Deposits on Custom Knife Orders

[Les Robertson]

Hi John,

I didn't know we weren't on fair terms.

I know my comments about no more than a 25% discount is not embraced by a lot of makers.

I have also stated that if a customer is ordering something unique or requesting certain materials to be used. They should expect to pay for those up front.

Also, if they are buying a very very unique knife (as in no one else in the world would want this knife). They can expect to pay full price

Makers who take deposits need to understand that they have entered into a contract. If in that contract you do not meet the expected delivery date. The customer by law has the right to ask for their money back.

For those of you who do take deposits you might want to check with the local DA or better business bureau to find out exactly what your rights are when you take a deposit. Probably best to talk with an attorney.

If you take a credit card for the deposit and do not deliver on time. The collector can contact their credit card company, file a complaint. They will include a copy of your order form (contract) point out the expected delivery date. CC Company looks at that. You took the money and did not meet your end of the contract, the money is removed from your account that day in the form of a charge back. You of course have 10 days to appeal this. By the way as of 2003 most merchant accounts now charge between $20 and $30 for a charge back.

One of the "Long" lessons I have learned over the last 18 years. Was to give as few deposits as possible. As John pointed out, there are some makers who do have secretaries or book keepers (usually it's the wife who has a spread sheet program on the computer). Oddly enough, most of these makers do not require a deposit. As they are very aware of their workload and give out a fairly accurate delivery times.

These are not the makers I worry about. It is the ones who are not disciplined enough to stick to their schedule. I have lost track with how many makers I stopped doing business with over the years who could not deliver a knife on time to save their life.

Apparently, I wasn't the only one they were doing this too. Most of these makers are now footnotes in custom knife history.

You can only screw so many customers before it comes back to hurt you. Now with the internet, you are no longer afforded years in the business before your reputation catches up with you.

I once had a maker deliver a knife 2 months late with no valid explanation. So I took 2 months to pay him, with no valid explanation. Oddly enough while he saw no problem delivering the knife (which had a 50% deposit) two months late. He took great exception to the fact I was 2 months late in paying the balance.

This is why in my book and the seminars I do. I always recommend to the collectors to ask for the "real" delivery time. Not the one that many makes give you so you'll order the knife. As they figure once you have waited 6 months you won't mind waiting another 3-4 months to get the knife.

I also recommend they get the delivery time in writing. In case there is a problem down the road. As the Knifemakers Guild and the ABS love to see copies of original paperwork. Like the order form and the cancelled deposit check.

My experience has been makers who use a 50 - 100% deposit are generally setting themselves up for failure. Unless they are putting the money in some kind of escrow type account.

For most of us it's easy to live on 150% - 200% of our yearly salary. However, as the delivery times get drug out to years instead of months. You find you have already spent the money you received for the next knife you are going to work on. You now understand that for the entire time you work on the next knife....you will receive no new income from that knife. But the bills still keep coming.

Also, what happens if you get hurt and cannot make knives anymore. Are you going to be in a position to send back thousands, possibly 10's of thousands of dollars worth of knives.

What happens if you die? Are you records such that it shows exactly who paid what deposit? Or are you going to leave that for your family to sort out.

Yes, I am playing the devil's advocate here. However, I know makers who these things have happened too.

Ultimately, it is your business to run as you see fit. As long as your customers are happy and you are making a profit, you have a good business model.

[J.Arthur Loose]

Les,

I wasn't sure *what* you thought of me after the infamous Mokume thread, but I thought it was nice of you to stop by and say hello at the NYCK Show.

I wish I could find the article that originally got me thinking about this... your response above certainly clarifies what I remember about it in a very positive manner. Perhaps the article ( as these things do ) left out some of the details you have mentioned above.

One thing about being behind that has happened to me is when a labor-intensive blade fails at the last minute... such as a crack or bad warp in the quench. This can put a maker way behind schedule not only with that blade, but with others. Or an injury... I just went to the hospital yesterday to have them slice up an infected finger looking for a toothpick sized splinter that broke off and got lost in there... I should be forging again by tomorrow, but I lost several precious days.

So I try to stick to schedules but things do happen... I try to let people know what is going on but some people slip through the cracks and they get to me before I get to them. I've started adding a couple months to what I really think it should take me.

Not to complain, because I love what I do, but I hope that folks can remember that the life of the self employed is already difficult, nevermind the self employed knifemaker!

The funny thing is that I do want to move toward smaller deposits, closer to your 25% suggestion... but I need to find some way to insure that I've covered some of my initial labor expenses as I've had a couple big commissions back out after starting work.

[GANNMADE]

I THINK BOB WARNER STILL HAS THE BEST IDEAL HERE.
IT IS FAIR FOR BOTH PARTIES. ALOT OF POSSIBLE BUYERS
ARE IMPULSE BUYERS. THEY WOULD LOVE TO BUY A KNIFE
AND MAYBE EVEN PUT DOWN A DEPOSIT. BUT THINGS MAY
NOT GO THEIR WAY AFTER ORDERING A KNIFE SUCH AS THE WIFE

[SMAT]

I prefer to pay for the knives I order at the time of ordering. Not to push the delivery date forward or try and jump the line a couple of places. I do it so that when the knife arrives, however long it takes, it's all paid for and I don't have to worry about finding the funds. I only order knives when I have the money to buy them. If I put down a deposit, I don't know whats coming round the corner, and I'd rather avoid the embarrasing phone call to the maker explaining that my car needs new shocks, so I don't want the knife. But hey, thats just me.

[whv]

mr smat - welcome to the ckdforum.com
-and to the rest who have been watching this thread -
.
i think that the most important feature of this forum is that you may have direct contact with the ERIC, the fellow that owns & operates this CKD!
.
several makers, and several collectors have expressed opinions - we have heard from the pro - LES -
.
we have heard from some $$$$ collectors, some $$$ makers, some non-descripts
.
what is the bottom line ?????????
.
we, as a conglomerate of folks who are interested in making, buying, & collecting knives, have only one objective here - project the interest of the knife community to the rest of those who may log in!

[Dingfod]

This is an interesting thread: I read it a few days after reading an article in an old (couple of years) issue of Blade.

The author was discussing how he had just had a call from a client. Said client had put in an order FOUR YEARS previously; when the maker sent out a letter to inform that the knife was ready, the client had taken issue with the price being "quite a bit higher than originally agreed upon" (maker's words) . The maker "had to explain that of course the price was higher, I make better knives now."

If the client had just put himself on a waiting list to take whatever was made when his turn came up, I guess I can see the reasoning here. If the two parties agreed upon details and price, then....
And what if the client had put down a specified percentage of that price as a deposit? Or prepaid? Does that mean the maker had reneged on a legal contract?
Perhaps a flat deposit ($50? $100? etc.) to be applied towards the final price is more appropriate than a percentage....

Just contemplating.
Ron

[A T Barr]

Originally posted by Dingfod
Perhaps a flat deposit ($50? $100? etc.) to be applied towards the final price is more appropriate than a percentage....
Ron

IMHO, when I take an order, I give a price. If the customers does not upgrade before the knife is complete, the price is set at that time.

A.T.

New knives added 01.21.03 http://www.customknives.com/
"Don't you buy no ugly knife"

[J.Arthur Loose]

Yeah,

I don't get that- an agreed price is an agreed price. I don't see how you can justify taking an inordinate amount of time to get to something and *then* asking more for it.

[GANNMADE]

A SET PRICE IS WHAT IS AGREED UPON.IF YOU NEED TO RAISE
YOUR PRICES DO IT WHEN YOU HAVE NO ORDERS.THAT WAS
NOT TO COOL THAT WHY TRY TO GET EVER DETAIL
THEN ADD THE COST.AND THAT THE PRICE

[Keith Montgomery]

I know a maker whose price increases as the years go by, even on knives that have been previously ordered, for the very reason mentioned above; he gets better at making knives. This is something he tells you when you order a knife, so I don't see a problem with it. If you don't like this policy, don't order a knife. I would not want to be surprised with a price increase when the knife was ready to ship though. Just be up-front with me is all I ask; then I can make a decision based on all the facts.

[A T Barr]

Originally posted by Keith Montgomery
I know a maker whose price increases as the years go by, even on knives that have been previously ordered, for the very reason mentioned above; he gets better at making knives. This is something he tells you when you order a knife

This is different, he let's his customers know. That's as fair as it can get.

A.T.


New knives added 01.21.03 http://www.customknives.com/
"Don't you buy no ugly knife"

[Danbo]

I do not pay down payments on knives ordered. Never thought it was a good idea personally, and have had many a maker tell me they don't want payment ahead of time anyway. I once tried to pay Jerry Fisk up front for a knife, and he told me to wait because if he was paid up front, he would just spend the money and then would feel like he was making the knife for nothing when he got to it. I have also seen too many of my friends burned by makers who took deposits or full payment, so that's why I dont do the down payments.

[mongo]

I'm with Danbo here. In fact, I took his advice recently when I was set to order two knives of a known and respected maker who half way through the process made it known that he requires a 50% deposit up front. This turned me off to the deal because the knives were an established model that he makes, and could have easily sold them if the deal went south. Even though the knives were very reasonably priced, and were destined to be gifts, I decided to back out of the deal. However now, I feel "funny" about any future knives from this maker. I'm fairly certain that he will not change his policy even though I related the negative experience I had in the past with my very first custom I ordered. It is a shame that there is so much inflexibilty here.
On the other hand, I have had a great experience with another maker, Craig Camerer, who didn't require payment until the knife was nearly done. He emailed me pics of the knife as it neared completion, which only whetted my appetite and desire to send off my payment because the "pot o' gold" was visible. As it stands, I will do business with him again because of the positive way he treated me as a customer. I also have a knife on order with Terry Primos who has a similar policy.
I will continue to do business with makers who practice this way.
My .02
Mongo

[Keith Montgomery]

I have changed my view on deposits over the last little while. I now am comfortable with deposits of 15 to 20% to cover materials used to make the knife, even if the materials are not special order. This way, if I back out of the deal for some unforseen reason, the maker is not out of pocket until the knife is sold.

Edited to get my meaning across a little better.

[bilestoad]

I'm a big fan of Jens Ans?, and have two of his knives. The first was a sheepsfoot fully loaded. Damasteel, gold plug, file work, nice lizard skin sheath.

Jens didn't ask for a deposit, and didn't know me. He told me he would have the knife ready in about 6-8 months. He would follow this up with an occasional email letting me know the progress.

Sure enough, the knife was ready when he said it would be. I sent him a money order for the knife and received it a week later.

(keep in mind I live in Canada, and he lives in Denmark!)

The second knife was a full custom job, one he had never attempted before. A Persian fighter in Damasteel with mammoth ivory handles, file work, heat treated screws (also fileworked) and a spiffy sheath covered in snakeskin.

because of the cost of materials we worked out a system of payments. 1/3 on order, 1/3 about half way through, 1/3 when the knife was finished. I suspect he didn't feel comfortable about asking for a deposit, but in my mind he was totally justified.

I will also say this. He kept in contact with me and sent me quick emails telling me what stage the knife was at.

I'm now planning another knife for him to do. We've never met or talked on the telephone, but I feel quite secure in doing business with him, and will send him a deposit anytime.