Out of state instrument sales

[MaestronetLurker]

I'll be traveling to an event out of state and will have some instruments displayed for sale, and am wondering about best practices for handling sales under these circumstances. This will be the first time for me offering instruments for sale as a maker rather than through a shop. I've heard of issues of difficulty recovering property across some state's borders when someone doesn't pay. I'm also concerned about how best to deal with money without getting swindled with a bad check or something. I'm just more concerned overall about working with strangers out of state as opposed to dealing with locals.

Any suggestions on best practices on the financial end of the transaction?

[Jeffrey Holmes]

Stiff upper lip.  

 

There is always some risk involved in transactions of any kind...  I'm sure you know your clients, but a "local" can still run off to Alaska (or the Canary Islands) with your fiddle.

 

I'd suggest you educate yourself about interstate trade laws as you'll be showing in another state (not just shipping an order to it).  That state's sales tax most likely applies to any transaction initiated there.  In addition, contact your insurance carrier and see exactly what you're covered for.  I suppose you could take deposits on a credit card to mitigate some of your risk (I don't).  You could make sure any approval document you use is enforceable in that state as well.

 

Lastly, use logic and references to ensure you know a bit more about who you're dealing with.

[Dwight Brown]

A lawyer and a good contract would be an idea.  Expensive, but probably the right approach.  Cash is nice too :-)

 

DLB

[gowan]

I'll be traveling to an event out of state and will have some instruments displayed for sale, and am wondering about best practices for handling sales under these circumstances. This will be the first time for me offering instruments for sale as a maker rather than through a shop. I've heard of issues of difficulty recovering property across some state's borders when someone doesn't pay. I'm also concerned about how best to deal with money without getting swindled with a bad check or something. I'm just more concerned overall about working with strangers out of state as opposed to dealing with locals.

Any suggestions on best practices on the financial end of the transaction?

 I am probably uninformed but doesn't PayPal have built in protection for both buyers and sellers?  If so you could have the payment done on PayPal with some confidence that you'll get paid.

[not telling]

OT a little but would anyone be willing to post your approval paperwork?

[Michael Richwine]

Go to https://squareup.com/ and get one of their credit card readers that plugs into a smart phone. Insist on cash or a credit / debit card transaction, no checks unless that person is known to you.  That's pretty much what I do at festivals and other out-of state gatherings. 

 

BTW the rates with Square are far better than I was able to get when processing a card through a bank, and the money's in my bank account in about 2 days.

 

There are other smartphone card readers, but I know Square, and have good experience.  The difference in processing charges pays for my smart phone. PayPal is an option, too, but I'd rather not depend on them. (I use them for payment overseas a lot.)

 

If you allow an approval period, then just reverse the charge when you get the instrument back.

[DarylG]

That's pretty neat Michael, thanks for the link!

[Wee B. Bridges]

Any suggestions on best practices on the financial end of the transaction?

 

Yes, credit card is the way to go. Square or Paypal card readers are free.

 

PayPal is a little less % per charge.

 

You always want to make it easy for people to give you money !

[MaestronetLurker]

thanks for all the good suggestions.  Also interested in approval paperwork as Not Telling suggested.

[not telling]

The maker my husband worked for, Ken Beckmann, never charged the credit card or anything. It was all judgment. References, who the player is (i.e., a professor's kid or the star student of a KC Symphony player probably won't steal a violin). Of course there was legal paperwork too. But right down the street Mike Richwine apparently does charge the cc. So there isn't just one way.

If someone scratched the instrument while it was out, the player wasn't charged. This would make me uneasy to have no policy about how serious the damage would have to be for the player to be responsible, but this policy never backfired in a serious way, though no doubt there was a clause to cover the possibility. Also, instruments were $10000-20,000 range, not much more than that. Approval could be for a month if I remember correctly. Outfits like Robertson's (for one well-known example) allow only a week, so there is a lot of variability in these policies.

I definitely wonder about everyone's unique approval processes but I knew when I was asking that it was a lot to ask.

[Michael Richwine]

Here's what I use. Simple, but has proved sufficient for about 20 years.  I adapted it from my previous employer, and it's due for some revision now, since the web site is almost ready to open. Up til now, my market has been mostly word of mouth, but I'm going to be dealing with a lot more strangers soon.

 

I generally allow one week approval from the time the customer receives the instrument. I usually have a fair amount of conversation with the customer and can usually tell when I'm getting scammed, which is very rare. I do business all over the US, and in several other countries. When shipping internationally, I get full payment in advance and if a fiddle were ever to come back, I'd just refund the transaction.

 

Mind, I mostly sell instruments under $10,000, mostly well under, so my exposure isn't great.

 

 

approval-form.pdf

[not telling]

That's a nice idea to allow rentals to go out on approval and to automatically move into the rental schedule after the first week. Thanks for posting your paperwork. Simple and straightforward!

Looks like you are protecting yourself well with this too, with a clear way to charge consumers for any damage to the instrument if necessary.

[Smith]

.

[Michael Richwine]

That's a nice idea to allow rentals to go out on approval and to automatically move into the rental schedule after the first week. Thanks for posting your paperwork. Simple and straightforward!

Looks like you are protecting yourself well with this too, with a clear way to charge consumers for any damage to the instrument if necessary.

 

I don't do rentals, and wouldn't send rentals out on approval anyway.  No point - If I did rent, customer could swap instruments or upgrade size anytime.

 

I just put that provision in to have some leverage if a person is slow returning an instrument, or flat doesn't return it. Charging them 1/12 of the sales price until they return it is pretty good incentive! Actual violin rentals around here are on the order of $20/month. In my case if a person hung on to a $2400 instrument, I could charge them $200/month rental until returned.  Never had to do that yet, but.....you never know.

 

I agree than violin people are honest and trustworthy for the most part. It's the exceptions that are a problem, such as the one mentioned in another current thread.

[Elaine]

Don't forget sales tax in the State in which the sale is made.  You will want to check the State Taxing authority's website for the particulars. 

 

Elaine

Oklahoma

[Michael Richwine]

Kansas is easy:

 

Out-of-State Sales

If the retailers sells merchandise to be shipped or delivered to the purchaser out-of-state, then the sales is considered to occur out-of-state, and no Kansas sales tax is due. The out-of-state purchaser may owe compensating use tax in the state where the purchaser is located.

Example:
A South Dakota resident places a telephone order for office supplies from an office supply business in Lawrence, Kansas has the order shipped to South Dakota. This is considered out-of-state sales and Kansas sales tax is not due. The South Dakota purchaser may owe compensating use tax to the state of South Dakota.