Architect Archive
Thread: Deposits / Downpayments
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ZenDragonMLS
Sat Jan 24, 2004 3:51 pm
#1
No, this thread is NOT to rehash anything going on in any other threads! 
This has been something that I've been thinking about for awhile and thought I'd get the opinions of other architects out there.
Quite often I'll get a message (email or tell) with something like "hey, I need 3 BER13 heavy mineral harvs" or "I need a medium naboo house". That is, for some item that I typically carry and for which there is a very "liquid" market. My response is usually some varient of "great - I already have that on my vendor" or "I'll make that for you and it will be on the vendor in a few minutes" or sometimes "I'm out but I should have those stocked by tomorrow night".
And typically the person swings by and buys it from the vendor. Now sometimes they were "just shopping" (as it turns out) or they "change their mind" after ordering it. With stuff like this I've never worried - it isn't going to take more than a few days to move off the vendor anyway - no big deal.
However, there are various items around (e.g., PA Halls) that don't seem to have a big market. And some of the city buildings (specificially City Halls) where the market is *very* limited (due to the caps on the number of cities). These things also tend to take a hefty chunk of resources that I'd rather not divert from other things unless I'm getting paid for them.
So when someone I know and have dealt with says "hey, can you build me a Tat Guild Hall", I say "sure" and just build it for them - because I know that they are an honorable player. But when I get a random request from someone I don't know for these types of things I tell them up-front "Yes I can build that. Yes I have the materials in my hands right now, so I could have it for you within 5 minutes. But that is a speciality item without much market so I ask for 50% of the price upfront. As soon as I get the money, I'll build it, and then the rest is due on delivery."
I've never had anyone kick about this. I (fortunately) have never had anyone pay me the 50% and then not show up to claim it. (Although that you can argue that the *reason* they didn't back out of the deal is that they had so much skin in the game.) So all has gone well.
But it has always my intention that, once they pay the money and I actually make that item, that money is mine no matter what. So if I get a message a day later "I changed my mind - I don't want that city hall" then I at least didn't eat the resources to make it.
What do people think of this approach? Am I being too paranoid? Is this a bad business practice?
This has been something that I've been thinking about for awhile and thought I'd get the opinions of other architects out there.Quite often I'll get a message (email or tell) with something like "hey, I need 3 BER13 heavy mineral harvs" or "I need a medium naboo house". That is, for some item that I typically carry and for which there is a very "liquid" market. My response is usually some varient of "great - I already have that on my vendor" or "I'll make that for you and it will be on the vendor in a few minutes" or sometimes "I'm out but I should have those stocked by tomorrow night".
And typically the person swings by and buys it from the vendor. Now sometimes they were "just shopping" (as it turns out) or they "change their mind" after ordering it. With stuff like this I've never worried - it isn't going to take more than a few days to move off the vendor anyway - no big deal.
However, there are various items around (e.g., PA Halls) that don't seem to have a big market. And some of the city buildings (specificially City Halls) where the market is *very* limited (due to the caps on the number of cities). These things also tend to take a hefty chunk of resources that I'd rather not divert from other things unless I'm getting paid for them.
So when someone I know and have dealt with says "hey, can you build me a Tat Guild Hall", I say "sure" and just build it for them - because I know that they are an honorable player. But when I get a random request from someone I don't know for these types of things I tell them up-front "Yes I can build that. Yes I have the materials in my hands right now, so I could have it for you within 5 minutes. But that is a speciality item without much market so I ask for 50% of the price upfront. As soon as I get the money, I'll build it, and then the rest is due on delivery."
I've never had anyone kick about this. I (fortunately) have never had anyone pay me the 50% and then not show up to claim it. (Although that you can argue that the *reason* they didn't back out of the deal is that they had so much skin in the game.) So all has gone well.
But it has always my intention that, once they pay the money and I actually make that item, that money is mine no matter what. So if I get a message a day later "I changed my mind - I don't want that city hall" then I at least didn't eat the resources to make it.
What do people think of this approach? Am I being too paranoid? Is this a bad business practice?
Serenity19
Sat Jan 24, 2004 4:19 pm
#2
As long as you make it perfectly clear that it's a non-refundable deposit, I don't see any problem with what you are doing. I usually charge 10% and send an e-mail outlining my policy. Usually, I have them give me the deposit right before final assembly and I haven't had any problems. For City Halls and other big ticket items that are hard to sell off my vendor, I have them come to my shop and I do the final assembly while they are standing next to me, which seems to cut down a lot on people changing their mind.
Hunden
Sat Jan 24, 2004 9:02 pm
#3
guild halls and city halls and other structures (shuttle port has 15 walls in it as well) are a huge investment for any architect.
we all know that.
if explained the this risk needs to be shared between the two parties involved, the buyer and the seller then thats not a bad idea.
the alternitive is to not build them, politley refuse to make the item. thats what i do. for me its not worth it
AnnanaisX
Sun Jan 25, 2004 2:22 pm
#4
I've started to do a good trade in city halls and guild halls over the last week and I always ask for a deposit. Everyone I've dealt with has been fine about this. I tend to ask for about 10%.
Annanais
Master Architect
Azmodean
Sun Jan 25, 2004 2:36 pm
#5
I always keep my vendor stocked with City halls and PA halls and such. Sure they're a huge investment... but it seems to help business when people know that your vendor is always stocked with such things if they need them. It delays your restocking for a bit... but I dunno. I'd rather enjoy my reputation for having a vendor that's never empty than be one of the other 23932001932890132910 architects that never seem to have anything other than small houses.
PsychoticChipmunk
Sun Jan 25, 2004 2:48 pm
#6
As long as both parties agree and actually hold up their ends of the bargain downpayments are fine. I'd buy from you withyour policy anyway.
ZenDragonMLS
Mon Jan 26, 2004 3:28 pm
#7
Putting aside the issue of the *size* of the downpayment / deposit for a minute, I want to make sure that the *purpose* of it is clear (to myself and to my customers).
My purpose in asking for a downpayment is to ensure that, for a custom or "non-liquid" product, I will be compensated for the cost of my resources invested even if the buyer changes their mind.
In cases where there is negligable resource investment (e.g., a custom labeled statue) then I judge it not worth the fuss to ask for a deposit. If they back out, I'm not out much.
In cases where it is a "liquid" product (e.g., harvester) then I don't ask for a deposit since I know that I can always sell it. I might be a bit inconvenienced by the whole thing in terms of building something (e.g., a gas harvester) when I intended on building something else with those resources, but I'm not going to ask for a deposit to cover my "inconvenience".
And if someone gives me a deposit for a big-ticket, non-liquid item (e.g., City Hall), my sense is that the deposit is only active once I have actually burned the resources. By that I mean if someone says "Here is the deposit, please build me a City Hall" and 10 minutes later they say "I changed my mind - I don't want it", then again I look to my resource cost. If I built it immediately after they asked for it and consumed those resources, then the deposit is mine. If I hadn't gotten around to it yet, so I really have NOT consumed those resources, then I'd refund their deposit immediately. After all, I set up the deposit to protect against wasted resources. If I haven't used them then there is no charge.
My purpose in asking for a downpayment is to ensure that, for a custom or "non-liquid" product, I will be compensated for the cost of my resources invested even if the buyer changes their mind.
In cases where there is negligable resource investment (e.g., a custom labeled statue) then I judge it not worth the fuss to ask for a deposit. If they back out, I'm not out much.
In cases where it is a "liquid" product (e.g., harvester) then I don't ask for a deposit since I know that I can always sell it. I might be a bit inconvenienced by the whole thing in terms of building something (e.g., a gas harvester) when I intended on building something else with those resources, but I'm not going to ask for a deposit to cover my "inconvenience".
And if someone gives me a deposit for a big-ticket, non-liquid item (e.g., City Hall), my sense is that the deposit is only active once I have actually burned the resources. By that I mean if someone says "Here is the deposit, please build me a City Hall" and 10 minutes later they say "I changed my mind - I don't want it", then again I look to my resource cost. If I built it immediately after they asked for it and consumed those resources, then the deposit is mine. If I hadn't gotten around to it yet, so I really have NOT consumed those resources, then I'd refund their deposit immediately. After all, I set up the deposit to protect against wasted resources. If I haven't used them then there is no charge.
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