Accepting Less than the Agreed Price

Learning from experience: a cabinetmaker gets paid less than he is owed because of supposed defects the customer perceives in the product as delivered. September 29, 2014

Question (WOODWEB Member) :
I'm just starting out doing custom woodwork as full-time as I can. I have a small shop with some standard tools, and so far have been able to fill my time with small but interesting projects. I recently completed a single custom cabinet for a client's mobile home. It was made to his dimensioned drawing (he is a precision fabricator, and "has an eye for detail"). I designed what I thought was an interesting and functional piece, made a small maquette of part of it, showed him a drawing, and gave him an estimate for time and material cost. Upon finishing the installation, he told me that he thought there were a few things wrong with it, that it wasn't of the quality that he expected, and that he'd pay me less than what I was planning on billing for.

One thing that I'm sure to never do again: I failed to have him over to my shop to inspect the cabinet before installing it. We argued a bit, and the next day I settled for being paid less. I offered to take it back and correct the problems he saw. He insisted that it wasn't worth de-installing because in his eyes much of it would need to be rebuilt. I considered taking the cabinet back, but I didn't want to have to deal with a cabinet made for a specific place that I have no room for. So, I settled on being paid for about half of my labor, in the name of moving on from a bad situation and making at least a little money, rather than none. What would you have done?

Forum Responses
(Business and Management Forum)
From contributor R:
Either this guy was right, or you got ripped off. I don't know you or the client so maybe the cabinet was deficient and he had good reason to get mad. It is also quite possible he planned to screw you over all along and never pay full price. This is more common than you think. Next time write a rock solid contract and stick to those terms. When a project is substantially complete, you should be asking your clients if they have any concerns or punch list items. Now is the time to address any issues, not when youíre asking for final payment. This is also the time to go over your own punch list of what you plan to address before final completion. Open a dialogue and discuss this with customers. Also think about how you can better communicate what you intend to build in the planning stages. A concrete set of drawings/renderings/specifications can go a long way.

It is also good to state for example that wood may have natural traits which some may consider defects such as pin knots, sap pockets, mineral streaks, figure, etc. Also make it very clear that stain colors/grain will vary. Make it known that you are not promising a color match. Get an approved sample signed off for all finishes. I typically make a large sample, cut it in half, keep one, and give the other half to the client.

I cannot stress how critical communication is. Make sure customers have seen photos, and examples of your past work. Make sure they are buying your work, based on what they have actually seen, and touched. Not based on talk alone. All you have to do is produce work equal or better to your past work if this is the case. If you are starting out in the business this is a great time to do some personal work. Make sure to have some great examples on hand to show prospective clients. If your work truly isn't up to their standards whether they are reasonable, or unreasonable, it is better if you go your separate ways before you do business in the first place.

From contributor T:
Better to eat a little and have a satisfied customer than get in a shouting match. Lesson here is to explain your design ideas with enough detail as to establish realistic expectations. Easier said than done sometimes though. I have customers sign off on drawings and revisions and I take design changes by email only.

From Contributor W:
It would be real easy to say "Do this or do that" yet the truth is it has happened to me. It sucks and it is demoralizing. The real value here is the lesson, take the difference in what you got and what you wanted and quadruple it. Look at it as the price of an education. We require visual approval of all specs and construction before finishing or stains are to be done. If I need to fix something then it is the time. Remember (and I hope this is the case) he let you install it all the while knowing he was unhappy. All he got was lucky and he worked for it.

From Contributor O:
You were set up. You were taken advantage of because of your inexperience. I would remove the cabinet immediately and leave the area in the same state you found it. Refund any/all money in cash. Be firm and show resolve and purpose - do not let this guy push you around.

Refuse him the cabinet, telling him it is not worthy of his home. If he's not happy, you are not happy. If he insists on keeping/taking it, tell him it is the full price plus your additional time to deal with him, or you cannot leave it with him. He will reconsider. In hindsight, you should have never left it with him.

From contributor M:
I sympathize with you - no craftsman (beginner or veteran) wants to be shafted on his labor. What you want to do is to have a contract that calls for a deposit (40%-60%), a payment when your product is completed in your shop ready for delivery (all but the final 5%-10%), and then a final payment (minimal) due upon completion of installation. Two things resolve from this - first, you are ensured that the customer is satisfied that you manufactured exactly what he/she was looking for as they have to pay before the piece(s) leaves your shop. Second - you are guaranteed to be paid for all but your installation.

This should allow any issues of misunderstandings, lack of communications and/or failed expectations of what was ordered to be resolved before you take the time to deliver and install - putting the owner in the driverís seat since once it's installed he owns it and only a court order will legally allow you to remove it. Sad but true. Yes - most definitely have the clients come into your shop to inspect before you ever deliver. At least for new customers that you are unsure of as to what they may be expecting.

In this manner - you can only be shafted your installation fee. Sorry you learned a hard lesson - but better now on a smaller project than one that could have been much more devastating! I believe you did the right thing - avoiding confrontation is always best, even if it costs you. This guy may now be an asset as he may relay to other potential customers that though you made a mistake (alleged) and then took the proper steps to rectify it to his satisfaction. If he indeed was a snake and knew all along he was going to shaft you - then nothing you did would have changed what he would say to any/all that looked to him for a referral for your firm. Chin up and put this experience off as a "day in school". We've all been there and learned to shrug it off and move ahead, hopefully learning a bit and being better prepared to avoid the same thing next time around. Fingers crossed here!

From contributor I:
You don't seem to dispute the claim of problems with the cabinet in your post. Could you give us some details of the objections and can you honestly respond to his claim? You do mention that you offered to take it back and fix the problems. Were there problems? If there were, it should never have been installed. Word of mouth is the best advertising a new business can get. Installing lesser quality will kill a business faster than anything. Lesson learned I hope. I've been in some pretty nice manufactured homes. I sure wouldn't hold that against the customer guys.

From contributor C:
I have had the very same problem as you and I think we all have. It is a very good lesson to learn early on because you will grow from this experience! I had a client who ordered a custom built-in oven cabinet with pull out shelves for cookie trays and so on, but I neglected to take a deposit because I had done work for her before and she was aware of my skills and abilities. I admit I messed up on the Formica I used. It was supposed to be in a niche so I used an unattractive interior double sided plywood.

She decided to have it exposed and not install it in the niche. She had chosen a matte white which was unavailable pre-made and had to be special ordered. She took exception to the Masonite back I used (a standard item where I am) and the vents (plastic not stainless steel) upgrades all, none of which she paid for or ordered (it would also be covered by the ovens and therefor no one would ever know)!

She then proceeded to offer me less than a hundred bucks for it and said she would just have to live with the ugly Formica and the other defects but she didn't want to see me loose out completely, so I told her I appreciated her kind offer but I would rather she keep her money and used it to buy the cabinet she really wanted and this money could go towards another carpenter (her ovens were being delivered the next day)! I took the cabinet home with me where it sits to this day filled with odds and ends of my kids toys. Yes I ate my labor and materials but I didn't and don't intend to give my work away for free to a someone who would cheat me out of my work!

I learned a few very valuable things from that experience:

1. Always take a deposit!
2. Always put all the details down in the quote!

From the original questioner:
As for the mobile home - it is a mobile home he built himself, more like a cottage on wheels than a trailer. As for the cabinet, it was not defective in its functionality: the drawer opens and closes smoothly, it fits in its intended spot and maintains specified clearances and the cabinet doors open and close pleasantly. His problems with the cabinet were that there was some finish on the end grain of some facing that ended up uneven, the drawer warped a little bit after glue-up, and some cuts I made with a hand saw were slightly off-angle (45-degree slats facing a frame serving as a door).

All three of these things were issues that I did not consider important as they aren't visible without unusual inspection. These are newbie mistakes I suppose, because I'm a newbie - lesson learned. I offered to take it back and correct these things, but ended up receiving a condescending lecture on "where I am in my career" and "what it means to be a craftsman." By the time he was through talking, I was ready to get the heck out of there. It was obvious to me that I would never be able to meet his standards, and I don't particularly want to try at this point. Worst part: I never took a photo of it!

From contributor A:
Fifty percent of your labor is a hefty hit. Who came up with that number? If he gave you the take it or leave it routine I would have threatened him with a small claims suit for all of it. They typically think you are making 15-20% "profit" on every job. Obviously that is not the reality. They feel entitled to keep that "profit". I would have gone for a 10% discount and be paid in cash.

From Contributor O:
Since it was your first work, you were taken advantage of because of your inexperience. But donít worry, every works give you experience and this are the things that will help you exhale in future. People learn from their wrong deeds only. From next time onward have proper contract, and stick to those terms. Best of luck!

From contributor J:

Good responses here. Your choice to suck it up or buy it back, but either way shrug it off and take it as a lesson. What strikes me is that you went there with an idea of what to charge for the cabinet. It will help you to be a good bit more definite. Your eye will improve as you continue to work. You will get known for your level of attention to detail. Set your standards and show them honestly, then work to them. Fussier is not necessarily better, sometimes cheaper works just as well. It depends on your style and the expectations of your customers.

From contributor D:
You are starting out. It's a small job for a mobile home. From your tone, and tale of your rather easily agreeing to the compromise, I'd imagine your product likely had some legitimate issues. You are fortunate to learn this valuable lesson on this small job. You are further fortunate that you collected anything. Write it off to a learning experience and move on! What you have done here is paid a little "stupid tax". I know the feeling ever so well, for I founded the principle! Not any more though friend! I have Iron-Clad procedures in place now that keep me from getting burned. I haven't been burned a single dime in over ten years (knock on wood)!

All the advice in this thread so far is good. Use it all. The only thing I would add is: Always insist on a Delivery-Payment. Write your contracts to where you collect the lionís share of your payment when you deliver or arrive with the material. This is the customerís chance to inspect the work and accept or decline. If declined, it is much easier to fix before it is installed. If accepted and paid for, customer has no legs to stand on unless the installation is really botched up! I do 40%-50%-10% deposit, on delivery, and completion. Works like a charm!

From contributor V:
Try not to get in the habit of taking any less than what your estimate was for. If you're from a smaller area this could get around and soon a lot of customers may try to pull this stunt. The best thing you can do when a customer isn't happy with their cabinet/cabinets is to fix them so they are right and get paid the full amount.

From contributor F:
Never, under any circumstances, let the customer dictate your price! If they aren't happy, insist on fixing the problems or removing the cabinetry entirely depending on their level of dissatisfaction. There is nothing wrong with taking some constructive criticism from someone who's been around the block, but don't let them work it into changing your price. I would let this one go and refuse any future work from this guy. As stated above, get a good contract together and have everyone sign one for any work done. A good percentage to get is around 40% down, 35% upon completion and the remainder upon satisfactory installation....this way you only miss out on a max of 25% if this happens again.

From contributor E:
People think this business is about being a craftsman. Craftsmanship is 20% of the job. The rest is managing the business so that you make money and don't pull your hair out. Unfortunately, there is no easy way to learn this. On the top of my head, there are many lumps, and most of them correspond to the following lessons (the rest are from my wife):

-Sizing a customer and their project: You need to figure out quickly whether this is a reasonable, stable person with the budget for the work. If they are high-maintenance or squirrely, avoid them or bid so it's worth your while.

-Managing customer expectations: Document everything. Detailed drawings are critical, as are samples. Have them sign the drawings and any other detail samples. Contracts are critical too, but even if you have a watertight contract, it's usually far easier to make a client happy than to take them to court.

-Underpromise, overdeliver: Make conservative estimates on delivery times, then deliver on time or early. Always exceed their expectations in terms of quality and workmanship. This method is far less expensive than disappointing a client then redoing the work.

-Don't assume they know what you're talking about: Draw it, make SketchUp models and show them samples.

-Stay away from bottom-feeder work.

I know you're hungry. But think about whether your time would be better spent marketing and selling bigger, high-quality jobs than replacing that rotten sink cabinet for $200. Are you going to put that project in your portfolio? If not, maybe spend your time building your website and talking to general contractors, or dropping flyers door-to-door in good neighborhoods.

From Contributor K:
We've all been in this situation before - all hard lessons learned. Don't worry about money left on the table, worry about moving forward. Contributor E is 100% correct. Learn how to size up your customers and their projects quickly. If you don't feel good about the project or the client, cut them loose. I know, it stinks turning down a project, but in the long run it is the way to go. Some of the best moves I have made as a businessman are turning down a few specific jobs. It actually feels good to tell people "no". People hate being told no. If they really want you for their project, they'll change their tune quickly. The couple of times I had people beat me down on agreed upon price on delivery, I took the piece back and told them their check will be in the mail. Odd... I never had to send that check.