Here's my $0.03 (with inflation):
At the retail customer level, never, ever, ever, ever pay in full up-front for anything, unless you absolutely have to, or don't care if or when you'll get it, or what it will look like!!!
I have done quite a bit of home remodeling over the years with a few contractors, in some cases using the same one three or more times. I never, ever pay more than 30% up-front. Progess payments are fine, as well as paying for change orders in full once the project is launched, but if you pay it all, you have zero leverage. Once the final payment is made, I can virtually guarantee you that you won't be getting more work done withut paying additional monies.
Now, at the business-to-business level, often, special runs are partially paid for in advance, but in my experience, that's generally just the "tooling cost" and the goods are not paid for until received and inspected (again, no leverage to get satisfaction if you'd already paid in full).
While I'm sure that some unique products can command full payment in advance (i.e. Herse, etc.), they are by far the exception to the rule. Most things that we order can be supplied by other sources, and are, to varying degrees, a "commodity."
Good ol' eBay is a different kettle of fish: you have a reputable third party that is involved from the start, and can help enforce legally-binding agreements and help resolve disputes, even covering buyers' losses up to a point. Other Internet sources like rbm are even looser: often, you are sending money up-front based on a verbal description of an item. In such cases, you are relying 100% on your trust in the seller (which is a beautiful thing when it works, and it does work about 98% of the time in my experience - gotta love the way the Web can bring people together in a good way...).
Cheers,
Greg "trust is great but, unfortunately, money talks" Parker A2 MI USA
From: CYCLESTORE@aol.com
>
> Date: Wed, 18 Dec 2002 01:34:07 EST
> To: classicrendezvous@bikelist.org, CYCLESTORE@aol.com
> Subject: [CR]Re:CR Never Pay first for a Picchio
>
>
> In a message dated 12/17/02 1:06:59 AM,=20
> classicrendezvous-request@bikelist.org writes:
>
> Snip <<Message: 2
> Date: Mon, 16 Dec 2002 12:46:33 -0800
> From: "Arthur Yow" <art_yow@flad.com>
> Organization: Flad &Associates
> To: Classic Bike Rendezvous <classicrendezvous@bikelist.org>
> Subject: [CR]Picchio Bike Frames
>
> Picchio's were particularly impressive to him, but unknown in the
> states.
> I travelled to Italy and met with Signore Picchio at his shop in Torino.
>
> I ordered two of his road racing frames (which took almost a year for
> delivery! never, never, never pay first and wait for a bike frame from
> any shop!).
> Picchio is an old master frame builder, very respected in Italy. I
> believe that he has mentored several notable Italian frame builders.
>
> As for handling, I am selling my classic Colnago of the 80's, but not my
> Picchio; it handles beautifully, despite its tight geometry!!!
> Ciao!
> Art Yow >>End Snip
>
> Howdy Art &All,
>
> I too have seen a few Picchio's and was very impressed. On the "never,=20
> never, never pay first and wait for a bike frame from any shop" comment
> I=20
> must ask, did you feel that paying first slowed the delivery (a year for
> two=
> =20
> frames/bikes)?
>
> I assume you were dealing directly with the frame builder. It seems with
> th=
> e=20
> end product you were very satisfied. It would be anybody's disappointment
> to=
> =20
> order something special and wait a year if much less delivery time was=20
> expected.
>
> In the bike business some small vendors require not on some money up
> front=20
> but all the money up front. The reasons vary but even very large
> vendors=20
> require advance payment for special projects from customers that they
> have=20
> had few dealings with.
>
> It has been my experience if you want a very special product, something
> buil=
> t=20
> to measure or ordered and built with you in mind, and you have no
> previous=20
> relationship purchasing such an item it is generally money up front and
> wait=
> =20
> a good while. The time element on hand built products depends on the=20
> backlog. If you want something sought after (a Richard Sachs product comes
> t=
> o=20
> mind) and someone is ahead of you well, you wait your turn.=20
>
> Even simple things you might want that are easily available in some form
> fro=
> m=20
> someone else can take a while. I was suprised to learn this summer a
> good=20
> friend and home towner of esteemed list leader Dale Brown (and friend of
> me=
> =20
> self too) would drive 80 miles to my shop for some routine cycle service
> not=
> =20
> because Dale's shop didn't do great work, but was backed up six weeks with
> a=
> n=20
> appointment to get a spot. Our shop was only four weeks out so he got in
> hi=
> s=20
> car. As they say a nice problem to have; maybe.
>
> When I got my Rene Herse I made two payments based on the original
> estimate.=
> =20
> One was $2000.00 and by the time I got home after vacation (a month, it
> was=20
> good one) the remaining balance. It took a few weeks to write a little
> lette=
> r=20
> with a couple of accessory (bag, etc.) add-ons. It was good I sent the
> money=
> =20
> because they didn't start building the bike until they received the
> final=20
> payment and it took about eight months for delivery. The bad news in
> the=20
> cost went up nearly 10% (about $400.00) between order date and final
> payment=
> .=20
> Why exchange rate fluctuation, sometimes you win, sometimes you loose.
>
> Anyway, we have bikes made up all the time, production and custom in our
> sho=
> p=20
> often with long waits. We use a variety of payment and credit
> arrangements=20
> but we find that paying in full (or charging in full) is many times
> better=20
> for the customer and everyone involved. The paper work and chance of=20
> miscommunication (especially on the price) is less. Vendors often offer=20
> better prices with up front payment and this is also a hedge against price
> o=
> r=20
> currency rises or component price increases over the build cycle. Even
> very=
> =20
> large deposits will cause substantial negative cash-flow that cannot be=20
> maintained unless margins are much, much higher than needed with payment
> up=20
> front. When margins and handling are reduced and this can save money and
> som=
> e=20
> times move you up in line for delivery as priorities are adjusted during=20
> production too.
>
> Most of the products that we covet on this list are purchased preowned
> and=20
> they is minimal delay for delivery, payment is usually arranged up
> front,=20
> standard procedure. These same products may have taken many months to
> be=20
> delivered in new condition by comparison. =20
>
> Anyways, I have found over time my taste level (like many of you on this=20
> list) in bikes has grown substantially and just average or even very
> great=20
> will hardly do. Anything really nice and special has to be just so. So
> when=
> =20
> I want a certain bike, I save, then pay and wait as long as it takes to
> buil=
> d=20
> it. This spring I got my next to last "special bike built" and it arrived
> i=
> n=20
> May promptly after being ordered the previous October. My latest
> "special=20
> bike" was a production number with a custom color but took eleven months
> to=20
> source, order, import, modify, and customize, before I was able to use it.
> I=
> t=20
> still is being modified (to plan I might add) and customized. The time
> it=20
> takes to do this correctly (in my simple mind) is what makes cycling so=20
> wonderful. There is little time pressure except self imposed on these
> types=
> =20
> of projects but commercially they would hardly be viable. It would be
> like=20
> charging for art where I am the only customer.
>
> My suggestion, it matters not how you pay for something or when as long
> as=20
> your supplier is reliable on delivery and you get what you want at what
> you=20
> expected to pay for it. If you want something truly special from a
> craftsman=
> =20
> allow him/her/them time to do a proper job and don't be put off by
> delays,=20
> they can be inevitable (and if you worry about inevitable; game over man!)
> =20
> Most of the end users benefit as a real craftsman will not want to turn
> out=20
> any work prematurely unless demanded to do so.
>
> Yours in Cycling,
>
> Gilbert Anderson
>
> NORTH ROAD BICYCLE COMPANY
> 519 W. North St.
> Raleigh, NC 27603
> Toll Free : 800=E2=80=A2321=E2=80=A25511
> Local : 919=E2=80=A2828=E2=80=A28999
> E-Mail : cyclestore@aol.com