A different side of life in the workshop

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old_picker
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A different side of life in the workshop

Post by old_picker » Tue Feb 14, 2017 3:48 pm

Recently I built to order a very specialised and expensive instrument. A 33% deposit was lodged and parts etc were ordered and work begun. Obviously this was a mans dream that was to be finally brought into the real world. The kind of instrument that cost way more than it would sell for in the open market place and built exactly to his vision. A vision unfortunately that, in my experience, would be shared be many or should I say any.

It was completed a little out of the estimated time frame with all of the boxes in the spec and accessories ticked. By this time the deposit was well gone and more on hardware and timbers to say little of the time spent. I put a lot of effort into setting it up properly and done a very good job of it. On the day of completion he was notified and sent a series of high definition photos which he responded to very enthusiastically in words but not with money :(

A couple of weeks later a payment was received which brought down the balance due to half the invoiced cost. From then, some 6 weeks ago, I have heard nothing more. My patience is running thin about now and I need to start taking some action to bring this to a close.

What I'd like to do is sell the instrument off on the open market and I realise that in worst case scenario thats what will happen. I seriously doubt that course will cover the the deposit let alone my costs as well. I realise it is my error that I built such an outlandish creation and in hindsight should have asked for the full cost up front . It was done in good faith that it would be paid for as all of my projects have been in the past. Many of them purely on the strength of a series of photos and my reputation.

I am a bit unsure as to what course[s] of action are open to me and if any one has any ideas or first hand experiences it would be great to hear them.

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peter.coombe
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Re: A different side of life in the workshop

Post by peter.coombe » Tue Feb 14, 2017 6:20 pm

Mmm, my experience is if there is money involved you need to wait. Patience is required, although 6 weeks is getting a bit long, but then I have had to wait for longer periods. Have you contacted the customer? Please don't put the instrument on the open market without contacting the customer and explaining the situation - i.e. you want to be paid! If not paid in full by a certain date then it goes on to the open market. The customer will probably ask for a longer period, so you either swallow and gulp a few times and give him extra time or pull the plug. If it goes on the open market, give the customer a refund minus the deposit if your deposit in non refundable. I have a non refundable deposit to discourage this sort of behaviour and it has worked some times - i.e. they pay up after realising they are about to loose the deposit. Good luck.
Peter Coombe - mandolin, mandola and guitar maker
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Crafty Fox
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Re: A different side of life in the workshop

Post by Crafty Fox » Tue Feb 14, 2017 6:33 pm

Probably worth checking your legal obligations before putting it up for sale.
I hope you have a friendly, ie FREE, lawyer mate. You'd only need a few minutes of their time.
Ken

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Steve.Toscano
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Re: A different side of life in the workshop

Post by Steve.Toscano » Tue Feb 14, 2017 7:48 pm

6 weeks really isnt that long, especially at this time of the year (7 weeks ago was christmas).
My suggestion is call the customer, if they're having financial difficulties - which might be the case - and are often embarrassed to say that. Offer them to pay you in small regular amounts eg. $100 week until they can pay the remaining lump sum whats oweing.

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kiwigeo
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Re: A different side of life in the workshop

Post by kiwigeo » Tue Feb 14, 2017 8:11 pm

peter.coombe wrote:Mmm, my experience is if there is money involved you need to wait. Patience is required, although 6 weeks is getting a bit long, but then I have had to wait for longer periods. Have you contacted the customer? Please don't put the instrument on the open market without contacting the customer and explaining the situation - i.e. you want to be paid! If not paid in full by a certain date then it goes on to the open market. The customer will probably ask for a longer period, so you either swallow and gulp a few times and give him extra time or pull the plug. If it goes on the open market, give the customer a refund minus the deposit if your deposit in non refundable. I have a non refundable deposit to discourage this sort of behaviour and it has worked some times - i.e. they pay up after realising they are about to loose the deposit. Good luck.
I'm with Peter on this one.....it sounds like he's been in the situation you're in.
Martin

blackalex1952
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Re: A different side of life in the workshop

Post by blackalex1952 » Tue Feb 14, 2017 8:42 pm

Wonderful that it sometimes is to get a commission job, it has a few downsides, one of which you are experiencing. I know professional builders who after many years, only build 'on spec', ie. they make what they want to, put a price on the finished article depending on how it turns out then offer it to whoever will pay up front. Transaction over and clean. The other way, it's not easy working to a time frame and having to constantly negotiate with each custom build client. For the incredible profiteering that most luthiers can achieve :roll: it's just not worth the stress to some! Ross
"Everything I say on the topic is based solely upon inexperience and assumption!"

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ozwood
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Re: A different side of life in the workshop

Post by ozwood » Tue Feb 14, 2017 10:56 pm

Just wait it out, he's paid a fair chunk and does not want to say goodbye to that any more than you want to sell it for less.

Shit just happens sometimes, it's frustrating, but really you don't have much to gain by selling it cheap.

I have a repair that's been ready since Nov, owes me $500 , I'll just wait it out, have in the past it's the best way.

Cheers,

Ozwood.
Paul .

Craig Bumgarner
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Re: A different side of life in the workshop

Post by Craig Bumgarner » Wed Feb 15, 2017 3:13 am

I don't have much to add but would agree with waiting it out. Contacting the buyer directly and putting cards on the table is worth doing. Sounds like buyer is just strapped at the moment. Work out payment plan, set goals, make reasonable commitments. He's probably just as worried about all this as you are.

Most of mine are commissions and I "think" I enjoy it, but every now and then there is one the makes me wonder. I've had buyers cancel orders part of the way through because some bright shiny object crossed their path. I try to be gracious about it, but now take a $500 non-refundable deposit when I start the project assuming it is a guitar I can sell in the open market place if the order is cancelled while under construction.

If the order is something unusual that I'm either not real enthusiastic about or may not be able to sell, I ask for full payment up front, not refundable. That may seem harsh, and it has killed the deal more than once, but I figure I'm probably better off.

Building on "spec only" has it's attraction, but 90% of my commissions seem to lead to some social interaction, fellowship and a broadening community of players. The 10% that are difficult is just part of living in the world. If I sold on spec only, I bet I'd still have that 10% knocking on my door.
Craig Bumgarner

Bumgarner Guitar Blog

old_picker
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Re: A different side of life in the workshop

Post by old_picker » Wed Feb 15, 2017 8:27 am

I appreciate the time you have all taken to respond to my question and thanks for your excellent advice which I'll now follow.up on.
cheers to all

Ormsby Guitars
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Re: A different side of life in the workshop

Post by Ormsby Guitars » Wed Feb 15, 2017 8:29 am

You just have to ride this one out.

We waited nine months for one guy, and 12 for another, to pay off their guitars. But we can ride that out. It's just damn annoying.

The lower the deposit amount, the more payment issues you'll get. You have to juggle that percentage based on either getting more orders that can be problems, or less orders and lower chance of payment default.

So what do we do when a client passes away mid build?

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kiwigeo
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Re: A different side of life in the workshop

Post by kiwigeo » Wed Feb 15, 2017 9:51 am

Ormsby Guitars wrote:
So what do we do when a client passes away mid build?
Turn up at the funeral with a chainsaw and chop the casket up to use as tonewood??? :mrgreen:
Martin

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demonx
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Re: A different side of life in the workshop

Post by demonx » Wed Feb 15, 2017 6:32 pm

As everyone else has said, you have to contact them, be human and understanding, politely ask them to make regular payments.

Sometimes people's situations change. That's life. During the queue progression time I've had people loose their jobs, marriage breakups, I even had one guy tell me he had become homeless, BUT, I gave him grace as he said he really wanted the guitar and he made payments and finally got there in the end. So situations change. You just need to talk to the person.

I even had one guy once just "disappear" after paying a 50% deposit. I had two forms of contact for him, both un contactable and I tried for months. Phone disconnected. No email responses. Dropped off the face of the earth and still to this day about five or six years later never heard a word. I now take four forms of contact, home address, email, phone and a social media contact so this never happens again.

In my workshop at the moment I have around twenty guitars at various stages of completion. Some just starting, some are sanded and ready for paint and some awaiting assembly. A couple are waiting collection after final payment.

Out of all those guitars, all of them have paid a minimum deposit which is non refundable. The higher the initial deposit, the easier it is for them to pay off the guitar and the more commitment you'll get.

Some of those guitars are paid in full, some are making regular payments and some I have to send a polite message to every now and then to kick start them.

For years I have been working on a $100.00 "pre" deposit system to get customers in the door. It worked really well when I was building part time and only around 15-25 guitars a year depending on the year.

Now that I'm full time and building around 50 a year I have a lot more customer service traffic and the $100.00 system is not enough real commitment, all of a sudden I was getting too many people pull out as my wait times were a lot longer and people had too long to think and see other things they wanted, like tattoos or a new car, or get the girlfriend knocked up. Over the last year I had fifteen people pull out due to the low deposit and lack of commitment. At a 4K average that's 60k (potential) loss and a lot of people I'd spent hours of customer service time on. So I had to change my ordering process.

I now have a $1000.00 non refundable deposit. I have not had anyone back out with the new system. I admit I am getting a lot less orders now, however the orders I am getting are real and not time waters filling spots that real customers could be in and it's a more secure business model.

Anyway, just send your guy a message. I'm sure it's something simple.

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lamanoditrento
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Re: A different side of life in the workshop

Post by lamanoditrento » Thu Feb 16, 2017 4:37 pm

old_picker wrote:I am a bit unsure as to what course[s] of action are open to me and if any one has any ideas or first hand experiences it would be great to hear them.
What action you can take really depends on what terms of your contract were. If you did not have formal terms specified in writing, then all your correspondence, conversations will formulate the terms of the contract. If this was manly done by in telephone conversations, then evidencing the terms becomes a little messy. If no terms such as late payment, non payment etc were discussed then you will have nothing solid to rely on but you still have options.

You could litigate for the balance of money for breach of contract (this could be in a self represented consumer/trader jurisdiction such as VCAT/QCAT/CTTT etc, which have low cost). Minor civil debts a pretty easy process to obtain a judgment but enforcing these are a different story. You can however lodge a judgment on someones credit rating (some states autolodge this information).

You can try and sell the instrument to recoup your costs but to ensure you either don't find yourself on the other end of some consumer litigation seeking a refund or if you do, that you are successful in defending it, you should:

Send a demand specifying the amount and providing a reasonable due date;
Give warning that if the amount remains unpaid that you intend to sell the instrument lieu of the balance;
Make and document genuine attempts to market the instrument at full price (i.e. ads in appropriate publications);
If unable to sell it, make and document your attempts to market the instrument at a reduced amount; or
Obtain a independent valuation and market it at this price.

In the event that you obtain a profit over and above the original agreed amount, you will need to refund the excess less any costs (ad buy, appraisal etc).
Trent

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TallDad71
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Re: A different side of life in the workshop

Post by TallDad71 » Fri Feb 17, 2017 6:40 pm

All businesses have bad debtors. Eventually you will learn to factor them in as a cost of your business.

The difficulty with your situation is that it represents a sizeable portion of your working year and the hit is large.

I would advocate patience. Even if he doesn't buy it in the end you still have two assets. A beautiful guitar and a lesson in how to do business, each of which will shape how you go on being a luthier.

Best of luck.
Alan

simso
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Re: A different side of life in the workshop

Post by simso » Fri Feb 17, 2017 8:27 pm

Joys of business.

At least because it's a custom made guitar you don't have to sell it off at auction or at a loss.

Down turn of mines has really crushed the flow of money.

Send him an email giving him an opt out option for a price so you can onsell the guitar.

Steve
Steve
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Do your own repairs - http://www.mirwa.com.au/How_to_Series.html

simso
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Re: A different side of life in the workshop

Post by simso » Fri Feb 17, 2017 8:29 pm

And never ever ever let them take the instrument withouy paying the full balance outright, regardless of how nice they may be.

Been burnt that way before as well to the tune of a 1000 dollars

Steve
Steve
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Do your own repairs - http://www.mirwa.com.au/How_to_Series.html

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peter.coombe
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Re: A different side of life in the workshop

Post by peter.coombe » Sat Feb 18, 2017 9:53 am

And never ever ever let them take the instrument withouy paying the full balance outright, regardless of how nice they may be.
Yes, it is the only way to protect yourself from ripoff. Also never ever send the instrument before the funds have been cleared and are in your bank account. I have had a few customers say they would transfer the money today, could you send the instrument now, only to find the money never arrive "today", and had still not arrived a week later nor a month later. Apparently their finances were "worse" than they thought (likely story!).

I have been in this situation many times. Usually the customer takes a week or so to organise the finance, but sometimes it can take a lot longer. Not good when you have the credit card to pay off because you just bought a bunch of tuners or wood. The longest I have waited was around 6 months, and I have had one customer cancel and ask for a full refund when the instruments were packed up and ready to send (he ordered 2 instruments). I told him it was a bit rich to do that at the last minute, and he had just lost his deposit. The loss of a deposit changed his mind. I don't like progress payments, but sometimes you have to accept that because some people don't seem to be able to manage their finances properly. When it looks like you have to wait (yet again), sigh and stick the instrument under the bed and forget about it until it gets paid off. Patience nearly always pays off in the end. In this case the customer has paid off half the guitar so has a fair bit of skin in the game and if it was me I would not be too concerned, but would seek some estimate from the customer about how long he was likely to take to pay the rest off.

Another point. Don't ever accept a free commission or a reduced price in exchange for promotion of your instruments during performances or on CDs. It might happen, or it might not, but it seldom if ever results in additional sales. Some people are just fishing for a cheap instrument. A prominent musician who pays full price is the best advertisement you can have.

Peter
Peter Coombe - mandolin, mandola and guitar maker
http://www.petercoombe.com

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