement were reduced somehow yet still maintained quality, you can charge less and thus increase sales, because your knives are cheaper than, but just as good as, Mr. Wackleby's knives. Selling five $200 knives in a week gives a better payout than one $800 knife a week) but it rarely seems to satisfy and puts a bit of a blemish on the art.
What the asker hears is "Yeah, my knife isn't much better than the Walmart one, but I put so much work and time into it I'm going to charge twenty times the price anyway". To which, the asker will make an exasperated point, and the smith will answer with "You don't have to buy it, it's obviously not for you". The asker then leaves, with one or more remark demeaning remark in his absence, and the firm impression that bladesmiths are wacky people who practice an irrelevant craft, asking exorbitant prices for something you can get for a fraction of the price elsewhere. Today it seems more and more people are becoming aware of the forged knife (forged in fire for example), but this seems to retard that.
If we put it analogous to another craft, say cars, when a person asks a Ferrari dealer why a given vehicle cost so much (up to 400K), compared to a 1k car he can get from Craigslist, the answer isn't because "We need to pay a lot of employees, pay for materials, advertising, equipment, etc. etc.". No. The dealer will answer "If you drove it, you'll see. Have you seen this finish? Look at these wheels. Feel these seats. Feel the gas and brakes. Look at these features. Now tell me, how does the quality compare to your beat-up craigslist car?".
Or what about firearms? Compare a .22 plinker from the local sports store to a professional grade competition .308 rifle. They're both target shooting right? How come one costs so much more? Because of the extra worksmanship, materials, etc.? Yes, but if I'm selling you this .308 I'm giving you details on the scope, the smoothness of the action, the precision, etc.
If you're a highschool student getting your first car, or buying your son his first rifle, yes you'll go for the cheaper one. If you're a rich guy with cash to blow and a fascination in cars, you'll go for the Ferrari, or a competition shooter and collector who needs the best rifle, you'll go for the best one you can get. The difference that's relevant to the buyer between the choices is price and payoff (whether it's aesthetic or function or both), not what the cost to the seller is. To the highschool student, heck no the extra price isn't worth the payoff. To the millionare, the extra price is worth it.
If I'm a high-end chef, heck yeah I'll pay the extra thousand dollars for a handmade gyuto. My living depends on getting the work done quickly, professionally, and precisely. The beauty adds a pleasure to my work, lightening up a dull day, and the feeling of a good blade (balance, feel, motion, whatever) makes it absolutely glorious to use. The handmade factor (knowing what you made was created in fire, hot steel and hammers pounding, sparks flying, the swish of the sharpening stone, etc., as opposed to blanks being stamped out a hundred at a time) gives you a knowledge of the blade, and a fascination to it. It's not a tool to get vegetables separated at a boring pace, it is so much more.
From just a monetary standpoint, a chef may not have the extra hours (what is required with a $35 dollar blade) to do all the necessary cutting, chopping, and slicing in a day, so he'll pay an employee to do it (what, $15 an hour on the mininum?). That adds up. A lot. Spend $700 once, and you eliminate the need for that employee forever, and when you do the work yourself in just a fraction of the time, in just a few weeks it'll have paid for itself.
But then, for a mom who cooks at home, a stainless $35 blade from Walmart is what she'll go for. It gets an insignificant job done, and it's easy to care for. Yeah having a really nice custom blade would be cool, but it's just not worth the extra $700. To the pro chef, it is.
So basically what it boils down to, is we're telling the asker the reason we charge extra (because we need to), rather than the reason it's worth it to pay the extra cash (cause it's so much better in X ways). Instead of saying "It's worth $700 because it takes a lot of work, time and money to make", we need to be saying "It's worth $700, because let me just tell you about this sucker..."