Taking Deposits?

bodfish

bodfish

Joined
Apr 1, 2007
Messages
101
I make knives for fun, and for the pleasure of just doing it. I use knives all the time, and they have saved my hide a few times. I don't advertise, and I don't take any orders, usually.

Now, today, a guy walked into my shop area, and said he looked over one of my blades that I had sold to a friend. It was a filet knife, used for the large catfish we have around here. Nothing special, I got $75 for it last year. It was 1095, with a plain jane walnut burl scale handle. No sheath, as I don't like leather work all that much. He had a local craftsman make him one.

Anyway, this guy wants me to make him 5 different knifes, 2 tactical, 2 drop point hunters, and 1 EDC on the Dozier style. He will furnish the desert ironwood for the scales, and I can choose the steel.

He's thinking $200 each knife, and wants to hand me $500 right now. I refuse.
Now, I probably lose money on each knife I make. Plus, I don't need the income. Plus, I don't like to work when I'm not in the mood.

I told him that I'd work up some templates, and call him. I'm thinking that I can make these when I like, and list them somewhere if he takes a hike. BUT, I don't want to get a bad rep, either........AND it's HIS wood.

What would you do?

TIA, as always.
Mike
 
I do not like deposits, either. I have not yet made my first knife, but I have made other products in my shop, and a deposit always seems to put a certain pressure on the whole affair. This detracts from the "pleasure" aspect when you are making products as a hobby or sideline. Might be different if you were doing it for a living on a big order like that. Just my thoughts. 47
 
Right on Mike
I feel the same way. I don't do shows, very little internet,I know enough people that I never seem to have any knives around. The quickest way to get me out of the shop is give me something I have to make.
People ask me why I don't have a web site. The scary thought would be to log on and have orders for 10 knives. I be going fishing.
Enjoy the making
TJ
 
I've only recently started making knives and find this forum very informative but I don't usually have much to contribute. On this topic however, one lesson I've learned is that the quickest way to kill a hobby is to turn it into work. I'd say let this guy know your standpoint, if he still wants you to make the knives, then seal it with a handshake and have fun. Good luck to you and take care.

-Lindey
 
As a hobby it might be okay not to if you know you can recover your time and cost elsewhere. Trust me though, taking deposits keeps the customer interested. Times will come when your hard work is finished and ready for delivery and for some mysterious reason no one seems to have any money now. As a full time maker, I know from experience the electric company does not care if you get paid. They only care if they do. Making two or three or four knives for one customer with no deposit is danger. You have obligated yourself and it is only fair he do the same.

rlinger
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If thats the case Rlinger... theres always someone else out there to snap them up.

I don't seel my knives, since they're just mystery metal KSO's I have fun with. But I've just had one person complement me on the look of one of mine and ask how much they go for. i told him If I make one I consider saleable I'd give him a call and he could look it over and we could settle a price then.

Deposit = business model

Business model = no fun.

no fun = no knives.

no knives = deposit defaulted.

Just my tuppence worth.
 
Well sure from your point of view and I believe my very first sentence sided with your opinion very well. I then compared that to a full time maker situation (one with no other income). There is no conflict between your opinion and mine. Its just that I am now on the other side of the fence. It's different over there.

rlinger
_____
 
Mike..why not get paid for something you like to do anyway?

Your logic seems a little backwards to me and you need to do an "About Face" because you are under estimating your time and worth...

This is simple...Figure out what your costs are for each knife then require a deposit on one knife at a time based on that figure. Complete one knife at a time and request payment in full after the completion/delivery. Then do the same for the next knife. Deposit, completetion,payment in full. If the customer likes the first knife then he will pay for the next one also.

As I stated before your time, materials and talent are worth more than you think...if you make even just one knife for this gentleman get paid for it based on what other like makers are getting paid...not what he thinks the final price should be. Pay yourself fairly but but nicely.

Deposits keep most customers intersted and are non refundable. My deposits are based on cost of materials plus the time to get those materials together and an estimated cost on the wear and tear of tooling material. This usually works out to a required deposit of around 23% to 35% of what I figure the end customer price shall be. Then I get paid for my craftsmanship and design execution on delivery. If I know a client is going to be forced to wait a long time for his piece because I am backed up at the shop I lower the deposit to than 23% or a little more that 1/5th of the total price of the piece. On the other hand if the customer requests alot of special add ons and needs the piece very soon then he pays a premium on the deposit and the final price point.

You will have to work out your own rework and warranty issues and the costs associated with them also...usually small one man shops get killed once in a while in this department.

Talk about all your agreements in verbage then make sure everything is down on paper and signed/dated...this is your contract and the clients...very important anytime money or value is involved to resolve any dispute later on.

Hope this helps...again" 'do not be afraid to pay yourself nicely.

Mike The Money Maker
 
I'm just starting out myself, and I make knives as a hobby I enjoy to unwind from the stresses of work. I've made the firm decision not to have another hobby turn into work (I used to really enjoy what I do for work...not anymore). I just got my first "order" of sorts. Thankfully it's from another craftsperson who gets the hobby thing. I was given an idea of what was wanted as far as pattern goes and told to "do something I think is cool" for the rest. My response was that I would make 2 or 3 and send pictures when they were done. That way I get to enjoy making, the customer gets to have some choice, and it doesn't FEEL like work.

I don't really ever intend to take strict "orders" for my work. I'd like to make what I feel like working on and offer for sale what I make. If somebody likes it and buys it, great. If not, odds are that somebody out there will like it.

I'm hoping this can work for me because it's a hobby that I never expect to make any real money with. If I can break even for materials/tooling I'll be elated. If I had to make my living this way though it would be a different story completely.

I make knives for fun, I don't need another job...

Just my $.02

-d
 
I make knives for fun,too. It has turned out that I can pay for some of that fun by selling some of what I make. I take some orders,and make them at my schedule. I have only taken one deposit. It was on a $3000 sword. I took $1000 deposit. I still haven't been able to get the buyer to pick it up(he travels a lot). Now I'm stuck with the sword and his $1000. Sure ,I can sell the sword to someone else,sure I can default his deposit (or refund it if I can catch up with the fellow), but that would create an unhappy customer. Since the deposit covered the materials, I'm not at a loss, but it is annoying.
Simple lesson learned, I don't take deposits.

Mike the money maker:
I don't know anything about you, but I know about myself and some of the other fellows on this forum. Knife making will never be a profitable business for us. We do it for fun......plain and simple. When it stops being fun, we stop doing it. Figuring P&Ls,time studies, and keeping books will kill the joy fast. You said ,"Pay yourself well for your work." (paraphrased). That has the dreaded word - WORK in it. We do this for FUN. When you start paying yourself ,you become an employee. That means it is a job. I (and most of the other guys) have a good job...and don't want another one. Most of the full time makers will tell you that is was a lot more fun when it wasn't a job.
 
I have to agree with most everyone here. I have only sold a couple dozen or so knives and my feelings might change were I required to do this for a living, but a deposit turns your glorious hobby into a JOB:barf: I already have a good job, now I have another great hobby. I let customers know UPFRONT that I might have this done this month or I might lose interest on this piece fast and you may not recieve it for 3. Either way has to be okay with the customer, or I politely decline. Nothing like pressure and/or deadlines to kill the fun of a hobby.
Enjoy,
Matt Doyle
 
Tanguay Custom Knives said:
To me, taking deposits up front makes me feel like I have unpaid bills. I hate that feeling, so I don't do it anymore.
Click to expand...


I'm very new at knifemaking. But I did sell sheaths for a year. I found that having a list of orders to fill was very stressful. I didn't like it. I plan to make knives and sell what I make. I'm not interested in orders, or deposits. I certainly don't want to have to make something to someone elses specs. My shop time is my creative outlet, and I wanna use it to better my craft in areas that interest me, and where I need the practice. With a full time job, wife and two kids, and a home to maintain, my shop time is very valuable to me. I wanna enjoy that time, and not be stressed out about it. JMHO.
 
I recommend against taking deposits unless the material for the knife is expensive and causes the knife to be less marketable should your original client decide against keeping it.
Accepting material is like accepting a deposit, as it gives the client a financial stake in the knife.....I just did this for a very unique knife and then "injured" the antique tortise shell my client provided. Needless to say, I paid to replace the shell...and that cost comes right off the bottom line. We had already talked price along with a lot else, so my error is my cost. The client has also been very agreeable to work with.
I'd recommend you go it one knife at a time and no deposits. As knifemaking is not your sole source of revenue, and you do it primarily for the fun of it, keep the pressure minimized. talk timeframes one at a time Keep as much fun and as little stress involved as possible.... I'd even consider your purchasing the ironwood so that even that isn't percieved as a "deposit".
And give yourself plenty of time to complete each knife....Your potential client knows this is a fun craft to you and would/should understand you want to keep it that way. And about 99.99% of knife collectors are really nice foks who will work with you to make it a win-win for both of you.
One more bit of advice, communicate with your client, good news or bad....that is easy to say and if it is bad news it is almost always harder for you to say than it is for your client to accept.
 
I second all the reasons stated previously for not taking deposits PLUS...

A contractor and I was having a conversation about taking deposits for work and he said he doesn't take deposits because, "If contractor doesn't have the funds available to do a project then he shouldn't be in business". This can apply to knifemaking as well.

My approach to keep knifemaking interesting and enjoyable for me is to not take deposits but accept ideas for projects I might do in the future. If I take on an individuals project, I will communicate with them when I am finished and see if they still want it. If they don't want it, I may find someone else that does but it's not a big deal if I don't. There is enough pressure in life that we don't need to add more needlessly.
 
if you haven't already, have a look at the GB&U to see where taking deposits can lead if you don't deliver on promised dates.
 
This subject is a very important topic in the business of making a living at making knives. If making knives is a hobby and mostly a source of pleasure and a little extra money then taking a deposit is no big deal either way. As long as you do what you say you will do within a reasonable amount of time from when you take the order. I know of a couple of makers that have taken huge deposits on expensive knives and not delivered. They make business hard for all of us because they build mistrust.

I have been in the knife business since the late 70's and Karen and I have survived with no other source of income since 1988. We have tried a lot of different things regarding deposits and for now this is what works best for us.

I have a calendar and on this calendar I schedule time to prepare for shows, “available now” pieces for my web site and schedule custom orders. As soon as I decide to do a show time is blocked out to make the dollar volume I would like to have at the show. I schedule about 2 pieces a month for sale for my web site. I schedule any special projects such as my Orvis Limited Editions and the rest of the calendar is for custom orders. I do custom orders as they come in with a few exceptions such as active duty military.

With new customers I request a 25% deposit to schedule an order. This weeds out non-serious people. When trying to make a living it can be tough to work a week on a project then receive no income for the work because someone “kinda lost interest and picked up a real nice knife stamped “Genuine Bowie”. Yes, you can always sell it to someone else but bills wont wait for a week while you find a new buyer. I also accept MasterCard, VISA and checks. The waiting period from the deposit to actually building the knife will expose most credit card fraud or bad checks.

With existing customers I only charge a deposit if there are expensive materials involved or a very specific design that might be hard to sell to my general customer base.

With all this deposit and selling stuff it is crucial to keep good records. Customer relations is very important and a topic for detailed discussion all by itself.

Daniel

http://www.winklerknives.com
 
I think you should take a deposit at least once for the experience of doing it. It adds a whole new wrinkle to the process.
 
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