This has been an interesting thread and I have enjoyed reading the different "takes" expressed. My perspective as a buyer of custom knives follows. I don't buy $1000 knives. Therefore, for me a standard deposit of $200 would seriously impact my decision to order a knife. I don't mind a reasonable deposit based on the value of the knife ordered, e.g., 10-25% of the agreed price. I don't usually ask for expensive materials that may justify a larger deposit. I have only been asked for a deposit twice, in both cases by a maker that I hadn't previously bought from. As a repeat buyer, I have never been asked for a subsequent deposit. I have been "burned" only once and that was when I paid 100% in advance for a belt-sheath combination. After a year and with the help of a knife show sponsor, I finally got my money returned, but it soured me on the maker and deposits in general. For the types of knives I like, there are many makers who do excellent work without placing a maker or myself in a position that generates potential negative expectations.
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Flat Rate Deposit
- Thread starter Karl B. Andersen
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As a buyer, I don't necessarily mind a deposit. I know that you have to buy materials, etc. and want some surety as to compensation for your work from a buyer you don't know well. But, once you have that deposit, you damn well better be able to account for it. If you must spend it, it should be on MY knife... I don't want someone robbing peter to pay paul sort of thing. Should you decide to go out of business or not make the knife, I don't care if it puts your family out on the street... send the refund promptly or make direct arrangements to make good. That's just integrity. A blanket statement of "I'll make it up the the people who have orders and deposits with me when I get back on my feet" just doesn't cut it for me.
Next, I agree with what other people have said: once you have accepted a deposit, or payment in full, you are committed and bound by a reasonable timeline. Yes, that timeline can be extended, with proper communication. If you have dropped the ball, fess up to it without b.s.ing and tell me what your solution is.
Nor do I think there should be any reason why you should hold someone's deposit for more than a few months, regardless. Should you be lucky enough to have an extensive waiting list and still need upfront money to cover expenses, some sort of message saying "I'm getting ready to start your knife, with a planned delivery date of X. As we discussed, I will need a deposit of $XX by (whatever date works within a week or so)." Then work to deliver as promised.
Once you have my money in your account: yes I want to know how things are going. Email is best, but a phone call is fine. Nor do I believe that I should have to request an update, it is incumbant upon you to drop a line. If you can email pics of key points in the process, so much the better and that enhances the experience. I don't expect a blow by blow weekly. If, say, you are going to deliver in 3 months...an email in two weeks saying you have started. In a month, some sort of contact is appropriate. As the deadline approaches, more communiction is better. If we are 2-3 weeks past the deadline and I haven't heard from you, I'll track you down and will need some answers...and yes, I'll be annoyed. If you don't have something tangible a month after the deadline, I assume something is going on and I'm being taken advantage of.
If you're not holding a deposit, I'm a little more flexible, but still expect reasonablity.
Next, I agree with what other people have said: once you have accepted a deposit, or payment in full, you are committed and bound by a reasonable timeline. Yes, that timeline can be extended, with proper communication. If you have dropped the ball, fess up to it without b.s.ing and tell me what your solution is.
Nor do I think there should be any reason why you should hold someone's deposit for more than a few months, regardless. Should you be lucky enough to have an extensive waiting list and still need upfront money to cover expenses, some sort of message saying "I'm getting ready to start your knife, with a planned delivery date of X. As we discussed, I will need a deposit of $XX by (whatever date works within a week or so)." Then work to deliver as promised.
Once you have my money in your account: yes I want to know how things are going. Email is best, but a phone call is fine. Nor do I believe that I should have to request an update, it is incumbant upon you to drop a line. If you can email pics of key points in the process, so much the better and that enhances the experience. I don't expect a blow by blow weekly. If, say, you are going to deliver in 3 months...an email in two weeks saying you have started. In a month, some sort of contact is appropriate. As the deadline approaches, more communiction is better. If we are 2-3 weeks past the deadline and I haven't heard from you, I'll track you down and will need some answers...and yes, I'll be annoyed. If you don't have something tangible a month after the deadline, I assume something is going on and I'm being taken advantage of.
If you're not holding a deposit, I'm a little more flexible, but still expect reasonablity.
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I recommend makers don't ask for deposits (unless something exotic) and collectors don't pay them as it seems to complicates things.
If any maker that I currently support needed money down however I would oblige, thinking it was not because they didn't think I would not honor the deal but just they needed a little help.
If any maker that I currently support needed money down however I would oblige, thinking it was not because they didn't think I would not honor the deal but just they needed a little help.
jdm61
itinerant metal pounder
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I think that you should not take a deposit unless you have to lay down a large chunk of cash for materials that you would not have otherwise bought. If the knife was personalized, like with some kind of engraving, etc, I would want the full price before I had that step done. I'm not sure that I would take a commision on a knife that was so "unique" that it would not sell otherwise.
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Karl,
I don't like to take deposits either. The comment about the customer "owning" you is pretty accurate. I am filling an order like that now. The customer just wouldn't let me take the order without a deposit. He hasn't gotten out of line or anything, just a comment here and there and expecting some extras that I should charge for. I have been in business long enough to know the whole situation could turn for the worse if not handled with care.
On the other hand, I took a large order in Reno and asked for a deposit so I could order materials. This is the only instance I don't mind doing it. There are also times I will ask for payments if the piece is going to take several weeks. It's difficult to work for weeks on end with no income.
I don't like to take deposits either. The comment about the customer "owning" you is pretty accurate. I am filling an order like that now. The customer just wouldn't let me take the order without a deposit. He hasn't gotten out of line or anything, just a comment here and there and expecting some extras that I should charge for. I have been in business long enough to know the whole situation could turn for the worse if not handled with care.
On the other hand, I took a large order in Reno and asked for a deposit so I could order materials. This is the only instance I don't mind doing it. There are also times I will ask for payments if the piece is going to take several weeks. It's difficult to work for weeks on end with no income.
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Karl, I agree with the many knifemakers who have posted recommending that you do not take deposits except under special circumstances. As a collector, I generally do not order from makers who require deposits. There is too much potential for things to go wrong down the road (we have seen it with several knifemakers in the past), even if your intentions are good.
Many collectors that I know of refuse to order from any makers who require deposits. I am fairly certain that if you do start requiring deposits, you will hurt your business by decreasing your potential customer base.
Why are there no knives being completed and delivered between now and Blade?
Many collectors that I know of refuse to order from any makers who require deposits. I am fairly certain that if you do start requiring deposits, you will hurt your business by decreasing your potential customer base.
Why are there no knives being completed and delivered between now and Blade?
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There are, and enough to keep me afloat. But when you think about it, Blade is only about 14 weeks from now.
It's not just any old show, either. And it's my show to present JS knives. It's a little difficult to focus right now on business as usual, so, I was thinking about doing something unusual!
I was prompted to begin this post by some rather uncommon knife commissions, and as such, I guess they should just be given their individual remedies instead of an across-the-board solution.
Surely a lot to think of here, and I think I will not be accepting deposits in the future except for the rare instance when the ramifications dictate.
It's not just any old show, either. And it's my show to present JS knives. It's a little difficult to focus right now on business as usual, so, I was thinking about doing something unusual!
I was prompted to begin this post by some rather uncommon knife commissions, and as such, I guess they should just be given their individual remedies instead of an across-the-board solution.
Surely a lot to think of here, and I think I will not be accepting deposits in the future except for the rare instance when the ramifications dictate.
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a deposit unless a special order, i.e. expensive materials or unusual knife. I have several knives on order at any given time and makers rarely are able to meet timeline commitments so why put themselves under additional pressure by taking $$$ up front. If a maker was to take money up front I would be more inclined to hold them to their timeline commitment.
My practice is to ask a knifemaker about when they expect to be able to make the knife and I ask them if it is OK to contact them about a month prior to see if they are still on schedule, they always say yes. When I contact them I ask if they are still on target or for a new date, if not, and again ask if is OK to again check about a month in advance. When it is about a month out the maker is usually happy to hear from me to confirm the order. In the case of orders with a year or more wait I will see the maker at some knife show or other and mention to them I am on their wait list so they remember me. The makers I have dealt with seem to appreciate this approach and many have commented to that effect.
I have worked with many wonderful makers over the past 15 - 20 years and 90% + of my experiences have been positive
My practice is to ask a knifemaker about when they expect to be able to make the knife and I ask them if it is OK to contact them about a month prior to see if they are still on schedule, they always say yes. When I contact them I ask if they are still on target or for a new date, if not, and again ask if is OK to again check about a month in advance. When it is about a month out the maker is usually happy to hear from me to confirm the order. In the case of orders with a year or more wait I will see the maker at some knife show or other and mention to them I am on their wait list so they remember me. The makers I have dealt with seem to appreciate this approach and many have commented to that effect.
I have worked with many wonderful makers over the past 15 - 20 years and 90% + of my experiences have been positive
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I agree with makers and collectors, no deposits no matter who no matter what. Do not agree to make some piece that is so "special" that when you make it that is not what they want, no one may want it because it is not what you are known to make. The Blade show is your time to make what you want, and offer that work to anyone. You can deliver knives at the show, a shure pay day. I deliver knives at the Blade show to people who are difficult to deliver to by mail. If you take money up front your time has been bought, when you make the knife first you sell your work. Dont put that in a fortune cookie.
Bobby Branton
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This is an interesting thread. We don't take deposits and won't take early payments either. We don't want any funds sent to us until the knife is ready. We worry about the back log of orders enough without having the additional worry of paid deposits added to it. We got into knifemaking because we enjoyed it not because we wanted something else to keep us up at night. We feel like this is a protection for the customer too. In the event that something happens to us the customer only has a little disappointment to deal with not the executor of an estate. Good health and life are a blessing, but are not permanent conditions for anyone.
This thread brings up some other considerations too. It is always interesting to read where a maker can just sell the knife to someone else if the collector that ordered the knife doesn't honor his part of the bargain. There is a cost associated with selling a knife and doing it twice for the same knife, cuts into the profit of the maker. So do you build in an extra cost in all the knives to cover the cost of the ones collectors let you keep? That would be like the cost added to merchandise to cover the loss of shoplifted items in stores. We don't, but we should. Instead we have created a third list in our shop. The first is a list of customers, with orders placed, that may or may not be on the second list. The second is a list of customers that we really like doing business with and the third is a list of people we won't take an order from or sell knives to(It is very short, three at this time). Guess what all it takes to make the third list.
This thread brings up some other considerations too. It is always interesting to read where a maker can just sell the knife to someone else if the collector that ordered the knife doesn't honor his part of the bargain. There is a cost associated with selling a knife and doing it twice for the same knife, cuts into the profit of the maker. So do you build in an extra cost in all the knives to cover the cost of the ones collectors let you keep? That would be like the cost added to merchandise to cover the loss of shoplifted items in stores. We don't, but we should. Instead we have created a third list in our shop. The first is a list of customers, with orders placed, that may or may not be on the second list. The second is a list of customers that we really like doing business with and the third is a list of people we won't take an order from or sell knives to(It is very short, three at this time). Guess what all it takes to make the third list.
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I would tend to take something like $100.00 of "earnest money" up front. It would be fully refundable at almost any time for almost any reason. It is purely there to keep idiots from jerking your chain when they don't even plan to order. It is merely a nuisance deterrent. The money would go into an account that would only be touched if the money was refunded or the knife was delivered. At first sign of schedule problems at the production end I would refund the earnest money so that I was off the hook.
I once had a business producing a newsletter. I had about 600 subscribers and they payed about $50.00 per year for 12 monthly issues, in advance. I also had some people who had paid a "lifetime" registration fee to allow their names to be listed in the newsletter. At a certain point the handwriting was on the wall that I was going to need to go out of business. Since I had been doing accrual accounting I knew how much unearned revenue I had on hand (how many issues I owed people). Rather than give people a bunch of warning and have the business bleed red as it fell apart, one day I just announced we were closing. I sent pro-rated refunds to all the subscribers. It was a little harder to figure out how to handle the "lifetime" members. Using a little experience for the maximum time people ever participated in the publication I set a fixed 10-year value on "lifetime". I then sent pro-rated refunds to all the lifetime members based on what fraction of the 10 years they had consumed.
I consider settling with a total of around 1,000 people to be sort of a worst case situation for a small time business. It still was possible to back out of the situation gracefully and without any complaints that I can remember.
So I wouldn't worry about taking deposits, but I wouldn't consider them mine until I earned them. Even then I would rather have peace than try and get huffy about "my rights". As long as they don't have a big chunk of your property in their possession (like a home renter does) I don't see an abiding need for a deposit. I look on it as a way of stabilizing a transaction and cutting out the riff raff.
I once had a business producing a newsletter. I had about 600 subscribers and they payed about $50.00 per year for 12 monthly issues, in advance. I also had some people who had paid a "lifetime" registration fee to allow their names to be listed in the newsletter. At a certain point the handwriting was on the wall that I was going to need to go out of business. Since I had been doing accrual accounting I knew how much unearned revenue I had on hand (how many issues I owed people). Rather than give people a bunch of warning and have the business bleed red as it fell apart, one day I just announced we were closing. I sent pro-rated refunds to all the subscribers. It was a little harder to figure out how to handle the "lifetime" members. Using a little experience for the maximum time people ever participated in the publication I set a fixed 10-year value on "lifetime". I then sent pro-rated refunds to all the lifetime members based on what fraction of the 10 years they had consumed.
I consider settling with a total of around 1,000 people to be sort of a worst case situation for a small time business. It still was possible to back out of the situation gracefully and without any complaints that I can remember.
So I wouldn't worry about taking deposits, but I wouldn't consider them mine until I earned them. Even then I would rather have peace than try and get huffy about "my rights". As long as they don't have a big chunk of your property in their possession (like a home renter does) I don't see an abiding need for a deposit. I look on it as a way of stabilizing a transaction and cutting out the riff raff.
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I view deposit's as a business style. There are many way's of doing business. Pick the wrong plan for a certain type of business and it is destined to fail. You should structure your business plan without needing it, but it does happen and that should be thought out in advance and stuck to. IE exotic materials, unique design or religious symbology, or just the stubborn customer who insist's on leaving a deposit. If you have a website you should post your policy on deposit's. If you kindly state you don't like deposits because custom knifemaking has so many variables involved that it's impossible to give a 100%accuracy on timelines because of availability of materials, financial crisis, and family issues, etc.. If you want to take it further copy and paste the many horror stories from makers and customers and place there. That should discourage just about anyone, or at least bring a level of understanding to a stubborn customer that it just might change there mind about leaving a deposit. I have been burned as a maker and a customer. I have accidently burned a maker on my orders when I had to move for a job and forgot to give them my new contact information. With wait times of several years it's easy to forget in a move that so and so still has a order from me. It was totally unitentional but it happened. After a time of not being able to get a hold of me they then sold the knife I ordered to someone else and wasn't out any money, but did have to take the time to hold the knife and try and locate me. And if they were gonig to use that money to make the next customers knife I held up that process as well. In this case if I had a deposit I would have had no problem loosing it, as this was completely my fault. I am now much more careful on leaving contact information of my parent who has a much more stable home life than me so in case I am in another country and someone needs to get a hold of me they can. Lesson learned the hard way. I have also laid down a 600 dollar deposits only to see the knifemaker partially go out of business and tell me they filed bankruptcy and such so that was that. Only to see they are still selling knives but no longer take deposits, I'm not sure about orders. I'm still out 600 dollars. So I look at deposit's as a business style that is sometimes but rarely good in this business. If that's your business style to take deposits then I will choose to not do business because it is bad for almost everyone involved at some point in time and occasionally good for the maker. It is sometimes neccesary, so have a rock solid policy before hand and stick to it. Also make sure both parties involved understand it.
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I'm going to deviate from the thought in this thread a little....not to be negative, but to shed some light on the deposit-taking thing.
I require a deposit whenever possible to cover materials. I can't afford to make knives otherwise. *shrug*
I'm not sitting on a $5K nest egg to draw from for supplies, etc.
Also, I want a commitment from the customer.
It's my reputation on the line, not theirs.
Make sense?
Anyway, I haven't really had any issues come up with requiring a deposit.
Of course, I don't make $1000 knives, nor do I use ivory, mammoth...not even that much damascus. And my turnaround time is decent enough to keep money coming in...sometimes even before it rolls out!
Like I said, my position may be a bit different from the rest.
I think good communication is more important in a deal than whether or not the maker requires a deposit. Good communication during the process cuts down a lot on the problems.
Just my 0.02, YMMV
:thumbup::thumbup::thumbup::thumbup::thumbup:
Just my 0.02 as well, YMMV too