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  #1  
Old 10-02-2002, 10:03 AM
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J.Arthur Loose J.Arthur Loose is offline
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Deposits on Custom Knife Orders

So this thread:

http://www.ckdforums.com/showthread....&threadid=9567

...Got me thinking about deposits.

How do other makers handle deposits on custom commissions? Have you found that they impact potential sales one way or the other? What do collectors think is an appropriate figure?


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Old 10-02-2002, 11:11 AM
cactusforge cactusforge is offline
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J, I am with you on this as I have had over $1600 worth of knives that were ordered with no follow through this summer. When I tried to contact them two of the people would not answer my emails or phone calls. The other one bought a quantity of knives $1100 worth and ordered more which I built and when finished I called him and he would not exact them. Live and learn I guess. Some say we should not do this but I sometimes wonder if thy are living in the world that we knife makers that are striving for name recognition are living in. I would like to hear more on this subject as I wonder how many have experienced trouble with the lack of sales being one of the biggest problems for the new knife maker. Gib


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Old 10-02-2002, 11:27 AM
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Bob Sigmon Bob Sigmon is offline
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I'm a manager of a furniture store. Every special order has to have a deposit. 1/3 to 1/2 is about right. You need the comittment from the client up front. As I start selling knives, I will definately require a deposit. Everyone is willing to play with your money.

Knifemaking is hard enough without the hassle of order falling through!
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Old 10-02-2002, 12:13 PM
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Don Cowles Don Cowles is offline
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This may not be to your liking, but the norm in the custom knife world seems to be no deposit, unless:

A)- money has to be laid out up front for rare or unique materials, or
B)-the knife under consideration is so unusual that the maker could probably not find another buyer.

Having said that, I have no problem with anyone asking for a deposit if they can get it. I do know that it turns off a lot of potential buyers, however.

This is another fine reason, in my case, for refusing commissions. I can make what I want to, and offer it for sale. Deposits are a non-issue with me.


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Old 10-02-2002, 12:51 PM
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Bob Warner Bob Warner is offline
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I used to make knives exclusively to the customers order. I required 50% up front and the other 50% within 30 days of finishing the knife. After 30 days, I would resell the knife. I had this in writing with EVERY customer that ordered a knife. I only had two not return for the knife after being notified. Both of them asked me to try to resell the knife as they could no longer afford to buy it. Both knives sold for the outstanding balance. I had one knife ordered forged out of a drill bit. A large 1" drill bit and they wanted the drill to be the handle and the "tang" hammered out into a blade. It was the wierdest request ever, I knew I could not resell it and explained that to the customer, he paid in full before I started.

I rarely take custom orders anymore. Not because the deposit scares them away, but because the many, many little "Changes" that always seem to come up that take so much more time.

Now, I make what I want and if it sells, OK. If it does not sell, OK.

I will still require 50% up front on any order that I get requiring me to make something specific. I don't live off knifemaking so I can afford to loose a sale by makeing this a requirement.


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Old 10-02-2002, 12:57 PM
JossDelage JossDelage is offline
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From a collector's standpoint, I have no problem with giving a deposit, but the deposit should be commensurate with the ETA. A Jpz sword polisher I know requires 1/3 paid when order is placed, 1/3 when work starts, and 1/3 on completion. Another maker I respect a lot requires a $200 non-refundable deposit, independantly of the final price. This seem like a good way to lock in a sale without putting at risk too large amounts. The problem with some top makers is that the ETA is so long (1+ year) that large deposits would become quite expensive.

JD


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Old 10-02-2002, 01:23 PM
J.R. Fraps J.R. Fraps is offline
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Fellow Makers,
I don't take a deposit unless the customer insists on giving one.
The reason is , yes customers mostly don't want to make a deposit, but also, once there is money involved, you are committed much more extensively as well to produce what you agreed upon, and when, even if it is not something the client or you want down the road...and then renegotiating item and price can be a hassle.

I recently has a sale to a client and a potential for a followup sale right away. The first knife was to his acceptance.
The first thing he did when ordering the 2nd knife, after we unfortunately agreed upon a price for a "standard" size knife was to specify a change in size.
Unknown to him, this meant creating new fitting jigs, milling jigs, patterns for blades and handles. and added at least 50% to my time and costs to create the knife with no increase in $'s.
It also meant that there was a possibility I would need to make at least a "trial" knife, then refine it for delivery....at least the way it turned out, I probably should have.
And while I could have asked for more $'s, he had just sent me a check very promptly for the first knife, ( read this as emotinally making a deposit) so I felt very obligated and committed to exhisting agreement even though the knife and my work increased dramatically.
Bottom line is that the larger folder wasn't exactly as he wanted it , he and I not only felt unhappy, but I now have one more gift for a family member coming up this holiday season and no $'s for a week's worth of frustration and effort.

I would love to operate as Don Cowles does, and still get the flyrod out occasionally. I want to make what I want and then offer to sell it, but sure would love a tutorial from Don on how to get there, what shows to do, what advertising does for you, what your excellent website does for you, etc.
PLEASE!

Stay Safe,


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  #8  
Old 10-02-2002, 01:53 PM
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John, the only way I can do what I do is to have a day job. I haven't been fishing in three years.


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Old 10-02-2002, 05:46 PM
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Jerry Oksman Jerry Oksman is offline
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OK, this one I can give an answer to

It depends, I have seen it work both ways. Generally I don't have a problem with deposits. I think it's more than ok to ask for one if the materials are unusual or expensive or if the knife is as mentioned before is very unusual or personal.

I think that if the knife is a standard or close to standard model offered by the maker they shouldn't ask for a deposit.

I have also noticed that it's mostly the older established knifemakers who don't ask for a deposit. They feel (correctly) that whatever they make someone will buy it. It also free's them up to make what they want.

I have, however, order some non-standard knives and not been asked for a deposit.

The 30 day pay up period I am not so sure about. Remember "Sh_t happens". It may be that when ordered the person had every intention of buying your knife, but something occured and then they couldn't. I had a situation where a week before I was notified that my knife was ready, I had a car accident. I was suddenly out $1,500 dollars. My "fun" cash was gone. I explained this to the maker and he graciously waited an extra month to get paid. Of course this goes back to that old mainstay in knifedom "communication" We had kept in contact throughout the process and had a relationship (so to speak). While paid late, he still got paid and I hope I justified his faith in me.


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Old 10-02-2002, 06:14 PM
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my experience has been similar to jerry's.
i have two randall's on order at $20 deposit each. This is less than 7%, so i don't know why they bother (as if they would have trouble selling the knives if i back out). maybe it's a good faith thing.
other makers have refused deposits unless there were non-standard materials or designs involved, but never more than $50.
.
in the case of someone wanting to commission something quite out of the ordinary, i can see nothing untoward about explaining the requirement of a large deposit for the very reasons we are discussing.


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Old 10-02-2002, 07:11 PM
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The 30 day thing is nothing more than motivation to finish the deal. I have made other things and have had to wait a LONG time for the rst of the cash. If you give a limit, they usually come through in that timeframe. I am not a cold hearted person and work around the "unavoidables."


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Old 10-02-2002, 07:15 PM
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Deposits

I guess I'm to trusting,
I have yet to have anyone not pickup or pay for their knife, and all the clients that I have ever dealt with have been very honest

However! it also depends on how he/she talks and looks.

If it's at a knife show I may ask for 25%, depending on how
the conservation goes.

And less face it, if you get a 25% deposit, your materials are
covered, But not your labor.

Most of the time I ask for no deposit, because this is what
builds a good customer/client relationship.

But this is what works for me.


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Old 10-02-2002, 07:16 PM
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My experience as a custom knife purchaser from 5 different knifemakers has been the requirement of 0% deposit all the way up to 100% deposit. Usually the amount of the deposit depended on what the final cost of the custom knife would be. The lower priced knife & quickest delivery date - 100% deposit required. I have no problem with the amount of a deposit. I certainly can understand the reason for it. I'd be darned if I would want to spend my skill, materials & time on a custom knife & then be told -
"Oh, by the way, I don't think I want that knife now!"

I can only think of one time where someone got 'burned' by giving someone a 50% deposit. That was my father when he was having his kitchen remodeled. After the contractor got his deposit (a rather good amount of $$) we never saw him, again. Checked the store he was operating out of & it was as 'clean as a whistle'. My father never gave anyone a deposit after that - "You don't get paid until the job is done & I inspect it!" Never had anyone not accept his terms, either.


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Old 10-03-2002, 09:27 AM
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From a buyer's perspective, one of the big risks with placing a deposit is that the maker's priorities may change slightly as a result.

Let me provide an example.

Maker X takes a deposit from buyer Y, with every intention of making the knife to the buyer's satisfaction within a reasonable amount of time.

Maker X finds that he's running a little low on time and money, and with a big knife show coming up he postpones buyer Y's knife so he can make some products for the show.

At the show, Maker X sells some knives, gets some new orders, and spends most of the income on exotic new materials, room and board, transportation, table space, etc.

Luckily, Maker X got some good recognition at the show, received some big orders, and was able to raise his prices considerably. The new orders he's received will bring in some decent cashflow.

The balance of the price agreed to with Buyer Y, whose order is still outstanding, now represents a very small amount of money compared to the money Maker X can make on new orders or at knife shows. His opportunities and, as a result, his priorities, have changed.

Many months pass. Buyer Y begins to wonder what's going on. He doesn't want to push the issue because he's afraid that if he irritates the maker, he may never get his knife, or, worse, he'll get a hastily made product from an angry maker that no longer feels his time and effort is worth the small, incremental amount of money he'll get upon completion of the project. Further, the buyer recognizes that Maker X's skills have improved dramatically since he placed the order, and hopes that a little more patience will pay off. Perhaps the maker just lacks discipline and business sense.

But he's not sure.

Perhaps instead its not discipline but ethics that the maker lacks...

So buyer Y considers cancelling the order altogether and demanding his deposit be returned. It's the last thing he wants to do. It certainly won't do the maker any good either. The loss of a deposit, the loss of a potential repeat customer, the damage to his reputation... they're not worth it.

But it's a risk.

Many buyers don't feel comfortable making deposits, many others regret having done so in the past. Many makers don't feel comfortable accepting deposits because they recognize that there are indeed too many variables too manage effectively. Too many temptations. Too many risks...


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Old 10-03-2002, 09:55 AM
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I only ask for a deposit when I have to buy a large amount of Damascus or special high dollar handle materials that I do not normally have on hand and would not normally buy. Even then, I only ask for the amount of the materials.

All other times, I will not take payment until the knife is complete. Of course, my personal circumstances dictate that policy. I very rarely take orders and even then, only from established customers. Most of what I do is speculation because I make so few knives and issues like sending steel to heat treat and meeting delivery dates affect how I operate. I can usually steer order inquiries to a spec project I already have planned so that works out well too.

In addition, I will not make a knife as an order that I wouldn't make on my own, so even if an order is cancelled at the last minute, the knife is still marketable.


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