Giving and taking commissions - risks and mitigation

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C_Claycomb

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Oct 6, 2003
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Some recent conversations got me thinking about this.

Giving or accepting a commission to make a custom item can be a bit of a risky balancing act. Both maker and client risk getting stiffed. The more custom the item, the riskier it is for the maker. A standard Woodlore shaped knife with maple or similar handle isn't a big risk, if the original buyer backs out it can be sold elsewhere, but particular profiles, custom size handles or special material requests can leave the maker with an unsellable knife. I have heard of some customers demanding price reductions after completion, believing the item is so unique that the maker won't be able to sell elsewhere. On the other side, pretty much every meltdown story involving a maker includes them having taken deposits, or worse yet, payment in full in advance, and then not being able to deliver either the item or a refund.

The stories of why payment cannot be made, or why commissions cannot be finished as promised have lots of common themes. Ill health, injuries, family emergencies, house emergencies, pet emergencies, unexpected bills, floods, and fires. Its as if there is always something waiting in the wings. I used to live with a guy who seemed to have the worst luck imaginable, but he made choices which stacked and compounded and eroded his options and resilience when things went wrong.

No one gets too bent out of shape if they put their name on a list, no deposit, and some months later the maker lets them know that there has been a catastrophe and they cannot see that they are going to get to their name on the list. Not so simple if money has changed hands already.
Payments in full in advance (even in full as work starts) have a very bad track record for getting spent and not being available for refunds in the event that ill health or other emergency halts work and the client cannot wait in hope.

On another forum I saw a long thread discussing these matters, and the makers who had been around the longest, and were still taking commissions, had some common strategies. They took deposits when work started, not before. They then took staggered payment as work progressed. Seemed a bit of a pain in the butt, but it protected both sides in the event that work got stopped or the client's money ran out.

Best wishes and good luck to all.

Chris




Disclaimer:
If you agree to take on a commission or give a commission to someone else here, and problems arise, there is little or nothing that the moderators or forum owner can do. Feel free to ask advice (for what it is worth) but its hard to see a situation where the forum or the volunteer moderators could or should become involved in a private financial dispute between members.
 
95% of commission work is hassle free.

From a makers standpoint, things can crop up unexpectedly and cause problems for both maker and client.

Also from a makers standpoint... Some clients are just dicks, Clingy, or think you're then their best mate, and feel the need to send you pics of their daughters in bikinis when they go on holiday. Wouldnt mind if said daughters were in their 20's or above, and 10 stone or below...but those aged 10 and below are not welcome at all.

Clients from other countries... Most are fine. Some dont understand exchange rates....

So yeah, 95% of the time, No problems at all.

I've made blades for Saudi Royalty, and for Eastern European working men... Never an issue. Had more problems from Americans and Brits...
 
Yup. Makers are likely to see many clients, a new client is just another Thursday, so they see problems 5% of the time. Meanwhile the client might have worked with only one or two makers, and if there is a problem it’s 50-100% of their experience base.

Managing expectations is very important.

It would be interesting for to hear what proportion of problems on commissions stem from what source. For example, changing requirements or indecision, inability to execute, changes in delivery dates, impatience, changes in price/costs…that kind of stuff.

Good makers can use their broad experience to try to guide their clients and avoid situations that have been problematic in the past. I think new makers can benefit from forum discussions and articles that share, and highlight some pitfalls they as makers could fall into when interacting with clients. I don’t think it’s realistic to hope to educate the client pool at large via forums and articles because those who create problems are unlikely to read them, or be aware that the examples apply to them. I cannot recall seeing a situation where a maker having trouble with a client has changed anything as a result of forum discussions.

Like new makers, I think forum discussions can be useful for raising awareness among prospective clients. Sending holiday photos sounds absurd. On average you don’t want to be mates. It really clouds what should be a professional business relationship. The longer the maker has been at work, the less the client should try to be friends.
 
I can't speak for knifemaking but in other fields of design the worst clients are the ones who don't really know what they want and basically change the goalposts every 5 minutes or wait until they see a finished product and still don't know what they do want but decide they don't want that. HillBill is spot on with the overly friendly ones too, which is often a segue to winkling out of paying the agreed price or throwing in some ridiculous request.
 
To be honest, this is no different to standard small business contracts. A client produces a spec, you respond with an offer (that may or may not meet that spec 100%) and a price. That offer may have taken weeks or even months to produce at your own cost and then they take 6 months to decide. They change the spec, you have to revise the offer which in our case was always a competitive tender process. Finally, you agree a spec and a price but now the timescales were the same as before they delayed and you're required to make it up. You're lucky if you can get a deposit or any staged payments so, in our case, we'd have large sums of money that even after delivery could be months being paid.

Then there are the risks - can the spec be met, can we engage the staff so there's continuity and no slippage, what happens when key people fall ill?

And, inevitably the customer changes their mind and the requirement drifts or, even worse, the main project that we're supplying to has problems and is delayed, put on hold, or scrapped!

Whether you survive this or not depends a lot on the terms of business you've agreed and compensation clauses.

It works both ways of course. Big business is taking a big risk using small companies on important jobs.

Interestingly, I've just read 'Ingrained' - I couldn't believe the parallels between building and running a small bespoke carpentry business and building a small bespoke technology one! :)
 
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