Posts
4040
Joined
8/15/2010
Location
South Central, PA, USA
Edited Date/Time
6/3/2012 9:29pm
Was wondering how you guys (preferably business owners in moto) would handle the following situation. Vitards need not respond, Thanks in advance 
I decided to have some custom made parts made from a very well known motocross company, which will remain anonymous. I spent around $6,000 to have these custom parts made and was told they would arrive within a certain timeline. Today marks the end of the second week past the deadline, and the company is just now (after I sent an email last week) going to start making the "final batch" of products that I ordered. I ordered three different parts with a fairly large quantity of each. So by the time the last parts are made (if they even will be) it will be three full weeks past the deadline, and they have to be shipped to the US distributor (3-7 days I'd assume) and then sent to me (another week roughly). So over a month late...
For the time line they gave me they said they will arrive in x-y weeks. On week x (over a month) I emailed asking how things were going because I hadn't heard anything since I spent the money. The owner responded a few days later and said that the parts were going to be made next week. So i was cool with that. Well early last week (1 full week after week y) I emailed again because I wasn't happy, to say the least. Then he responds again saying production will start next week (probably Wednesday or Thursday of this week). When I heard that I said, "Okay, do me a favor and just cancel the order and send me my money back" (not aware that they already made two of the batches....or so he claims). Then he responds saying he already made two of the batches, and only the third batch will be made this coming week, but he asked if I'd like to cancel the third batch.
Then I basically said pics or it didn't happen and he has yet to get me proof of the existing products that were made.
So how would you handle the situation? Would you cancel the order by calling the credit card company, or would you say I'll take the parts if you'll compensate me x amount per week they are late, or what suggestions??
I decided to have some custom made parts made from a very well known motocross company, which will remain anonymous. I spent around $6,000 to have these custom parts made and was told they would arrive within a certain timeline. Today marks the end of the second week past the deadline, and the company is just now (after I sent an email last week) going to start making the "final batch" of products that I ordered. I ordered three different parts with a fairly large quantity of each. So by the time the last parts are made (if they even will be) it will be three full weeks past the deadline, and they have to be shipped to the US distributor (3-7 days I'd assume) and then sent to me (another week roughly). So over a month late...
For the time line they gave me they said they will arrive in x-y weeks. On week x (over a month) I emailed asking how things were going because I hadn't heard anything since I spent the money. The owner responded a few days later and said that the parts were going to be made next week. So i was cool with that. Well early last week (1 full week after week y) I emailed again because I wasn't happy, to say the least. Then he responds again saying production will start next week (probably Wednesday or Thursday of this week). When I heard that I said, "Okay, do me a favor and just cancel the order and send me my money back" (not aware that they already made two of the batches....or so he claims). Then he responds saying he already made two of the batches, and only the third batch will be made this coming week, but he asked if I'd like to cancel the third batch.
Then I basically said pics or it didn't happen and he has yet to get me proof of the existing products that were made.
So how would you handle the situation? Would you cancel the order by calling the credit card company, or would you say I'll take the parts if you'll compensate me x amount per week they are late, or what suggestions??
In the case that there is no contract, can I walk away? Normally I wouldn't just walk away, but they will arrive over a month late, so I basically gave them a month and half interest free $6,000 loan...
And it has already started to cost me business. I have slowly been promoting the products, and now I can't deliver when I said I should have them.
EDIT: Ooops, just noticed that you payed up front. Tough to walk away when they have your money already. Not going to win that battle, period.
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What about having them ship these supposed 1st 2 batches they have made to you immediately so you can start getting them sold, and have them send the 3rd batch as soon as its done? I know you probably want it all done at once, but better to have some of the product than none at all.
Plus the parts generally are sold together. I could probably sell a few as they are; however, generally these are bought together. I know I"m being general but I'm doing so to protect the company's reputation.
And yes, I would be able to find at least one or two other companies to do the job for around the same price.
And I didn't outsource. The company I went through is in the US, but all orders are made at their original factory (overseas). A machine shop couldn't make the parts, and they aren't made in China or Japan either; They are made in Europe, not Asia.
My biggest concern here is if the first two batches were even made or not. If they were made, why can't he get me pictures. And if they weren't made yet, at this point I'd just rather cancel the order all together.
Just some business advice. If your going to import, outsource, pay in advance, lets someone else work with customs, ect. ect. ect. you are asking to get your ass ripped off. Europe, Asia, anywere. It doesn't matter if this works out or not, here is where you fucked up.
1. You paid a US company 100% in full to make a product overseas.
2. You are doing it on suck a small amount $6000.00
3. You expect people to meet deadlines on things that are not in your control.
4. You used no business tool, proforma invoices, terms, ect.
5. You are not importing it yourself. Using your freight forwarder, ect. ect.
6. US Customs does not even know who you are and you are selling imported, outsourced products that are imported by another US company? Who are you?
Answers of why.
1 and 2. I promise you if you are dealing in your state, you will never get ripped off for $6000 and you will never get ripped off for $100,000. Why, If it is less than $12,000 then your state government, police ect. takes care of it. If it is over $12,000 as far as the state is concerned it is federal. As far as Federal is concerned if it is less than $75,000 they can't do anything.
If they are in a different state than you then it is federal. Are you going to go to spend $40,000 in Federal court to get your $6000.00 Back?
2. Deadlines, and broken promises are the nature of any type of contract business, domestic or abroad. You are worried about your deadlines and the consequences of not meeting them. No one else, though maybe apathetic are not concerned with your deadlines. They are only concerned with theirs and the consequences of not meeting theirs. Ironically, you are the one that makes those consequences for them. But wait, They are paid in full. Whats the consequence?
3. This is your link to your terms, agreements ect. In your terms could be your financials of Cash against Documents ect. But you are not importing it. You are paying to have it manufactured. Wrongly, as I'm trying to explain to you. You needed to work with some kind of terms, that specifies, deadlines and penalties outlining your agreements and monetary exchanges.
4. If you are going to import something. Then do it all the way or get some kind of terms. Never share a container, space or crate with someone else on their expense and name.
These parts must be small and not on a conainer. Are they shipping DHL or something?
I think you need to play it cool. Dropped deadlines are a fact of life. Don't relay on someone else to meet your deadlines, make them meet yours. Don't do business with an out of state company for a small amount. Find a book on importing and how things work. Find a good freight forwarder to do your importing and documents for you. Never share container, space, crate with someone else on their expense in their name.
5. Never pay in full. Never pay downpayment in cash, and get with your bank and ask them to set you up with something in order to do transfers with cash against documents.
6. I think you need to play it cool. I don't care who they are, good business or bad, you gave them all the tools to take your money and say fuck off and there is not a damn thing you can do about it. You need to learn how to do things the right way, chalk this up, consider yourself lucky if it all works out good and protect yourself better in the future. Not get pissed off because, not matter how you see it now. You created the situation you are in without knowing any better. Learn from it and cross your fingers it works out this time. Delay? Huff, fact of life, get used to it or carry way way way more inventory than $6G.
I do not a mx company, dealership, etc and so the 6K in inventory is more than enough for a small investment by one person.
The point of them being from Europe and not asia is that the guy was basically making it sound like I just wanted cheap labor, which is generally associated with asia. I would have had them made in the states if they would have done it...they wouldn't.
You may want to try a different vendor who will agree to get paid upon delivery (or 1/2 and 1/2,) and also consider ordering earlier in your production schedule.
Good luck with your product!
Pit Row
Point is, they have not ripped you off as of yet and hopefully they don't decide to. I told you why they could rip you off and how. You can say I will get my money back and have the desire to do so but that does not make it happen. All they would have to say in response to an $800 letter prepared by your lawyer is they sent the money to their vendor in Europe and they dropped the ball on sending product. Even if they own the company in Europe it is still a different entity. Where are you then? Owed $6000 from a company in a different state, who is owed money from a company in a different country. I know you are not going to international court. If you are thinking Attorney General, they do not help business to business transactions. There is no one there to help you. I could be wrong in some bizarre instance but I know from experience that unless provable fraud is involved, ripping someone off is not a punishable crime. You have every right in the world to make a bad decision or a mistake and anyone has has the right to benefit from it.
I'm saying learn from this. Protect yourself better in the future. Don't swat at the bees nest because if things go array, you have not aligned yourself to get your desired final outcome in a dispute. Be patient and if they are as reputable as you say they are, I'm sure things will work out. But If you choose to listen to anything at lest know that as far as legal protection, you are working on their terms and their time frame and you are the one that gave them power to do so. I wish you the best of luck.
Anyway, I paid with a credit card so hopefully they will take care of the problem if it gets to that point. I don't think they are ripping me off (not going to send the parts), I was just wondering if people think I should cancel the order, or ask for some sort of refund.
What I would do is send the guy you are dealing with an email. Tell him that after your last conversation...? ... that you are trying to readjust your prior sales projections that have to be altered by the delay. Explain to him that it would be extreamly helpful to you if he could narrow down a projected date that the products will ship. Tell him that you would like a status report from him on Thursday or before because you want to contact your customers on Friday to coordinate the new schedule with them and you don't want to have to alter it twice on them.
This does a few things for you. First it shows you have sales, It shows a little patience on your part and that you are willing to give him the chance to make things right because I'm sure he is well aware you are disappointed. It allows you to know if they guy really is trying to take care of you. It allows him time to maybe get a real answer from production. If he doesn't get back with you by Thursday, I would call him on Friday and ask why. I would then base the decision of what my actions should be upon that conversation. But in that conversation, I wouldn't be confrontational. I would want to know the answers to questions based on.. Why, How come, Because of, and is this normal and what caused this. Then I would go with the can you questions.
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