What do you do when a supplier goes out of business or runs away with your money?
Fortunately, this has only happened to me once in my long career, when a supplier closed the business and took off with the deposits. Unfortunately, it is a situation that designers may face, and a subject that is often taboo when it comes to designer-client interactions.
In my case, I stepped up to the bar and dipped into my own pockets to pay the client for the losses incurred as a result of the supplier running off with the deposits. I did this, despite the fact that the contract specified that I was not responsible for covering that type of loss.
How does one avoid this sticky situation?
By not putting all of your eggs into one basket and also making sure that you are working with loyal suppliers and have a good sense of their character. Do your research before working with a new supplier, and always ask for references.
Keep in mind that insurance can cover your loss. There are people out there who can help you run those crooks down!
Is there anyone out there who’s been burned? Share your misfortune and let me know how you dealt with it.
Oh, NO! So sorry Vicente…!
It’s a very good idea to have insurance in situations like that.
I kind of had a similar situation… but fortunately the supplier was very helpful at the end, and did not runaway. I was lucky… because I did not have insurance.
We got to be very careful nowadays!
Thanks for sharing!
Renata
So sorry to hear !!!!
I had an issue with a supplier, and as you I had to cover the loss – in my case because I didn’t have a strong contract to back me… but at the same time it was the right think to do…
By the way, any suggestions in how to create a strong contract, how did you get yours done via Lawyer?? any insights from the group and you would be much appreciated
same thing happened to me with two diff suppliers at the same time (a mill worker and a metal worker) – i covered the deposits to new vendors and it just increased the lead time for the orders -
That is terrible. My father is an artist and I remember that early in his career, a gallery closed up shop overnight and stole all the artwork.
It’s honorable of you to pay for it yourself rather than allow the client to eat the cost.
This is the first time I’ve visited your blog, Mr. Wolf, although I’ve admired you for a long time! I listened to your podcast with The Skirted Roundtable and I thought it was really insightful and wonderful.
When I was a teenager my parents hired a builder/contractor for a major house addition. Despite good references and no flags from the BBB, the contractor disappeared with over a hundred thousand dollars and left an unfinished/open-to-the-elements house. It was a nightmare of epic proportions, especially when my parents were sued by the contractor’s subs and suppliers.
I know you talk about being burned by your clients, but us regular people have had these things happen to us, too.
Very early in my career I had landed a really nice job and a vendor ran off with 13k of money that was supposed to go for the purchase of carpeting for my client. I nearly had a nervous breakdown when I had my husband go over the office and a marshall had closed down the office!
First piece of biz of course was that I needed to take care of my client which resulted in getting some nice new accounts. Then, I made many, many fruitless calls, However, I had a friend who knew the DA and I went to them, and they said that they could help me. However, after 11 months, and many, many hours of work on my part, they BLEW ME OFF!
Fortunately, I found a really aggressive, lawyer (willing to work on a contingency basis!) who knew of this sheister and put the screws to him but good. It worked. For years, I received a monthly check.