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Contracts on commisioned work


#1

Hi Guys: Being rather new in this business, we have many
questions. One is regarding contracts on commisioned work. We
need a simple contract format; all the ones in books are long and
complex. Can anyone make suggestions?

We are having troubles with customers that order one thing and
then want to change the finished item. What do we charge for
the change if this is possible? And if the customer indicates
they do not want to pay for changes and return the item, then
what? If the item is paid off, how much do we return? By the
way, what portion of the deposit is kept if the customer changes
their mind? I do not charge for the first session of design, but
sometimes the customer keeps changing…We would really
appreciate some ideas. Thanks, The Jones


#2

I have been doing custom fabrication for years at the wholesale
level however I think I can shed some light for you. First, I
always advise a customer of mine to make it clearly understood to
the retail customer that they will pay for each step of the
process. I recommend they have me make a wax model first and
specify any changes at that point. This gives them a 3-D model
they can see and even put on. I can’t be responsible for their
lack of imagination if they are still too nervious after this
point. If they bail, they must pay for the wax (I charge a
minimum of $60.00 wholesale for the wax.) If they are satisfied
with the wax, they must also understand that they’ve comitted to
the project and must see it through. If, after the piece is
finished, the retail customer is not happy with the design, they
must pay for any & all future alterations. They must remember
that it was thier design. Depending upon the profit on the item,
the merchant might absorb my charges and of course, there is no
charge for repair of defects. This may seem rather harsh, but as
you have pointed out, there are a lot of poeple who will jerk you
around and quickly destroy your profits as well as your good
humor.

Hope this helps;
Steve


#3

Well now you are in an area I am real familiar with. Although
it is unclear from your post whether you are working with retail
customers or wholesale I am going to assume it is retail. All of
your initial price quote should include the potential for future
changes. I’ll tell you what we do and you can decide for
yourself it will work for you. We always tell the customer that
there are no refunds and that we will continue to work with them
until they are satisfied. We have a basic starting price of
$500.00 for 14k and 18k , $600 for white gold and $700 for
platinum. For their initial price they can get up to 3
models–silver, wax or drawings with no additional charge.
After 3 models we ask for an additional $100 on top of everything
else. The prices I am quoting are not the final prices, they are
starting prices and the final price of the piece is determined in
the usual fashion of labor, materials, overhead, etc. If you
agree to keep working with them until they are happy you never
have to refund any money. We also reserve the right to reproduce
any design we do in the future, which is where we actually make
most of our money. Even if a customer rejects a few models we
can usually cast them up and use them for ourselves as stock
items. Do we get people we can’t make happy? Exceedingly
rarely. I believe that in the 16 years we have had our store we
have only failed two or three times. I think the biggest issue
for you might be to think more about how you are interacting with
the customer. You may need to work on your listening skills
about what they want. We have also found that silver models are
much better than waxes or drawings for the layman to see what he
is going to actually get. When you work designing things all the
time you can often look at a rough piece of junk and see a
finished project but 99.9% of the customers out there can’t do
that.


#4

Thanks a lot for the suggestions. We have no store. We mostly do
one of a kind designs. I guess we tried to be brief and we were
not clear. Our main problem was with a customer that wanted an
item we had in the case using a different color pearl and metal
and using screw on posts and nuts. Now that the pieces are done,
she send them back because "they dont go through her earholes"
and now she wants omega clips. She even returned a pair she
bought at the show and wants the posts moved to suit her
balance. Mind you she tried them on…We feel we can take the
mabe pearl earrings back but we cannot assume the labor costs
when she saw a model The earrings are not defective. We like
your ideas on models and the ideas on casting the models…maybe
now we will start making profits…Thanks again, we have so many
satisfied customers and we are starting to get return customers,
we should not focus on people that obviously try to "jerk us
around…We’re glad we asked. George and Elizabeth


#5

Unfortunately there are a lot of customers like this one out
there and the more you put yourself out in the marketplace the
more you are going to have to deal with them. So we have found
it is better to be prepared. You have to make sure that you
charge enough on all your product to absorb the cost of these
kinds of customers. Seem unfair to the good customers? Maybe,
but you have to understand it is just a cost of doing business.
Taking back the earrings with the screw posts shouldn’t be the
end of the world. Can’t you just put them out at your next show?
Think of it as an inventory build up exercise. The other
question you have to answer here for your own sanity is what
approach are you going to take in terms of satisfying the
customer? I remember reading a story once about some woman who
bought a fur? coat at Neiman Marcus in their original store down
south. She wore it and ruined it somehow and came in and asked
for her money back. They gave it to her. And in the next year
she came in and spent more than a hundred thousand dollars in
there. So is the customer a pain, but if you satisfy her will
she come back and spend lots more? It sounds like she might.
It might be worth eating some of your profits on this to keep
working it out with her. The customer’s we find are the ones not
worth servicing as well are the ones who try to nickel and dime
you to death. If she had called you up and said she didn’t like
them but would you give them to her for less I would be more
suspect of her for the future than simply that she can’t make up
her mind about how she wants the earrings. Just remember that the
most serious mistake you can make in this business is charging
too little for your work. And you have to factor in all the
types of customers you are going to have.


#6

hi george,

i’m not sure what you are looking is a contract, i would think
it a matter of your own policy. when a customer commits to a
custom or special order by way of a deposit, they are commited to
what was discussed and what was understood to be made
specifically for them. they are also putting faith in you to
deliver what they have in mind.

of course there are many ways a miscommunication can occur. i’ll
usually do what it takes to make the customer happy in thiis
case, if reasonable. if it is a matter of the customer changing
their mind after the fact they should pay. if they don’t like
that idea, they are simply not being reasonable. it is part of
our job to communicate, in a nice way, why they should pay. give
examples from other industries, like kitchen remodeling. the
customer picked the color, you showed them a sample, and they
gave the ok.

sometimes it is better just to give the money back in certain
cases. i really hate to do this but i will in certain cases. it
may be more cost effective to spend your day working on the next
project than explaining something to a disgruntled customer, no
matter how ‘right’ you are.

if i were to write a contract, it might look something like
this:

  1. half deposit, non refundable

  2. any changes made after work has commenced, customer is liable
    for any changes, including labor and materials.

  3. labor is not refundable, under almost any circumstance.

not really something one would want to use as a sales tool, huh?

all this discussion is for retail. for wholesale, i would be
more tenacious on the 3 points above.

one bottom line is this: part of my job, a large part of it, is
to be sure people are happy with what i do. so, one must be very
objective about one’s own work. did the customer really
understand what we were going to do? is what i did what i said?

best regards,

geo fox