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sharing my business experience

Discussion in 'General Business' started by Ethan Alvin, Jul 19, 2014.

  1. #1
    Hi All,

    Just thought of sharing a recent experience with a client.

    I own a content creation company and have always practiced the policy of receiving the payment first before starting work. The reason for that is to protect my writers as it is fairly common for clients to disappear after receiving the content (bad experience and widely known). I used to offer free trials but realized that there are a lot of cheapskates out there exploiting this to get free content.

    I have this particular client from UK (claims to be no.1 in his industry but highly doubt so) who has been complaining about this policy from day 1. As he is a regular, I decided to trust and allow him to pay after the completion of the work since it is a weekly small order. On top of that, he pushed down the price and I decided to accept his order out of the "good" working relationship and his occasional bigger orders (still very low profit margin), without placing any focus on him.

    Just earlier this week, he emailed me a big order and I asked him for the payment first.
    He then "kindly" asked me if he should make the payment first and I told him I'd appreciate it if he could (subtly telling him that he should). In the same email, I told him about the deadline. He then replied, "Sure." With that, like always, I proceeded with the order.
    Our arrangement has been based on trust.

    There was no payment from him and I then sent him a paypal invoice, which of course, was ignored like always. He always rushes me for his orders (although on track), and then takes his own sweet time to make the payment (could be up to a week).

    Just 2 days before the delivery date, he emailed me to stop the order, said his partner will be writing the content himself instead. I told him that it doesn't work that way as my writer was already in the midst of generating the content. He then replied that as he didn't pay, the order should not have started. He then insulted me, calling me a liar out to cheat his money, claiming that my writer did not write anything, and that I was simply delaying the delivery so that I could get my writer at that moment to produce some content for him to pay.

    As my writer was offline and it was already 11pm (my local time), it took me several emails to explain to him why I couldn't send him the articles immediately (enduring the repeated accusations). As soon as my writer submitted the content to me, I then forwarded it to him, and then based on our agreement, he will only pay for those written.

    Well it's been more than 24 hours and he has still not paid up.

    Lesson learnt? As I'm dealing with international clients, it is not possible for me to hunt them down at their physical offices. It can of course swing both ways. I will drop this client for sure, as this is not the first time he has made trouble.

    I think it is a skill to manage clients, and giving them leeway. This is a skill that I'm still learning.

    Thanks for reading guys.

    Alvin
     
    Ethan Alvin, Jul 19, 2014 IP
  2. Helge Sverre

    Helge Sverre Notable Member Affiliate Manager

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    #2
    As a freelance web dev, I am very hesitant to trust clients, even local clients, I think there is just something about people's perception of what I do that they don't get, what I do takes a serious amount of time, skill and experience, it is going to cost you 50-200$/hour(depending on the experience level) to get a website done, so when i see this:

    I really want to punch people in the fucking face.
    [​IMG]

    Related:
     
    Helge Sverre, Jul 20, 2014 IP
  3. jrbiz

    jrbiz Prominent Member

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    #3
    It is just as difficult with product sales. Because of shipping costs, I mostly only sell networking cables within the U.S. For new clients, I insist that the first few payments are cash in advance. Over time, and with a credit check, I will give a client NET 30 terms. I used to not actually do the credit check in the early years and it cost me thousands of dollars one time. I had a "client" who placed and paid in advance for 3 or 4 orders of a few hundred dollars and then asked for terms, which I gave him. He then put in an order for thousands of dollars and, as you may have guessed, completely disappeared. Really hurt my business back then, but it was a good lesson.
     
    jrbiz, Jul 20, 2014 IP
  4. NetStar

    NetStar Well-Known Member

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    #4
    It seems like your lesson was already learned.

    I have also been burnt in the past as well. Similar scenario. Then I learned to work with this magical document called a CONTRACT. It outlines the work done, time frame, and rules for payment. It offers this other magical thing called legal protection.

    Write up a contract. Send him it and don't begin any work until it has been signed and delivered back with the stated negotiated funds.

    This isn't a restaurant but the mother f^cker ate your steak anyway then decided he didn't want to pay for it.

    When you provide a service... you collect payment upfront. If you want to use a product you pay for it first.
     
    NetStar, Jul 20, 2014 IP
  5. Ethan Alvin

    Ethan Alvin Active Member

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    #5
    Well, I didn't enforce anything because like what I said, it was all relatively small orders (even negligible). But you're right, a contract is really needed. Just because we do not have a local office, or are freelancers, does not mean that we have to cheapen our services.
     
    Ethan Alvin, Jul 20, 2014 IP
  6. lifeplayer

    lifeplayer Notable Member Premium Member

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    #6
    This is not new at all, it seems happen daily, the only different is the seller and buyer. I wondering why dont you use escrow instead of paypal?
    This is safe for both buyer and seller
     
    lifeplayer, Jul 20, 2014 IP
  7. Ethan Alvin

    Ethan Alvin Active Member

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    #7
    Ethan Alvin, Jul 21, 2014 IP
  8. NetStar

    NetStar Well-Known Member

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    #8
    A contract is mandatory. Otherwise the terms can change at will.
     
    NetStar, Jul 21, 2014 IP