Clients and Makers and Deposits, Oh My!

Robert, this entire thread is about why it doesn’t work for many. You’ve obviously got a great sense of business acumen, and run a tight ship, which is why a deposit DOES work for you. However, almost every other observation presented here has demonstrated that others aren’t quite as capable of maintaining the delicate balance necessary to juggle all the in’s and out’s of running a business.

The greatest injury, in my eyes, is that the makers in question will likely never see a rebuke for their transgressions here, because the collectors that have been wronged are good people that don’t want to pile rocks on a sinking ship. That DOES make them good people, in my eyes, but it also lets someone that might benefit from the public lashing out of accountability, and that will likely lead to others being shafted by these makers' lack of ethics.



scottishsmith24 said:
The idea of not taking deposits has always baffled me, I can certainly understand if the waiting list is more than a few months why that would become an issue. But I have been full time for over five years and singly supported myself with my income, then married, and bought a home. I do not have a big waiting list as I have never allowed one to develop, and I have only ever been late on a deadline to a customer once (by a matter of a few days of quoted time). I sell a lot of production knives and customers or businesses will place the order for the product and pay the full price plus shipping, then within a week to a week and half it is on their door. For custom work I typically request a 50% deposit to cover the materials (as I am normally using damascus, fossil ivory, etc.) I was only ever burned once by a customer not paying for their work and that was enough for me. This system has worked very well for me with essentially no problems. It's standard practice in pretty much every other business so I not sure why it isn't the case in the knife world?
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Matt, I fully agree that is a system that almost never works when artists are concerned and avoiding taking deposits just straight up avoids the issue, but then it places all of the risk on the crafts person (which is my only issue). Sometimes I joke (and it really is a joke) but that sometimes I feel like a businessman that just so happens to be a knife maker. For me deposits are just a way of mitigating risks to myself and my business but you also have to have very strict discipline in place to not make the customer's feel like they are taking a risk, because in all reality they are an equal lifeblood to the craft and just as important as the makers.
 
As a custom knife buyer, I appreciate a maker who doesn't require a deposit (other than for expensive exotic materials) because it gives me the impression that they are confident in their skills and abilities to deliver an excellent knife. It also gives me the impression that they are confident that they can sell it to someone else if I don't come through and they will not be "stuck" with it.
I would however feel terrible if something happened that caused me to fail to keep up my end of the deal. I'm not the type of person to just willy nilly change my mind and back out of a deal just because it's "no skin off my nose"!

The most important thing to me is COMMUNICATION! Both ways! If something happens and the maker will not be able to meet the agreed on details/ completion date for whatever reasons, that has to be addressed as soon as possible. Likewise, the buyer must communicate any issues on their end with the maker as soon as possible.
Good communication will avoid all kinds of misunderstandings and hard feelings and lead to satisfaction with both parties 9 times out of 10!
There is really nothing more disappointing or frustrating than someone who owes you money or goods going dark and seemingly falling off the face of the Earth! Especially if you are the only one they seem to have gone silent with!:mad:
 
Don Hanson III said:
He hasn't started it yet. Keep after him, the squeaky wheel is the one who gets the grease, usually.
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Well, asked how it was coming yesterday and haven't heard back. He's posted other knives for sale recently, so I know he's working. Starting to get frustrating.

I'm not really worried he's not going to make the knife, because he's obviously working on knives and had good communication, but come to think of it he did request PayPal gift for the down payment. Thankfully I just adjusted for fees and did goods.

I'm remembering why I dipped my toes in customs a while back then decided the water wasn't as nice as I had hoped.
 
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I believe the PP Gift for down payment is due to the fact most would treat that as non-refundable in the first place and using gift we know is non-refundable.
 
I always avoid absolutism and prefer to take a flexible approach to things. While I generally agree that deposits are not a good idea, I've got 4 or 5 knives, partially complete, in various shops all over the place that I've completed my part of the deal on. More important to me than the knives is the trust and respect which lead to their creation in the first place, so I'm very careful with who I front to and recognize the significance of patience, because I know that;

The hardest knife to make is the one which is already paid for.
 
Some very good reasons for not taking deposits...

1. About 3 years ago I got an infection in my knee. Within 5-6 hours it was bad enough to go to the hospital. 3 hours later, I was rushed to a specialist 200+kms away. That night, I went into septic shock and 24 hours later, they were talking about surgery and the possibility of losing my leg! I spent 9 days in the hospital, kept the leg. I couldn't stand on my feet for more than 2 minutes at a time(going to the bathroom was an exercise in sheer willpower). It left me out of the shop for about 6 months.

2. Two years ago, I built my third and final shop(hopefully). The intention was to continue working while the contractor built to my specs. That idea went to hell in a hand basket and i spent months doing it myself and contracting out jobs as needed. Needless to say, The shop was shutdown for most of the fall and winter.

3. I have also been fortunate enough to have done work for 20th Century Fox and Disney films. These folks approach you with commissions that are already behind schedule. If you don't drop everything on your plate to accommodate, they just move on to the next guy. Although I don't make a ton of money off them, I jump at the chance to be part of a major film. It can sometimes monopolize me for months.

It is bad enough to be forced to push back requests, but having deposits hanging over my head would be completely overwhelming, IMO. I have a hard enough time remembering to eat and drink during the day. My broken brain has difficulty compartmentalizing information and my available RAM is bordering that of a 1978 TI "Speak & Spell". I'm sure some of my clients are frustrated but at least I don't have their money in my pocket, to boot.

I would also like to add that on two occasions I've had clients jump the gun and send a payment before completion, rather than wait for billing. BOTH times we agreed to roll with it, and BOTH times I felt as if I were on a leash. It worked out well but I hated that feeling.
 
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#1 is unforeseeable issues that can and do arise this is where it does become a complication but these should be few and far between while it would hurt and might have some damage I would expect it to be less impactful circumstance to your reputation if you did take down payments. I am not suggesting you change your ways but this is just one that I agree with it being an issue but I question the severity of it to the business and/or it's and your reputation. I am glad you kept your leg.

#2 While you had intent to ave a work environment while your new shop was built this is something that would be easier to plan around and less likely to create down payments w/o the ability to work and complete the works commissioned. Certain very problematic otherwise as the flak for a failure to plan would be damaging.

#3 If you are lucky to have such opportunities absolutely and this could be dealt with in a variety of ways which on top of the list is opportunity to require additional funds for the rush and prioritization of them ahead of your current work load. That does have the potential to lose out on the opportunity so it is a tricky matter and probably the biggest roadblock of the three to taking down payments.

Just again playing devils advocate and poking at your reasoning. I don't want to pay a down payment if I can help it but I do understand the principle of the practices and most the horror stories I hear involving it show someone who poorly implements it.
 
I agree with most of your comments.

#1 I'm sure nobody thought less of me when I was dealing with the leg and got backed up. Even if they had deposits down, there most likely would have been no issue.... except in my own head.

#2 The shop build was impossible to plan around and sucked the life out of me. Still bitter about the work ethic in my local builders, inspectors and town planners. I fought tooth and nail on everything I wanted. Some of the quotes I got were from $68,000 down to $21,000... for the SAME BUILD, SAME PLANS. It went from a 4 week build, to 5 month adventure in weather delays, extra costs and sub-par workmanship. It was crazy.. I ended up doing most of the electrical, plumbing, drywall, siding, insulating, painting and trim, myself. I had planned to not even raise a hand during the build.... nope.

#3 I can't add more for expediency when dealing with these movie companies. It is as you mentioned... they would drop me.... lol... film budgets in the millions and they argue about saving on $100 shipping fees.

That's why I started this thread... to hear opinions from others. So far, the majority of replies are against deposits. Perhaps just the horror stories are worth reporting... I couldn't tell you. Thanks for chiming in.
 
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The sad thing is, it is not the "Deposit" that is the problem.

The problem is the maker. Guaranteed a maker who has problems with deposits probably that is just the tip of the iceberg with that person.

True story.

A friend of mine was at a hammer in and purchased a blade made by a very famous maker, friend to many here. He paid $500 for the smiths forged blade without a handle. He sent the blade to the maker to have him put on a handle.

3 years later, after asking for the completed knife he got silence mostly and some excuses. He was told the knife would be completed and sent out. Nothing came, more excuses. My friend finally asked for his $500 dollars back because he was sure the maker had sold the blade to someone else, or he lost it.

After many weeks of silence the maker sent him $600 after a post was made about it on instagram.

As we know even the most famous makers are not always trouble free.

We have a "Character problem disguised as a deposit problem"
 
AVigil said:
We have a "Character problem disguised as a deposit problem"
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I don't think this is a false statement but I don't believe you can paint across the board with that broad a brush. Some guys run a tight ship, take deposits and give delivery dates... many can't or refuse to work that way. I wouldn't be so bold as to assert they are troubled makers. Some people just do not want to be in someone's pocket or work under a deadline. Quite frankly, I cannot work under somebody's thumb and deposits give me that feeling.... many thumbs. Not just that, but I have had several customers legitimately back out of a project due to unforeseen circumstances. A lot can happen over several months. Most are pleasantly surprised that I don't ask for money upfront.

I currently have a 2+ year back log. Some of my customers are saints and willing to wait and allow me to focus on the squeaky wheels. I still get 2-3 requests per week. You are not guaranteed to get a knife from me if you submit a request. My Musso Bowie and Waki are probably 3 years out! I have to like what I am doing to make a good product and pumping out repeat models, week after week, is not what I want to do. In fact, knives aren't my only shtick, so I cannot run it like a production shop. I think if I could maintain a 1-2 month turnaround, deposits wouldn't be an issue... that ain't my thing.
 
I think deposits are a dangerous combination of a formal relationship and financing. Some people are really sensitive to the state of relationships, and feeling out of balance is a serious psychological drain. It sure is for me. Even if I could keep up with demand, I'd feel lousy about deposits. On the other hand, I do this as a hobby, so it CAN'T become a priority over the other things in my life. The possibility that someone's going to get impatient with me over a $50-$100 deposit for hours I'm selling at 1/4 what I make in my primary industry is just completely insupportable. That knife will never get prioritized over my day job, but I'll always feel the tug of that obligation far out of proportion to its monetary value. On the other hand, if I could make a $1000 knife in a reasonable amount of time, and worked on no more than 1 or 2 at a time, that might be a different story. But that's a lot of ifs.
 
Inasmuch as we would like influence in selecting a maker's future work, this allows for 'commissions'.

Commissions carry the probability of deposits.

Many knifemakers are notorious bad business persons (not all, but enough to generalize). They are Cowboys and Artists. Business acumen (learned) is not their strongpoint.

Simple human nature will always dictate that past money spent has no motivation for future labor. Sigh.

One answer is to simply NOT take orders. Build and sell as they come. You need to have a strong base to ensure this always happens, yet if you can't move current work:

A. The style or build is not in demand
B. It's priced too high.

Mike Snody opened up my eyes when he declared 15 years ago that he would never make custom orders. For this reason and more: Stagnant creativity was another.

Even in my relative small ticket business, I DISLIKE when a client pays in advance, but it's necessary. It's how I do ALL my Show work, and I HUSTLE to get them finished so I can breathe with now-earned funds. I don't like to run from behind.

That's me. Other honest knife makers are also saying "I fulfill, what's the problem?"

One bad apple....

Good thread.
 
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