Stiffed on a Custom

G L Drew

G L Drew

Knifemaker / Craftsman / Service Provider
Joined
Feb 3, 2005
Messages
4,808
I just had a customer change his mind on a custom knife saying "thank you for making that for me, I really like it but I just bought another knife and am short of funds". I have had too much of this happen recently and some "I'll Take Its" on the Exchange Forum that didn't follow through. Have any of you other makers found an increase in this problem?
 
Since the economy down turn, I think this has become more and more common. I've had several instances over the last year of so where I have taken an order, and when the knife was completed, the client gave me a similar story about not being able to afford it.
A couple of things you can do are: Just prior to starting an order, contact the client and confirm that they still want the knife...you can generally get some indicators as to just how serious they really are. Trust your instincts.
On specific orders I don't think it's out of line to ask for a non-refundable deposit...that tends to drive the point home to some that they have made a commitment to you.
Finally, you may find yourself in a situation where you finish a project, and the client just plain backs out on you. In that situation I "black list" the individual. What that consists of is placing their name on a list...and any future order(s) from that individual requires full payment in advance. That might seem harsh to some, but I have always operated on the "no deposit" rule, but after being "shafted" a few times, you need to find a way to provide yourself a degree of protection.
 
Myself not being in the custom knife business, but in custom millwork, our shop never, ever started any project without a 30%-50% non-refundable deposit being retained. 95% of our clients expected this business procedure since we were making a one of a kind item for them, & most of them usually paid the entire cost up front. Myself, I would have no problem if any custom maker ask for a deposit up front, & like Mr. Caffery said, trust your instincts.
Best wishes & a great business year to all of you in 2011.
Be safe.
 
I had the neighbor (now the useless neighbor) from up the road place an order for 4 steak knives. I spent days in my shop in good weather when I would have rather been outside doing other things as a favor to speed up his order.

I phoned him, and he said he would be over right away....He never came. A few weeks later I told him off in spades and told him I will never have anything to do with him ever again. He's an electrician, I would never let him touch anything in my house, after he had stiffed others with his lousy electrical work.
 
Sorry to hear about people wasting your time (and materials and supplies)... I started taking deposits after over a decade of not doing so and I sleep a lot better now. They could still leave me stuck with a sword or knife I didn't really want to make, but that's rare... they like to stay in touch, too, when they have some cash invested.
 
Since I'm not in the business side of this thing, please accept these questions as honest (if naive).

How big a problem is it to sell a custom knife that you get stiffed on? Let's say you quoted the original customer a price of $495. Your investment was, say, $45 in materials and fuel, and maybe 25 hours of time. The resulting piece was to their specification, but not so outlandishly odd or customized such that nobody else would want it. In other words, no personalized inscriptions, no monograms or embedded pictures of them... nothing like that. Just a fairly simple knife with special handle or maybe some extra detailing.

How tough is it to recover your investment in that piece by selling on the open market?

Finally, let's assume the $495 price is something you charge for special requests (because of the consultation time involved, or just because it deviates from your normal work pattern). Would you be willing to sell (to someone else, not the original requestor) for less, just to recover your costs?

- Greg
 
Ed Caffrey said:
Since the economy down turn, I think this has become more and more common. I've had several instances over the last year of so where I have taken an order, and when the knife was completed, the client gave me a similar story about not being able to afford it.
A couple of things you can do are: Just prior to starting an order, contact the client and confirm that they still want the knife...you can generally get some indicators as to just how serious they really are. Trust your instincts.
On specific orders I don't think it's out of line to ask for a non-refundable deposit...that tends to drive the point home to some that they have made a commitment to you.
Finally, you may find yourself in a situation where you finish a project, and the client just plain backs out on you. In that situation I "black list" the individual. What that consists of is placing their name on a list...and any future order(s) from that individual requires full payment in advance. That might seem harsh to some, but I have always operated on the "no deposit" rule, but after being "shafted" a few times, you need to find a way to provide yourself a degree of protection.
Click to expand...

As a buyer, I have no problem what so ever with what Ed has posted. If it is something custom, I would pretty much expect to be asked for a deposit. If I wasn't, I would probably ask about a deposit again just to be sure. If I couldn't pay for it in the end, I lost my deposit and a good product.

Things do happen. If I was in the place where I couldn't pay for the rest of the product when it was finished, personally, I'd be upfront and tell you what was going on and ask if you could wait an extra week or two for payment. If you wouldn't or couldn't (things happen in your life as well) and you put me on to a "pay in full first" list, I would completely understand. Many people as customers probably wouldn't do something like this, probably would get a little pissy about being asked to pay in full upfront as well.

What your customer did though, that was wrong. He could have called and cancelled the order. I would definitely put him on a pay in full list. Best of luck to you in your sales.

Rob
 
Don't know what your lead or wait time is from initial order to final delivery, but if it's like some makers and in excess of 1 to 1.5 years or more, you have to realize a lot can happen with the economy or folks personal lives in that time. I've never ordered a custom knife, so I don't know the process, so it may be nothing like that. Just throwing out a possibility of why it's happening more so lately than in the past.
 
tryppyr said:
Since I'm not in the business side of this thing, please accept these questions as honest (if naive).

How big a problem is it to sell a custom knife that you get stiffed on? Let's say you quoted the original customer a price of $495. Your investment was, say, $45 in materials and fuel, and maybe 25 hours of time. The resulting piece was to their specification, but not so outlandishly odd or customized such that nobody else would want it. In other words, no personalized inscriptions, no monograms or embedded pictures of them... nothing like that. Just a fairly simple knife with special handle or maybe some extra detailing.

How tough is it to recover your investment in that piece by selling on the open market?

Finally, let's assume the $495 price is something you charge for special requests (because of the consultation time involved, or just because it deviates from your normal work pattern). Would you be willing to sell (to someone else, not the original requestor) for less, just to recover your costs?

- Greg
Click to expand...

I think the big thing with someone flaking on a custom order is that that final sale money was something that was suppose to be money in the bank. I am sure that the knife would sell for the original price to someone else, but that $495 that was expected is now on hold till it sells.
I work on a very tight budget for knife making, I only have what I need on hand at the time, and the money that comes in from the sale of a knife gets turned around to support the next knife or tooling that I find I need to make other knives. I have two Bowies on order right now, the deposits for them when I get them are paying for the VFD for my grinder. I really don't want to be filing two 1/4" think knives again. Both customers know that the knives wont be started till the grinder is finished and I get some time practicing on it and they have no problem with that. The joys of selling to friends:thumbup:
 
tryppyr said:
Since I'm not in the business side of this thing, please accept these questions as honest (if naive).

How big a problem is it to sell a custom knife that you get stiffed on? Let's say you quoted the original customer a price of $495. Your investment was, say, $45 in materials and fuel, and maybe 25 hours of time. The resulting piece was to their specification, but not so outlandishly odd or customized such that nobody else would want it. In other words, no personalized inscriptions, no monograms or embedded pictures of them... nothing like that. Just a fairly simple knife with special handle or maybe some extra detailing.

How tough is it to recover your investment in that piece by selling on the open market?

Finally, let's assume the $495 price is something you charge for special requests (because of the consultation time involved, or just because it deviates from your normal work pattern). Would you be willing to sell (to someone else, not the original requestor) for less, just to recover your costs?

- Greg
Click to expand...

You will most likely recover the money, but you wasted $45 and 25 hours when you could be filling someone else's order.
 
tryppyr said:
... Your investment was, say, $45 in materials and fuel, and maybe 25 hours of time...
Click to expand...

I wish! If those numbers were spot on, it would mean $18/hr... nothing to sneeze at but not retire-early money, either.

I understand you're just trying to get your head around what goes into a custom, but your estimates are on the low side.

Custom orders often involve special materials (that's kind of the point) and a nice piece of stabilized wood can easily run $30 plus shipping.

Time doesn't just mean hours actually at the bench, it also includes emails back and forth, ordering materials, general housekeeping and maintenance... you get the idea.

The short answer to your question is yes, you can generally sell a custom elsewhere if the client backs out. But it's still mighty frustrating and cuts into a profit margin that started out pretty narrow.

tryppyr said:
Would you be willing to sell (to someone else, not the original requestor) for less, just to recover your costs?
Click to expand...

Undercut my own original quote just to dump it? That makes no sense at all. Are you hunting for a bargain? ;)
 
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It seems to me there would be a lot of opportunity costs involved with these failed transactions. Sure, the knife may sell on the exchange or elsewhere but will it sell at the agreed to price, and what other orders were lost or postponed due to time spent? These instances are a shame, and I can't understand why someone who knows they are not going to come through doesn't just let the maker know in advance. Maybe a Hall of Shame needs to be started for customers who back out of orders after a knife is completed.
 
Railrider1920 said:
Things do happen.
Click to expand...

They sure do, and we all understand that. If a client said, "Hey I think I want this but I'm not sure when I'll be able to pay in full" I'd gladly put their order at the end of my schedule and contact them when I'm getting ready to work on it. That seems fair to me.

If it's reasonably close to what I normally make anyway, I may go ahead and make it since I tend to work in batches. My policy is, if you can't pay when the knife is ready, it's up for grabs.

kycolonel said:
Maybe a Hall of Shame needs to be started for customers who back out of orders after a knife is completed.
Click to expand...

That doesn't seem to happen much. Most makers are deathly afraid of seeming bitchy or hard to work with. To be fair, back-outs don't happen all that often either.
 
I've been shafted a few times with some sheathwork. I was a leatherworker before I made knives, and was stuck with a couple of weird holsters and sheaths for obscure guns and knives with names stamped in etc. Most were left handed and had some sort of crazy unorthodox carry option. There's no way someone else in the world has that same setup and name....lol.

Now that I've started making knives as a hobbyist/part time, I don't want to get stuck with something that I can't turn around rather quickly.

So.....my plan is to make about 4 or 5 patterns that I can repeat. I make the knives that I want to make in small batches. I have control over everything. I don't take orders.

Sound bad? Probably. I do take into consideration that my name is going on the knives that I make, and I just don't want my name associated with a knife that has an entire deer antler for a handle, mirror polished file blade with teeth, engraving on the blade "Tyler's first deer", filework, turquoise etc.

Just seems like less headache doing it this way. Make a bunch of what you want, and let it be up for grabs.
 
Another point:
When a customer places and order or does an "I'll Take It" on a sales forum they are entering into a contract with the maker. The buyer and maker are bound, both legally and ethically, to follow through with the purchase. Yes, the economy has been tough the last couple of years and losing a job or getting cut back on hours is completely understandable but a buyer that just changes his mind or blows his knife allowance on something else just doesn't know good ethics. (I promised myself that I would not rant; sorry)
 
Ed Caffrey said:
Since the economy down turn, I think this has become more and more common. I've had several instances over the last year of so where I have taken an order, and when the knife was completed, the client gave me a similar story about not being able to afford it.
A couple of things you can do are: Just prior to starting an order, contact the client and confirm that they still want the knife...you can generally get some indicators as to just how serious they really are. Trust your instincts.
On specific orders I don't think it's out of line to ask for a non-refundable deposit...that tends to drive the point home to some that they have made a commitment to you.
Finally, you may find yourself in a situation where you finish a project, and the client just plain backs out on you. In that situation I "black list" the individual. What that consists of is placing their name on a list...and any future order(s) from that individual requires full payment in advance. That might seem harsh to some, but I have always operated on the "no deposit" rule, but after being "shafted" a few times, you need to find a way to provide yourself a degree of protection.
Click to expand...

Excellent advice and the same that I use. I have a do not make for list.
Scott
 
G L Drew said:
Another point:
When a customer places and order or does an "I'll Take It" on a sales forum they are entering into a contract with the maker. The buyer and maker are bound, both legally and ethically, to follow through with the purchase. Yes, the economy has been tough the last couple of years and losing a job or getting cut back on hours is completely understandable but a buyer that just changes his mind or blows his knife allowance on something else just doesn't know good ethics. (I promised myself that I would not rant; sorry)
Click to expand...

I know that has to be annoying, but there will always be someone else right there to pick up on it when it falls through. It would be different if you made all of these little details specifically for that person and they bailed on you. Who else could you sell it to? I know how that feels.
 
Had half a dozen or more orders vaporize last year. Not a big deal on a $150 knife, but when it's the knives cost more than $750 ... it does hurt.

Now, I always ask for a 50% deposit. No deposit, no work. I don't work for free, plus belts, handle material (stag is $100 these days) and steel cost money.
 
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