Deposits yes or no?

[morbid fury]

OK so I have a few small orders and quite excited about it.
However I have had 2 other orders back out after the work was done.
One was an order for 3" thick ash boards 8 feet long. No other use for those except resawing into boards.
My question is, do you guys ask for a deposit on jobs, and if so what do you base it on and how much to ask for a deposit. I hate to do it but there is money wasted in sawing these orders and when they cancel I go in the hole. :(

Thanks

[Jeff]

Since you've been burnt, you have good reason to put any sort of policy in place you think you need. No reason not to even ask for payment in full in advance for custom cut orders. its easy enough to explain that the custom sizes are not something you can just easily resell to someone else the next day so that's why you have the policy.

[Magicman]

That's a bummer.  I don't sell lumber, but there is an old saying about "beat me once your fault, beat me twice, my fault".

I would think that a contract and deposit is very much in order.  The contract is protection for both of you.  It assures the customer that he is getting what he orders, and it assures you that you will be paid on delivery.

Of course, contracts are broken every day.  They are like locks.  They keep honest people honest.

[r.man]

I think Magicman is completely right about the contract, it is mostly a written account of what they have asked for so there is no misunderstanding at the end when the lumber is finished. A strategically sized deposit however should not keep them from ordering and if they back out should stop you from losing money in the long term. Still inconvenient in the short term but livable if the amount is right. I find it surprising the number of people who walk away from a deposit, partial or whole payment for goods. Over the years I have heard of more than one person who sold something once, received the whole purchase price and then eventually sold it again years later since the original buyer never returned to take possession. 

[Brucer]

After a few hundred jobs, I still haven't had anyone cancel on me once the job was done. I've had a few people call up and ask if I'd started the job yet. In one case I said I had and the customer told me he didn't need the wood after all, but he'd pay me for it.

I do ask for a deposit if a job is going to be more than $2000, or if I have to buy special logs to do it. When a job gets up over $10,000 I ask for a deposit up front and 3 or 4 progress payments.

[carykong]

I have made a few sales on craiglist for custom lumber. $1000 job for a stranger. I requested and received a $80 check in advance to demonstrate good faith. Repeat customers that I know and trust. No need for deposit.

[morbid fury]

Thanks. Craigslist is where the troble is so far. Good way to make a few extra bucks from wood but going forward I will be requiring a deposit on all jobs that have special orders that I can`t use or resell, and any large orders. I apprecuiate all the replies.

[Cedarman]

Any order that we will ship to an individual is paid in full including shipping.  From $50, to $10,000, whatever it is.  Check or money order no credit cards.  For new companies, it is a case by case basis.Usually get 1/2 down from new companies.
From good repeat customers that we ship to we still get paid in full. 
From customers who will pick up their order it is 1/2 down and 1/2 on pickup unless it is common sizes we sell often such as 1x6x8, 4x4x8 or lumber we always seem to have on hand.  Or they are good repeat customers.
Make sure that in the course of taking the order there is full discussion of what the customer expects and what you can provide.
We do 1/2 million dollars per year this way and it lets me sleep at night.   The less you are in a position to have to trust someone you don't know, the better it is.

[paul case]

you do have to learn to feel people out.
i got stiffed by one fella who brought me the logs and i sawed them and he never came to pick it up and pay. i figured he would since he brought me the logs, but i figured wrong.  safeguard against it and you will be a much happier sawyer.  pc

[terrifictimbersllc]

Not the type of deposit you're asking about, but I never considered an advance deposit for portable milling.  For  a while was intent on getting a signed agreement before driving up to a hundred miles or so.   Now I don't worry about it I send the agreement in advance and ask for any concerns.  Haven't had a problem yet but almost always am confirming the visit the day before.

[ely]

sort of like the 1200 bdft of quartersawn burr oak i have in one of my drying sheds.....for 4 years now. i have had it uncovered and ready to load about three times in this time frame, the man never shows. i finally just filled my shed to capacity and decided he can move it when /if he ever shows up. plus i am building a house now and when i get the stack used down to his lumber i intend to keep using like it was mine.
i figgure the time has eaten up his wood in storage fees.

[Buck]

contracts and deposits=the only way to go. I am learning that I may have to re-think the way i do firewood business. I have more and more people conviently not home to accept delivery and phone a promise to drop by and pay for the delivery. The latest occurence is now growing a week old.

[woodmills1]

make sure to tell the new customers about why you want a deposit, having been burned they will understand

[red oaks lumber]

i have about 500-600 customers a year, no contract, but always get half down. i tell the customer  this ,by doing half down it makes a commitment on both are parts. even on repeat customers every one knows the drill..

[laffs]

if your useing your logs at least get that much down so it pays for the logs. then if you sell that lumber charge for the logs again

[cutterboy]

Some years back a guy came and picked out 100bf of red oak and paid me cash for it and said he'd be back in a week with a truck to get it. I put it aside for him. A year went by and he hadn't showed up. I only had his first name, no phone number, no adress. I was thinking about selling his lumber to someone else when he finally called and said he'd be up tomorrow. He came, picked up his lumber, and left without giving me a reason for the year's delay.

  People can be very strange.  Ralph

[Busy Beaver Lumber]

We extend very little credit, except to customers that have a long standing good record of quick payments and who are in sound financial condition. No credit is extended to new customers. On the flip side of the coin, we do not ask for any credit whatsoever from our suppliers.

If a customer drops off logs to be milled, or has us perform other services, we do ask for a minimum of a 50% deposit. If it is a custom size that we can not readily resell, it must be paid for 100% in advance. We also have it in our contract that any wood not picked up or scheduled for delivery within 14 days of being notified that the milling is done is forfietted and becomes our property and as such will be sold to compensate us for the milling and storage charges. This is an important provision for us because we are limited on space and do not have the ability to store completed jobs for extended periods of time. If we are to deliver the wood, all delivery charges must be paid in advance before it even leaves the building.

When we deliver firewood, it must be paid for at the time of delivery, or in advance with either check or cash, including the delivery charges.

Be carefull about long term customers and the false sense of security you can feel with them, because they can turn out to be deadbeats over night, even if they had previously been good customers for years past. These are hard times for many companies, and unfortunately it does not seam to take much for a loyal, previously trustworthy customer to stiff you when it is a choice between your survival and his survival.