Do you charge before or upon delivery for higher ticket products?

Discussion in 'General Shop Talk' started by CThomas817, May 4, 2019.

  1. CThomas817

    CThomas817 TPF Noob!

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    I have recently added custom albums, wood and metal (aluminum) wall art to my product options. My prior business practice would allow clients to order paper prints and the option of paying upon delivery if they opted for "white glove" delivery.

    Now that I am offering higher ticket items, I am uneasy ordering a high priced item without first receiving payment. If the client was truly unhappy with the item for an understandable reason, I would obviously eat the cost to replace it or refund it, but I feel like this opens the door for refusal to pay for nit-picky things, putting me out.

    Do you require payment in full for products ordered prior to delivery?


     
  2. smoke665

    smoke665 TPF Supporters Supporting Member

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    I am strictly an amateur but when I do order prints for friends and family I generally ask for enough to cover the cost up front. I have a friend who does custom screen prints and vinyl on shirts, bags, etc. She started off not getting money upfront, and quickly got burned, by people who never picked up their items. Then she went to a deposit, but still there were a few that left her hanging. Finally she decided that it was paid in full upfront, problem solved.

    She found that with custom items that had a lead time, it was very easy for people to get "buyer remorse" between the initial order and delivery.
     
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  3. ac12

    ac12 Been spending a lot of time on here!

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    Think of it this way, if they refuse to accept and pay, that could kill your profit for the month, or worse make you loose money.
    A small business has to be very careful with cash flow, and not "get stuck" with expensive expenses.

    If you have multi-payment option, I would have
    1. A non-refundable partial payment (maybe 50%) at time of booking/order.
      The larger this payment %, the less likely they are to back out later.
    2. Final payment should be couple weeks to a month, BEFORE the event.
      The payment time before the event is to give you some time to try to find another gig for that time slot, if they cancel.
    3. Optional final payment BEFORE you commit to the expenses with your suppliers.
      This would be the final gate. If no payment, then you don't order.
    You also do NOT give picture files to the non-paying client.
    This needs to be clearly stated in your contract.

    But as @smoke665 said, FULL payment up front is the cleanest solution.
    Partial payments, means you have to keep track of the payments, and possibly have to hound them at payments 2 and 3.
    That could be a significant waste of your time. And there is "the check is in the mail" issue. So, in your contract, you need to clearly state that payment obligation is not met until the check is in your hands. This is to avoid the check is in the mail issue.

    But with full payment, you will have to come up with a refund schedule. Because it WILL happen.
    If they cancel (at different points in the timeline) what % refund do they get.
    Like payment schedule, this also has to be in the contract.
     
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  4. Overread

    Overread has a hat around here somewhere Staff Member Supporting Member

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    Just a note but have a firm payment policy too if you're taking payments after delivery or after partial delivery and such. It's very easy for people who fully intend to pay to forget or keep putting it off. So you want a clear formal setup for yourself about exactly when you send out reminders and have sample ones drawn up so that it a simple case of fill in and send off. You want early reminders which are nicely worded and are just a reminder; before scaling into formal demands for payment as a last resort.

    You might also get some legal advice from a lawyer who specialises in this line of work, even if just to get rough quotations for estimated prices and costs of taking legal action. This gives you a bottom line understanding of when you can keep legally chasing a payment and when you just have to write it off. IT also means if you don't write it off you've got an idea of what kind of costs chasing are going to be.

    The last thing you want is to get stuck in a situation where they are court blocking you or stringing you along and you're winding up with mounting legal costs - esp if its for a really small fee.
     
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  5. Derrel

    Derrel Mr. Rain Cloud

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    Psychologically the _owner_ of something is less-likely than a prospective _buyer_ to nit-pick and find fault with a product.
     
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  6. smoke665

    smoke665 TPF Supporters Supporting Member

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    He who controls the money, controls the deal. Really chaffed my butt, when we had a bad debt for less then $10k, because depending on where they were (in state, out of state), it became a matter of the cost to recover. Even small claims court, by the time you figured in fees, time lost, travel, etc. you didn't really come out. Even if you won then you had to enforce the ruling. Sometimes it was better to walk away then incur the legal costs. Sadly a lot of those that did this knew the law better then most of the attorneys.
     
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  7. 480sparky

    480sparky Chief Free Electron Relocator Supporting Member

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    THE MOST IMPORTANT WORD when being in business.
     
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  8. Designer

    Designer Been spending a lot of time on here!

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    Make the initial non-refundable payment equal to or higher than your cost. That way, if the client doesn't pay the remainder, you're not out of pocket.
     
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  9. tirediron

    tirediron Watch the Birdy! Staff Member Supporting Member

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    I take payment when I deliver. With the very few clients that I have who make large orders and to whom I don't deliver personally, I have had no problems. I've had the odd client flake out after a session, and one or two who've simply forgot, but I've never had one renege on a significant order.
     
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  10. CThomas817

    CThomas817 TPF Noob!

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    Great advice, thanks everyone.

    My regular contract doesn't cover these new products. I offer a lot of packages that include both the session fee and the paper prints, so the total package price would often be paid for prior to the shoot and I would thus already have the funds to cover my supplier cost. Now that I am offering additional products which the client can purchase post-shoot, I am entering another purchasing window where my regular contract doesn't apply.

    Perhaps I should add an addendum to cover separate product purchases.
     
  11. CThomas817

    CThomas817 TPF Noob!

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    This is a great idea, thanks.
     
  12. JBPhotog

    JBPhotog No longer a newbie, moving up!

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    Look at it this way, if you don't enter into a shoot without a contract why would you with a custom product? It is easy enough to initiate a new contract for products and services on a one page purchase order. If you ever have to go to court over payment or dispute of the products, a contract will clarify your position.

    It is your choice if you want a deposit, if it makes the initial outlay by you less painful then ask for 30-50% with the balance on delivery.
     
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