Deposits on Custom Knife Orders

[Tactical-Steel]

Hi I'm new on this forum but I'll give my .02 on this one. I see nothing wrong in asking 1/2 deposit down on anything that is a custom knife. Now if a maker has a trademark series of knives he is known for then I have a bit of a problem with asking for a 1/2 down deposit on those knives. On those types of knives I think it would be a good deal for makers to ask for a 10-20% deposit. If the buyer comes up on hard financial times and can't afford the knife anymore the maker keeps the deposit. No hard feelings.

Deposits are nothing more than a good faith agreement that enable a craftsman to gather the materials to do the job without dipping into his personal funds.

In my world, there's no discounts and no friends when doing business. The only thime I've ever been burned in business was when I was doing something for a friend... Live and learn.

[Jerry Oksman]

I see many views being expressed here, but it all still seems to come down to one thing - communication. If you know up front what the story is, then you both buyer and seller have an understanding of what is going on.

I can understand why a knifemaker would want a deposit on a special order knife. If the materials are costly (mammoth, ivories etc.) or if the knife design is far from the norm for that maker or just plain wild. On a standard model using standard material I see no reason for a deposit.

I understand the concept that a deposit is a sign of your seriousness when it comes to buying a knifemakers craft. It's an assurance to the maker that you the buyer are not wasting his/her time. On the other hand I don't feel that a maker is justified in asking for more money than originally asked for. Even if he was upfront about the fact that he is a better maker 1, 2 or 3 years later. Well 2 years later I would hope that you are better at your craft. I certainly hope that I am better as an engineer a year from now. I will have learned more and experienced more and hopefully gotten better in my field. Can I make a contract to do a project and then tell them well it's going to cost more now, I'm a better engineer. Quite frankly I would never have been hired in the first place if I had the nerve to actually say that. There is no field of endevour where you can tell people "well I'll be better next year and that's when I'll get to you so it will cost more than now". Of course that's the case every day you leasrn more and perhaps get better at what you do. But how does the collector know that your any better? Unless the buyer has an old knife to compare your new knife. Just bump your price up front if you feel that justified about it and stick to it. Don't play these games. Quite honestly If, the maker accepts a deposit and then changes the price, I believe the maker is in breach of contract. That would be my case in my business.

Most knifemakers I've worked with usually do not ask for a deposit. They usually ask for the full payment sometime within the last 2 weeks of when they think they will finish the knife. That way when you send a check it can clear and the knife be finished at the same time. Then they just ship it. Have I given deposits, yes for costly materials and in some cases when starting with a new maker. Repeat biz with the same maker usually means I need not give a deposit.

sorry for the rant.

[cactusforge]

Jerry, I share your opinion on raising the price. What has not been mention in this thread is honesty, you mentioned that a deposit indicates that the customer is serious about the purchase.
After a knife maker has had a number of byers back out without even a call or email saying thy don't want the knife and won't answer the phone or reply to emails. This is one reason for deposits. You have to remember that a knife byers can and will find out all he can about me, I can't do this about him, I have a lot of trust in my fellow man, but after a while enough is enough.
I am a knife maker that is known (I have a web site) but not to the point that if I build a knife for some one and thy don't take it I will have no trouble selling it, it may take a while.
I sometimes think that all knife byers that respond to these threads believe that all other byers are as good as there word as thy are.
Hope this makes sense. Gib

[Jerry Oksman]

GIb,

I do understand where your coming from. I agree as well. I think that when you are dealing with unknowns you try to make sure that they are serious. I think that it makes sense to ask for deposits from someone if you have never had dealings with them. However, if the knife is a standard model you make, not something special or out of the ordinary. I don't think you should ask for one.

I have also been told by various makers that they do not want any deposit at all, for the reason stated before by Jerry Fisk, they maker feels as if they are making the knife for nothing. That's not really true, but it feels that way as the money has already been spent.

[cactusforge]

Jerry,
Thanks for your understanding. I only take a deposit from people that I don't know and even then last summer I made a sale to customer that had a string of Gift Shops that specialized in my style of product (Indian, Old West, Buckskin and such) the man bought every knife that I had at a good price, then ordered 5 more Bowie's and when thy were done he refused to take the order. this is what I bothers me. I finley sold the knives at a better price but it took 8 months. If I were a well known maker that had a 6 to 12 months waiting list I wouldn't take deposits they are too much trouble. Gib

[J.R. Fraps]

"If I were a well known maker that had a 6 to 12 months waiting list I wouldn't take deposits they are too much trouble."

I think Gib said it for many of us makers who aren't to that point yet in our knifemaking careers.
I am fortunate enough to have a customer who just ordred his 3rd knife from me in the last 4-6 months. I don't want a deposit from him. As a matter of fact, good business or not, I don't want a check until he sees and handles the knife I made for him. He is then free to send the knife back for any reason he may have, or he can send me a check...the check last time was mailed the day he received the knife.
I would like to believe that is the way every maker and customer could do business. Am I a little bit idealistic....maybe. Could I get burned...sure, but haven't yet. Thank Goodness. It sure makes the whole experience more fun.

As for the exposure to folks you don't know at all, and/or who might not know you, working with a couple of top representatives like BladeGallery.com and Custom Knife Gallery of Colorado has been a great experience for me. Their fees are definitely worth the cost, and they handle all the financial arrangements of the sale, so whether or not to take a deposit is not a concern for the maker.

Peace After Justice,

[whv]

bottom line for me as a newbie - put out a list, either on the net, in a catalog, or whatever means of conveyance, a 'standard line'. by the same means, let it be known that you will / or will not be ameanable to accepting custom orders at the same specs, cost +, with the cost + paid upfront. no specified time of delivery unless a person is willing to pay for the priviledge.
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a couple of years ago, i found a new maker on the net. a year later, les r was touting him on his own site, mentioned the name here and in several other forums. the fellow showed up on even more forums touting his wares, with the idea of taking orders. he was even written up in the rags. pissmeoff!! i have wood with him for handles, orders for two knives, any # of emails going on, promises that my stuff will be next out of the shop, BULL####
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as all of ckd members continue to tout ---- be honest, up front, or get out of here!!!!!!!!!!!!!!!!!!!!!!!

[Terry Primos]

Hey Wayne, don't hold back. Tell us how you really feel.

###

I don't take full payments or deposits up front. For me it 's the same thing that has been mentioned before -- it almost feels like you're making the knife for nothing when you get down to that one on the list. It's strictly a psychological thing, but it's there none-the-less.

It's just a lot more pleasurable making one knowing that when you're finished, there's going to be some money coming in. You can dream about all the neat things you can do with the money when it comes in. The dreams are always shattered by reality, but it's still fun to pretend that you're going to get to spend the money on something fun.

Now contrast that with working on one that was already paid for. You're working just as hard, but there's nothing to look forward to. The money was already spent -- and not on anything fun either. It went on that new alternator for your wife's car, and to the plumber for that danged leaking toilet that was so old, they don't even make replacement parts for it anymore.

Big difference.

In one case you're thinking, "Oh boy, I get to make this one now".

In the other case you're thinking, "Oh boy, I've got to make this one now".

Now I have had a couple of return customers who just begged me to let them pay up front for their next knife so that they wouldn't have to worry about spending the money. I have reluctantly accepted the payment up front just because they were good customers and I wanted to make them happy. It sure does take the fun out of it though.

One thing in my favor is that I have a standard line of proven designs. I don't do the "my design or your's" thing. When a customer wants something that is not within the parameters of what I do, I offer to help them find someone who does what they want, but I won't take the order myself.

I won't take any way out orders either, like a handle wrapped with a pachyderm's cod sack, or a baboon's butt cheeks. So if the deal falls through, I've got something that will sell anyway.

[bilestoad]

Originally posted by Terry Primos


I won't take any way out orders either, like a handle wrapped with a pachyderm's cod sack, or a baboon's butt cheeks.

Wouldn't either one of those make the handle a little slippery?

[cactusforge]

Right on Wayne, well said. There are a lot of politics in this business that hurt small makers. We also need to think about cash flow this enters into this subject more than a lot of people think. Gib

[JimmySeymour]

well from now on I am only going to order from people that have built a reputation for customer relationship, and good business practice. I don't buy knives for resale, only for what i like. I'll just have to add that to the criteria for knives I buy. I just bought a knife from Dusty Moulton. About every 3 weeks I got an update on the status of the knife. I will have no problem ever ordering from him again. Or paying a deposit for something outlandish that i don't need, or just for his aggrevasion in trying to make it. But will only do that for now on with makers I have ordered from before and have good business and customer relation skills.

[Les Robertson]

Hi Wayne,

Since you brought my name into it. This is a perfect example of why you don't give a maker a deposit. I have a pretty good idea of who you are talking about.
He still owes me knives from 18 months ago. However, Im not sweating it because I didn't give him a deposit.

Hi Gib,

I think you might be misusing the word "political" in this case.

When I was first starting out as a custom knife dealer, I too had a tough time. The makers wouldn't sell me knives or if they did it was with very little discount.

The reason was not politiics, it was business. I was no body in custom knives. I didn't have an advertising budget, I only set up at the small NKCA Shows ($25 a table) which were primarily factory knife shows. I probably didn't cover expenses for 4 years. I didn't even have a catalog to start, just a price list.....one page.

What I did was sit down and do a basic SWOT (Strength's, Weakness's, Opportunities and Threat's) assessment. At the time I didn't know it was it's name.

By doing this with my direct competitors. I found out what I needed to do to be more successful. None of it was based on politics. It was all based on good sound business sense and techniques.

Gib, it's not easy. It takes a lot of time and effort to come up with a good business/marketing plan. Even this may not be enough. SBA says 80% of all small business' will fail in the first 3-5 years. Usually from the owner's inability to effectively execute their business plan. Also, the lack of flexibility to modify the plan as circumstances warrents.

So don't blame politics, like most of us starting out in any business. What your feeling is growning pains. In corporations all over the world, right now people are trying to figue out what to do to improve our business.

Don't get me wrong, I understand the political issues when it comes to knife makers. I have been to more than my share of business meetings at the Guild Show!

Gib, you already know the process, as does every maker on this forum.

Where your at....where you want to go and how you get there.

Oh, and if you do want to get in the Magazines....advertising dollars sure to go a long way to making that happen.

Remember, just like you the magazines are a business. They too have to keep the cash flow....flowing. No politics there, just good old fashioned capitalism!

[cactusforge]

Les,
Don't tell me it isn't politics when you go to the first show you have ever been to and see the first hand made/custom knife for the first time and you ask a Purveyor if he will help sell your knives and he tells you that he only sells knives from well known makers and that I am not well known. And you receive a very cool welcome at that show. Check out

http://www.ckdforums.com/showthread....6&pagenumber=3

Les I think that this is more wide spread than we would like to admit.
As far advertising is concerned I thought that the magazines were there to promote the business/ hobby.
Gib

[Les Robertson]

Hi Gib,

I think you are confusing politics with business.

There are only about 10 nationally known custom knife dealers. More than likely they have spent millions of dollars developing their business. Most have developed their own business guidelines. So if this dealer has determined that he will only work with established makers. Then that is his perogative. Gib, thats not politics, that is business.

For my part I base my purchase decisions primarily on "quality for the money". The name is inconsequential to me. As many of the world class knife makers I work with today were not well known when I bought my first knife from them.

How often to you look at and change your formal, in wiriting, business plan? I change mine every 4-6 months. About a year ago as I saw that the economy was slowing. I made the decsion to start reducing my standing inventory. Changing to more of a "just in time" inventory. In other words I set a goal of pre-selling 60% of all new knives I had coming in. What this did was free up captial to take advantage of knives being sold by collectors.

I understood that for 2003 it would be more important to be "liquid" than to have standing inventory. This strategy has paid big dividends. I currently have a smaller inventory than I have had in over 10 years. While this past March was the best March (for sales) I have had since I started my business.

April has been excellent as well. During this year I have stopped working with one maker, started working with two new makers as well as expanded product lines with 4 makers who I have worked with over the last 4 years.

This expansion and contraction is based on market conditions and client input. There are no politics involved here.

Gib, I'll grant you that there may be politics and favoritism involved in custom knives. The key is to remove yourself from it.

Each business must find it's own niche.
You want to be successful and remove politics and perceived favoritism. Then create a style of knives that the world craves. Spend the money, time and resources to create a marketing plan that will help the world beat a path to your doorstep.

It's not easy, but you will find the harder you work...the luckier you get.

[whv]

ok guys, pardon my vent. i just get sick of hearing about those who are less than trustworthy in this business which, by most accounts, is one of the more honest businesses around. that goes for makers and customers.
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les - i hope that you did not take the mention as an affront - it came to mind because you had your name on the recommendation published in Blade. it just goes to show that even the experts can take one in the shorts sometimes.
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terry - send me a quote on some baboon buttcheek - that aught to make for a really colorful sheath . i can't find it in the weaver catalog!
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thanx