Deposit?

[Riggs]

I had a guy call me a few weeks ago wanting 1000bf of poplar 1x6's. He has since vanished off the face of the earth. I sawed my logs in good faith that he would pay and pick up when I finished. I have called and left messages with him at least a dozen times on both his cell and home phone.


Lesson learned, I should have got a deposit, but how much? Keep in mind, I only saw a few hours per week, usually Saturday and one evening. He knew this going in and assured me it was no problem.


Thanks in advance for any input.

[Den Socling]

When working with strangers, ALWAYS get 50%.

[Cedarman]

Riggs, I would have gotten 1/2 up front unless you sell a lot of poplar 1x6.
Most people are very understanding and expect to make a deposit. Any that won't make a deposit should be treated with extreme skepticism.
My guideline is:
If they are picking up and it is an odd order, then 1/2 down and balance on pickup.
If it is a common order that I sell a lot of , then nothing down and all at pickup.
No taking lumber and not paying except in certain circumstances.  Such as regular customer that always pays.
If I ship the lumber , then paid in full including shipping before I start the job, unless it is common lumber.
Big companies and some other companies get billed and pay in 10 to 30 days.
Once in a while I have to make a phone call.

[Magicman]

Hopefully there is a legitimate reason and it will be OK.  A 50% deposit is reasonable and should be expected on a special order.

[Cypressstump]

I have some ' friends ' of which I would require 98% up front......... ;D

Sorry for your troubles I know how frustrating it can get sometimes.
stump

[Riggs]

I have some ' friends ' of which I would require 98% up front......... ;D
stump

Yeah, me too.  :-\

[Chuck White]

If the lumber was a standard size the I could move easily if the deal fell through, I'd get enough of a deposit up front so that it would be easy for me to get the money for the lumber from another customer.

As mentioned, 50% up front deposit isn't unreasonable either.

[WDH]

Even though you can probably sell the lumber, now you have to handle and stack 1000 BF that you did not intend to stack.

Maybe he will surface.

[JohnW]

You guys' business is always interesting.

1000 board feet seems like quite a bit of lumber.  I think if you came to an agreement, you actually have a contract.  A contract is not required to be in writing, it just makes it easier to verify the exact terms.

[Riggs]

Even though you can probably sell the lumber, now you have to handle and stack 1000 BF that you did not intend to stack.

Maybe he will surface.

I stacked and stickered it as I sawed it, glad now that I did.

You guys' business is always interesting.

1000 board feet seems like quite a bit of lumber.  I think if you came to an agreement, you actually have a contract.  A contract is not required to be in writing, it just makes it easier to verify the exact terms.

1000 bf is a drop in the bucket for alot of these guys, but it was two hard days work for me and my little manual mill. I don't think I'll have trouble selling it, I just don't want to get myself into that position again. I have a guy dropping off some logs in the morning, that is interested in buying the lumber, so maybe my worries (about this) are over.

[thecfarm]

In my little world is veggies and the wife baking. I can not count the times that people have ordered things and said I'll be back for it on this day,in the morning or afternoon.We tell them we will only hold it that day. We get it ready,no show,we just put it out and someone buys it. On big orders or things that don't sell well we ask payment in full. People mean well,but get busy with life.

[DDDfarmer]

We had a local hobby farmer ( who is known for avoiding paying bills for months) ask us to do some custom harvest work for him a few years back.  We asked for 150% down with the  "balance" returned to him after the work was done.  He didnt go for it and we didnt lose out, pretty bad when you have to go to that...

[Riggs]

Even though you can probably sell the lumber, now you have to handle and stack 1000 BF that you did not intend to stack.

Maybe he will surface.

I did sell half of it yesterday. An older gent brought some poplar logs he wanted sawed on an old dumptruck. He looked it over and said he'd like to have it, but wasn't able to load it.... I took the bait and offered to load it for him, by hand. I did sell it for a better price than I quoted the original guy that won't call me back. Not a bad day I guess.

[Kansas]

We choose not to require a deposit. Just the way we have always operated. On occasion a customer will ask if he has to put a deposit down. We always say no. We do have a few that have to pay cash to take it off the lot. I guess in the end, everyone has to decide how they want to run their business. I don't think there is a right or wrong way. I don't know why I am against deposits and contracts. Just am. I think maybe there is part of me that feels like I am calling them a crook. I don't like it when its done to me, maybe that is part of it. In any case, its rare we ever get stuck with something we can't sell. As in a percent or two, at most, of business over the course of a year.

You know, the more I think about it, I think I understand part of  my reluctance. We have our regular customers. If they call, we have to take care of them. Someone new calls, If mills break down, regulars call, and we promised to have an order done by a certain date and can't get  it done, I don't want their deposit money. That happened to us last winter. We simply became overwhelmed in January. When you take a deposit, that is an implied contract, and our reputation  is on the line. Its bad enough if we can't get it done on time. To not get it done and have a deposit, well, I just don't want that.

[Brucer]

On a very large job I will sometimes ask the customer to pay a deposit -- typically 25% to 33% -- so I can purchase enough logs ahead to time to be sure I can complete the job. After that I will ask for progress payments, based on what I have actually sawn. The payment schedule is designed so the customer will owe me about 10% of the order when all the wood has been cut.

Usually on these large jobs the customer tells me what order cut the timbers. Then he or she will pick them up as they are needed. That keeps the yard relatively clear of large piles of completed orders while at the same time helping with the cash flow.