Interesting dilemma...

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Rick Turner

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I'm not asking for advice here, just relating a story that illustrates one of the frustrations of being a builder who sells to dealers...

We recently did legitimate warranty work...resetting a neck...on a Compass Rose tenor...a very expensive one built "at the edge" with an Adirondack spruce top and Brazilian rosewood back and sides. The top had moved a bit...well, we took it pretty thin; this was one of our "extreme" ukes, so it moved... And the action came up. The owner quite reasonably wanted us to do something about it...and we did.

Our problem?

We've never been paid for the uke by the dealer... We invoiced it in early 2011, invoice still due well over a year later... The bucks are nicely in excess of $2,500.00 out the window...

But we went ahead and fixed the instrument because our commitment is to the player... And now the dealer is touting spruce/Brazilian ukes by another builder...

Welcome to the real world...
 
I know you won't do this, but you SHOULD tell us who the dealer is, so we could boycott them!! What a shame that someone would do you that way.
 
I'm not going to "out" the dealer here. He'll probably see this, and he'll know.

Many dealers have had their problems over the past couple of years. So have I, though...and prostate cancer surgery last year was not the most fun I've had in my life... But I'd be happy with the kind of informal payment plan I do with my good suppliers who extend me credit. If I can't pay the total bill, I make payments "on account" so they know my commitment to them. Every week I tell my bookkeeper to cut checks for modest amounts to the few suppliers to whom we may owe some $$ to chip away at it and to show that we're not blowing them off. That policy pays off big time long term.

I just had a wonderful visit from one of my main wood suppliers, Steve Jackel of Jackel Enterprises. He sent about $600.00 worth of mahogany and WR cedar to me last month, and I've made a couple of payments on that, and he's totally cool. He can drop by, and we don't even talk money...it gets very real very quick with him. We talk the general state of our respective businesses...and both have struggled, but we're both lifers. He is also an ex-luthier. The company he was involved with about 30+ years ago made over 20,000 inexpensive mountain dulcimers. He knows what I go through trying to make payroll on Friday. I know where he's coming from. And he knows that I take my modest debts to him seriously, and that I'll show him "the love" every month whether I get the entire bill paid off or just maintain a constant reasonable balance owed to him. We continue friendship and business by making the effort. That's all it takes. The blow off is what sinks it...
 
Yup. I know that story well and feel your pain. At least you know that service to the player is the most important thing, and we all applaud you for that. It makes me thankful that I am part of an outfit who doesn't work with dealers. Yes, its a lot of work to do all the sales/service without them, but at least we know its being done right.
 
been in that situation a few times.. patience is uncomfortable but beneficial. At some point it escalates. That dealer will probably not benefit by anyone hearing that he does not pay his bills. I bet his customer would not appreciate that he is playing on an instrument with questionable juju behind it. People that do not communicate, or make any effort to make things right, on top of not paying a debt, suck...
 
Aaron, you (well, we) bring up an interesting topic...the "retailer's" cut of a sale.

Any builder who sells direct for what would be a dealer "wholesale" price is committing business suicide. To think that the sales side does not take time and cost money is utterly insane. I have one direct customer with whom I'm in well over 100 e-mail exchanges. Every time I get an email from him, it costs me time...real time...to even think about it. With that many exchanges, I've got enough time into it to have done a good portion of building another instrument. Yes, every minute I spend on-line...yes, here...or answering correspondence is a minute I was NOT out in my shop building an instrument.

And don't even ask me about the requests I get for constant photo updates on work in progress. I'm about to institute a policy of "one round of pics included in the price"...and then it's going to be a minimum of $25.00 per photo session, even if it's a shot from an iPhone.

And while I'm at it and ranting...photos of "the wood"... OK, I have a pretty damned good idea of what that funky chunk of whatever is probably going to look like sanded to 220, epoxy sealed, and then finished...but it looks like a dull turd sitting on top of that pile of other "gold" resawn sets and billets. Customer want to see bling in rough lumber. They don't have the experience to do so. I can soak it in mineral spirits, and I could get a $500.00 an hour fashion photographer in...and it would still look like crap.

So, guys, trust me on the fu..... wood! I've been at this for decades. I know pretty much what it will look like when I shoot that finish on it. An I know how to "turn up the contrast" if that's what you want..."see the 20 pictures of various stain enhanced PRS guitars attached..."

We builders can offer players an unbelievable array of possibilities. The best uke builders in the world are posting right here. But we/they need to be respected for what they do best...and that's spend most of their time building ukes...not selling them.

'nuff said o' this...for now... You long term builders know what I'm talking about here...
 
I no longer supply to anyone without getting the check neither do I buy on account... it's not worth it. I'd rather run my overdraft and use my credit card than have the hassle of wondering why, when or where I will get paid. This is a business for me, not a charity and tho I know where you are coming from Rick, it's something I won't do - unpaid bills are like a surfeit of caffine: they won't let you sleep nights. Part of this recession is shouldering the pain together. Seems to me like you've been suckered mate and now you have been replaced, it's time you went to the divorce lawyer :)
 
Rick:

I hear your rant on customers and I feel you. People often hire professionals but then don't trust the expertise that they hired you for. I would not stand behind a plumber telling him to use 1/2" pipe instead of 3/4" pipe, but I get second-guessed by clients quite often. (not in the luthier biz, tho, about which I know only enough to trust guys like you)
 
Any builder who sells direct for what would be a dealer "wholesale" price is committing business suicide. To think that the sales side does not take time and cost money is utterly insane. I have one direct customer with whom I'm in well over 100 e-mail exchanges. Every time I get an email from him, it costs me time...real time...to even think about it. With that many exchanges, I've got enough time into it to have done a good portion of building another instrument. Yes, every minute I spend on-line...yes, here...or answering correspondence is a minute I was NOT out in my shop building an instrument.

And don't even ask me about the requests I get for constant photo updates on work in progress. I'm about to institute a policy of "one round of pics included in the price"...and then it's going to be a minimum of $25.00 per photo session, even if it's a shot from an iPhone.

And while I'm at it and ranting...photos of "the wood"... OK, I have a pretty damned good idea of what that funky chunk of whatever is probably going to look like sanded to 220, epoxy sealed, and then finished...but it looks like a dull turd sitting on top of that pile of other "gold" resawn sets and billets. Customer want to see bling in rough lumber. They don't have the experience to do so. I can soak it in mineral spirits, and I could get a $500.00 an hour fashion photographer in...and it would still look like crap.

So, guys, trust me on the fu..... wood! I've been at this for decades. I know pretty much what it will look like when I shoot that finish on it. An I know how to "turn up the contrast" if that's what you want..."see the 20 pictures of various stain enhanced PRS guitars attached..."

We builders can offer players an unbelievable array of possibilities. The best uke builders in the world are posting right here. But we/they need to be respected for what they do best...and that's spend most of their time building ukes...not selling them.

I couldn't agree more. This post should be a sticky where every potential customer could see it. The couple of builders I know who charge for this photo update service have the right idea. Not only is it disruptive to the flow of work but it's often unhelpful and misleading. I read you post several times Rick. It's too damned true to be funny. I've had a small percent of golden customers that totally trust me and I'll do anything I can for them. They are the ones that make this work enjoyable.
 
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Yes, the issue of wood pictures is complicated. Even with our on-line gallery where they can see every uke we have ever built, it takes Char many "days off" to do wood selection and the corresponding communication. It is always a balancing act to provide good customer service without spending "too much" time on certain aspects.
 
It's more important for me to remain in control - if I find anyone pushing at my door, being unreasonable or in any way applying pressure they get their deposit back. Similarly if they don't like the uke they get their money back no question because there is always another client/customer out there who will snap it up. There is no reason why the tail should wag the dog...
 
These aren't issues that are specific to the instrument industry. I deal with this often in my day job. I think the big thing for me is not letting something get too far past due without making sure there is some form of communication, preferably in writing, that makes sure that person identifies that they owe the debt. I could see a lot of different scenarios in Rick's situation, but I guess it depends on the relationship in regards to how I would pursue it. I have one dealer for my instruments and he prepays everything. If I have something in the works, then I wont ask for payment until completion even though he would actively list it. I just spoke with a retail store today about carrying my ukes. They work on a 20% consignment deal. A friend of mine lists with the same store. If they sell one, they wont call him up and tell him unless they need another instrument, otherwise they'll wait for him to come in or ask if they have sold anything. I think I'll stick one instrument in there and see how it goes. I really like having someone else deal with the customer because I'm just too cranky anymore to have the patience. :)

I don't do photo requests and I make it clear up front that I will post photos from time to time on my site but I rarely send them to the customer. At most, I'll send them a quick note saying I posted some but that's about it.
 
One of the problems with a dealer (including the one in question...) is that when they owe you, they won't buy any more from you; they go to another builder for new inventory (including spruce and rosewood...), and you wind up not only not getting paid for what you did, but you lose current and future sales with that person.

Consignments are tricky; some stores will conveniently forget to call you as soon as they sell your minstrument...you have to constantly check on them. The smarter vintage dealers, though, like Mandolin Brothers and George Gruhn virtually built their businesses on consigned instruments and they were smart enough to really take care of the folks who put instruments with them. They realized that their only costs were in advertising and the cost of the space the instruments took up...allowing a very high return on investment. They probably made and make a significantly higher ROI on consigned instruments than on the Martins, etc. that they have to pay for and then heavily discount.
 
One thing that I had considered doing was setting my retail price then offering a larger discount based on how they paid for it. If they wanted terms then it was 10%, consignment 20% and up front 40%. I'm not saying those percentages are actually the numbers that I'd use but has anyone ever approached it from that perspective? Had a discount schedule based on type of payment?
 
Well, there are very often "cash discounts" in any business, or terms like "discount 2% net 10", etc. And some companies bump up credit card sales by the amount the credit card company or merchant services charges to handle the transaction.
 
having too much swing might give the impression that your prices are (too) flexible. Pics are good, in that they can help close the deal. Pics during the process only when necessary, or beneficial for relationship. Client needs to understand that everyone wants pics, and that this takes time. Pics cost extra, I charge extra for pics sometimes, if they are unnecessary. Most people become patient with no pics when faced with this option. This is for turntables of course, niot ukes.
 
also, 10% maybe yes, but 20% or more, that off of the dealer price either starts squeezing you out of business, or it starts pushing the retail up, possibly too high.
 
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