Deposits On Orders

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Howard Faltz

Joined
Sep 16, 1999
Messages
71
Today with many makers having orders that may take up to 3 years or longer to fill. And the Knifemakers Guild with just as many customer complaints about unfilled orders. How do YOU feel about making (customers), or recieving (makers), deposits? In New Orleans I had a long talk with Ernie Emerson about his not taking custom orders till he catches up. Other makers also are, or are considering like actions. How do YOU feel about this?

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Howard A. Faltz, Owner
Arizona Knife Source
"Keep it Sharp"
Luke 22:36
www.azknife.com
 
I think that if the maker has a real long timer horizon (over a year or so) then he/she shouldn't demand a deposit to take your order. What I think would be fair in this case if for them to take your name, and put you in line...when it looks like they're going to actually start on YOUR knife, they can contact you and ask for a deposit to start the work.

~Mitch
 
I second that. Although, none of the makers from whom I have ordered blades have asked for deposits, and I think that says something as well (as in "I know my work stands on it's own quality, so even if you don't take the blade, someone else will"). Of course, if it's a really strange design, or really odd materials, the maker might only be able to sell it to you, so a deposit is definitely in order then.

--JB

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e_utopia@hotmail.com
 
My thoughts on this are that for makers with a long time horizon on delivery,what they could do is take your name and contact details. They can then provide you with an approx delivery schedule. At the time that your knife comes to an appropriate point in the queue, the maker can contact you to confirm the details of the order. At this point a deposit may be appropriate along with a definate delivery date.

This is the approach that is taken in other industries where there is a custom/bespoke product and extended lead times. Another advantage to this approach is that it means that the customer can get the knife that they want at the point of delivery, not what they wanted 2 years ago when they joined the queue.

Regards,

Ed
 
to me....a deposit confirms an order...I cant tell you how many orders have fallen thru after I ve gotten them done and given the guy a call (for a long time I wouldnt take a deposit)....I will not make anything that is even a little bit unusual without a deposit.....I know this is true thruout the industry...from very well known makers who have a long wait.....some people just decide to pass or dont have the money when their time comes up....should this be the makers problem? I am NOT saying this happens all the time...but enough for me to insist on a deposit....I know a lot of guys who dont take deposits....but they all go to a lot of shows too....so to them its just another knife they can take.....I should add...there are a lot of people that I know that can call me up and I will make them a knife, no questions, no deposit.... a lot of them are here on the forums...but Ive gotten to know them and trust them as friends....the above is mostly aimed at someone who I have never met or made a knife for before...

[This message has been edited by tom mayo (edited 08-02-2000).]

[This message has been edited by tom mayo (edited 08-02-2000).]
 
I did not ever take deposits until not all that long ago. The entire reason for this was that I had one individual blow a lot of smoke up my behind with how much stuff he was going to buy. He did in fact order a great deal of work, to the tune that I spent nearly a month working on it (multiple swords). When it came time to pay up, he had no money, but did have a nice little story to try to get me to ship across the country without being paid. Needless to say that did not happen. The result of the experience was that it took nearly six months to catch up and repair the damage done to cash flow from the situation, and it's not a real order until I get a deposit. We can talk about it, and that's fine, but unless I get a deposit (or it is a repeat customer that I know is good for it) then it is not an order.

I quit taking orders a while back myself, until things are caught up a bit. Getting months or years behind is not good for anyone. Attitude problems can and do result from very long waits, and they occur on both ends of the equation, maker and customer.

This is an issue that will not go away anytime soon. We all as makers need to carefullly think about how we are going to handle it, and it is up to us to deal with the customers in an up front informed fashion. So long as you let them know what is happening, and how long it will likely take, and be honest, most people seem to deal with it just fine (the waiting).

Part of the problem (at least from my point of view) is that we live in an increasingly "instant gratification" oriented society. The internet has not helped this. Ordering custom knives is not quite the same as buying stuff out of inventory from the retail store, and the customer cannot realistically expect it to be so. Some do, most do not, and handle it just fine. It is something that we all need to think about. I look forward to other replies.
 
I don't mind making a deposit if I know a maker is going to make my knife in the near future. To me, the deposit is a reflection of my genuine interest and good faith in ordering the knife.

On the other side, the stories about Emerson and his practice of taking deposits on knives he is not intending to make for a year or more...
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Bad practice. I won't deal with a maker like that. I don't care how good he is reputed to be in making a knife.

sing
AKTI #A000356
 
For me as a customer it depends on what I am asking for.

First it is rare for me to order a knife from someone who I do not know and trust (I hope they feel the same way about me.)

To me in custom knives the reputation of a customer is almost as important as a maker.

After all in many cases I am asking for something that will take weeks or months of a person's effort and ability to make that may not be easily sellable if I screw up and am not ready to take care of what I have on order.

Second, when I am interested in something that is going to cause the maker to purchase some extra-ordinary stuff for a design we came up with, I expect to be taking care of those expenses and some time that the maker is putting into the knife as they go along.

As the knife nears completion, I like to be very near to have paid for the work.

If it happens to be a model that the maker produces, a reasonable deposit does not bother me nor does paying for the knife in advance when there is an established relationship with the maker. (Never have had that happen.)

As far as waiting, I have never understood the impatience of friends who have been collecting for years. When you order from someone with a long waiting list, it does not make sense to me to be all wadded as to when the work will be finished. Seems like it would be better to loosen up and let the maker enjoy what they are making rather than adding more pressure. I feel the key here is what Howard mentioned communication on the part of all involved.

When somthing is agreed upon for several or more years down the road no-one can be exact all the time on when it will be ready. I have gotten to the point in my old age where I enjoy the wait. Heck if I have wait for 3 or more years what is an extra few months (to me it is no big deal especially when the communication has been there all along).


On another note: Welcome to BF Howard.
Glad to have you aboard here.

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" I am continually reminded of the rewards of dealing with custom knife makers and the custom knife community." Jeff J.

[This message has been edited by Gus Kalanzis (edited 08-02-2000).]
 
I have never been in the situation of having to quote more than a couple of months delivery time but I dislike taking deposits on standard models because of the pressure that it puts me under if I somehow miss a promised delivery.....Having said that "special" handle materials and such will require a deposit because of the extra cash outlay. My normal proceedure is to make up the knife to final assembly then call the customer for payment so the money order arrives when I am ready to ship.


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george
www.tichbourneknives.com
sales@tichbourneknives.com


 
I tkae deposits only on special order or high end knives.
All others I do not take a deposit on anymore.
Just to much paper work to keep up with ..

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Web Site At www.darrelralph.com
 
I used to take a deposit now and then but anymore refuse them. In fact, I quit taking oreders for a while due to my 2 year plus backlog. I hate having other peoples money!

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www.simonichknives.com
 
I think a "token" deposit is and can be good. Tom Mayo asks for a $25 deposit, shows you want the knife, commits him to making the knife and gives him a "little" something extra if, when the knife is ready, you can't or won't pay the knife in full. $25 is no big deal. If the maker takes an order without a deposit thats great as well. I wouldn't order a knife that I do not intend to pay for when it is ready, a deal is a deal and your word is your honor. That being said, life does soemtimes throw you a curve ball and if you've waited one, two, three or more years for a knife your financial situation can sure change. Jobs can be lost, kids can be born, homes are purchased, things you may not have anticipated or foreseen years ago. I think if, as others have said, there is open communication then things can be worked out. I know knifemakers are'nt charity organizations but when a guy is on hard times, and still wants the knife, maybe a payment plan or something can be worked out. If not, unless it was some kind of extreme specialty knife, it can probably be sold, close to profit, to someone else. However, if a maker takes a larger, substantial deposit, and gives a promised delivery date, then hell or high water they ought to try and stick to that promised delivery date. Waiting extra years for a promised knife that you've paid money for is TOTALLY uncalled for and should not be tolerated. Treat everyone with dignity and respect and expect the same. Motto to live by.
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"But if we took out all the bones it would'nt be a crunchy frog."
 
Deposits make knives more expensive.

If you pay $1000 up front for a knife you won't receive for three years, then the knife has actually cost you $1,242.30.

Why? Because if you didn't pay the for the knife until you received it, you'd be able to buy a 3yr CD at 7.5% and enjoy the benefits of compound interest.

Therefore, from an economic standpoint, the buyer should consider the opportunity costs incurred when making a deposit. If, for example, the buyer has two options, where one knife could be delivered today for $1200 and another knife of equal quality and appeal could be delivered in 3 yrs with a $1000 deposit today, it would actually be "cheaper" to buy the "more expensive" knife.

Yeah yeah I know... I'm a bond trader, what can I say?
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Delana has a back log over 3 years. She will call you when your name gets close to the top of the list, to confirm design, cost, dates, etc. Good idea, huh? After 3 years what you may want might change, as well as your situation. Another maker we know, will not make a TRUE custom, because his experience is that the customer never thinks the knife is "right", therefore should be discounted. Yet another, makes two of each knife. One as ordered, the other, made the way the maker feels it should me made.

A few years ago "Blade" did an article about this and MOST makers interviewed, did not approve of deposits..primarily because of the pressure.

Hey Rob, if you don't like having other peoples money, I have a great idea....
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Howard A. Faltz, Owner
Arizona Knife Source
"Keep it Sharp"
Luke 22:36
www.azknife.com
 
I find it extremely ironic that this topic should come up with some of the above-mentioned names! Paying a modest deposit - along the lines of $25 or $50 - is perfectly acceptible and gives the maker some sense of commitment on the part of the buyer. If you're not willing to put up $25, you're not ready to order the knife.

But, any maker who accepts hundreds and hundreds of $25 deposits on knives he knows full well he won't possibly make for several years is acting in bad faith. For one obvious reason, with that sort of backlog, he needn't worry about getting stuck with the knife when there's dozens of other customers waiting for one behind the guy who ordered it! Promising delivery without any possible hope of fulfilling the promise is wrong, frankly, even if no deposit is taken.
This sort of behavior is, I believe, antithecal to the Guild's by-laws and leaves the maker open to sanctions by the Guild if he is a member. Let me hasten to add that I think there are very very few makers who engage in these practices, as most are wonderfully honest and honorable.
 
As a custom knife colector who started collecting in the early 70's from Corbet Sigman I can offer a perspective. When a makers back orders generally exceed 7 or 8 years they stop taking orders ala Loveless and Moran. The prices also esculate on the open market and they have a hard time selling a knife and having that knife immediately sold for a profit. For a new maker, I feel a deposit of $50-$100 is acceptable as long as the delivery time is reasonable(within 1 year). If the delivery time is greater than 1 year the deposit should be reduced and if on the order of years, a waiting list is acceptable. The maker should notify you when he is ready to produce your knife and ask for the full price when delivery is less than 3 months away. Using this approach, I have never had a problem with a custom knife maker and have some good relationships over the years!
 
Deposits are a funny thing. They have both a positive and negative side, for both the collector and maker.

When myself and 3 other custom knife dealers, Bob Neal, Jerry Schroder and Gary Shaw were doing a seminar at the Blade Show last year. This question was debated for a good 10 of the 60 minutes of the seminar.

For my part, with few exceptions there should never be a deposit. The exceptions are:

1) As Darrel pointed out, the customer requests a very expensive knife. One in particualr that will have difficulty being resold quickly. In this case a 50% deposit is fine. Lets you know the customer is very very serious.

2) You insist that the knife maker make what you feel is the most beautiful knife in worly. In fact this knife makes people "avert their gaze" as to not be struck blind by the hiedousness of this knife. In this case the collector pays a 100% deposit.

First, a $25 deposit is nothing. It insures nothing either way. Case in point Emerson, lots of $25.00 deposits, very few knives delivered even close to on time. To the maker it insures nothing. A customer in the face of cancelling a $400 knife they cant pay for and losing the $25.00 and trying to come up with the $400, it's a no brainer there.

Ok so you as the maker get a 25% deposit ($100 on a $400 knife). In most cases you cover the costs of your materials with that.

The down side, you have entered into a contract with a customer. Any customer who gives such a deposit should ask you to sign the receipt agreeing to the price and delivery date. This would protect both of you.

However, in reality since most knife makers do not meet their delivery times (for 100's of reasons), legally you could be sued by the customer and you would lose. So think about taking that deposit.

Also, by taking that deposit you have given the customer the right to call you any time they want to check on the "progress" of their knife.

It's August and you told them it would be ready in April. All of us have had that customer who called in September "to see how it was going". Those calls will continue, to the point you will either finish their knife early to get rid of them, or give them back their $100.00.

Chosing the latter hurts you the maker, as you have long since spent the $100 and now have to come up with another $100.

For the customer giving some knife makers money early is the worst thing you can do.
Here is why.

There are a few knife makers that require a 50% deposit and have a two year delivery time.

As Wulf and JBravo pointed out. By giving that 50% deposit, you allow the maker to bank your deposit for two years, while you lose the opportunity to bank that money. So in fact the knife costs you more, and in theroy should have decreased the cost of your knife, because the maker received interest on the money.

Also, giving a maker a 50% deposit in fact allows them to live on 150% of their salary. Which all of us could do with no problem.

The problem could (and has happened to makers in the past) evolve into a very negative cash flow problem. To the point where the maker cannot live on the 50% of the cost of the knife that will be paid to him for the finished knife. Consequently, your knife gets delayed further and further as the maker needs to build the knives he will receive full price for.

You find your phone call, letters and emails are no longer returned. If you do catch up to them there is always a hundred excuses as to why the knife is not or cannot be made.

Now customers do this as well. After the knife is built, the makre contacts him/her. The person does not have the money or is no loger interested it or whatever. So the customer ducks the phone calls, letters, emails.

Most makers who claim to have a 2 year or longer wait, don't. If they were to contact the entire list they would find out that some are:

No longer collecting knives
No longer collecting that type of knife
Got Married
Got Divorced
No longer employed
Lost job, but got new one that pays less
Kids are entering college
Just started a family
ETC.

These are just some of the reasons (legitimate reasons, not excuses) as to why the list is not really two years long.

While I am not a maker, I sell a lot of exclusive knives. LDC and Vanguard Knives are two examples. I do not and will not take depsosits. The main reason is I am to busy to have 20 people a week calling me and asking me what is the status of their order.
I allow people to put their name on a list.
If I contact them and they cannot take the knife for whatever reason, no problem.
Because the makers I work with, the designs, materials used and all the press these knives get I know there is no problem selling that knife to someone else.

Each maker is a "independant contractor" so it is up to each of you to figure out what works best for you.

Each customer, any time you give a deposit, you get it in writing from the maker:

The Final Cost of the Knife
The amount of the deposit.
The approximate delivery time. Give them 3 weeks either way. That way even if the miss your actual delivery date, you can remind them of your "contract" and that gives them 3 weeks to push everyone else aside and meet their contractual obligation. This also gives the maker a little leeway to finish the knife early and get paid. Although, usually a maker calling up and saying the knife is done a few weeks early is not a problem for most collectors.

For my own part, Ive mostly good experiences with custom knife makers. However, there have been some where Lawerys had to be brought in for the maker to live up to their end of the "agreement".

So to makers and collectors alike, I hope this post gives you pause to think about the impact (both positive and negative)that a deposit can bring.




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Les Robertson
www.robertsoncustomcutlery.com

"If you are out to describe the truth, leave elegance to the tailor"
Albert Einstein
 
Howard,
I'll have to ditto Darrel Ralph. His concept works for me... and my customers are in agreement. I think MOST are in agreement that a deposit is needed on that really far out or expensive order. On all other knives that could easily sell to someone else, why bother with a deposit.

Ron Newton
 
Rob Hudson, Rob Simonich, Rob Criswell, hmmm three Rob's, have a similar way of doing business, you get on his list and when your name reaches to the working stage you get a call, also to make sure nothing has changed with your order, and then he'll make the blade for you.

Beautiful knives by the way, haven't seen a lot of Rob lately though.

Deposits....if the knife is truly something that no one else would want, hard to imagine with todays makers, then a deposit might be inorder to prevent a White Elephant sitting on your shelf. The sheaths I make, I normally ask for payment when they receive the sheath, may be risky, but Like Rob Simonich, I really don't like holding on to someone elses money, that only adds stress to the work load and the work load can be stress enough.

Also have a knife coming from a guy that Matt Lamey referred me to, Paul LeBatard in MS, he is making a folder with sheep horn scales and wharncliffish D2 blade, sending it up this week. If I like the knife....fine send him the money, if I don't like the knife, he has no problem with that, just return the knife. For the most part people are very honest and with the internet they're name can become stained all too quickly so they best beware. But there are still those that can rip you off. Rob Criswell swords, he was going to send me a sword without receiving the money order, I asked that he wait until he received it first, in the case of my sheaths we aren't talking over $100 so it's not that great a risk for one order, but swords/knives seem to cost somewhat more?
If a maker asks for a deposit for materials I'd be leary of him, unless he has made for you in the past and that's the only way to keep his cash flow going, part time makers and the like.

G2

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"The Road to Hell is Paved with Good Intentions!"
Take the time to read your Bible Now, don't be left behind...

G2 LeatherWorks
 
Guys, I tend to lean towards Les' opinion. Try this on for size:

Almost two years ago I sold a rather nice custom knife to a surgeon and VERY serious collector, customer of ours. This knife was made by a promising new maker. We thought highly of him. The doctor, asked if Bill (not his real name)would make another like knife for him with a different blade. Bill (still not his name)gave a 3 month deliver time. Three months later, we were told 3 more months. Same story in 3 more months. 4 months later, the good physician asked again about his knife. I called Bill(guess)and was told that although the parts were in a box almost 6 months, that he would not make the knife. After a few awards, Bill was now too busy and making knives with precious gems and hs own forged damascus. He was under pressure to produce for upcoming shows. We conveyed this to the doctor. Not happy at all. I wonder what would have happened of he had requested a deposit. Same maker made a knife for one of our employees. It was delivered with serious blade flaws and that "cosmetic flaws" were not warranted. We got him to replace the blade. This same maker, on his web site touts that his work is unconditionaly warrented. Right, we will never carry his work or recommend him.

I wonder if any other collectors have had a story like this non-deposit case.

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Howard A. Faltz, Owner
Arizona Knife Source
"Keep it Sharp"
Luke 22:36
www.azknife.com
 
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