Pre-Orders whose money is it???

Never lost a deposit.
However, I had a few items on consignment, and one item on loan for display. Lost when the shop went belly up.

I lost a deposit on a Weaver Berkshire when a dealer by the name of Mel Price unexpectedly departed to that great roundhouse in the sky.

As far as I know, dealers pay up within a specified period of time once they receive the product. Until then, it's on the manufacturer's dime.

---PCJ

 The dealer pays for items when they are shipped, they base the amount of items  made by the preorders and the manufactuer's take all the risk.

Sean

Hope all is well and do know you were a one time LHS so thanks for your reply. So from the buyers perspective our risk lies with the dealer/LHS

THANKS

Steve

I am not aware of any manufacturer we (LHS) represent to our customers who require 'front money' for an advance order.  More typically it is a retailer's policy in the conduct of their business.

That said, however, you should know that some distributors (in particular) accept preorders from dealers on the basis that their order is firm, not cancellable.  This is typically for the big ticket ($$$) items, but items having a very short manufacturing run, very limited production, may also be subject to this distributor's policy.  And the distributor's policy often traces back to the manufacturer's requirement.

The reason is quite simple....they don't want to be left 'holding the bag'.  That's understandable.

I suspect your question revolves around your own access to money that the retailer required from you in order to place an advance order.  You can probably see that, if the LHS made a policy-shackled commitment on your behalf, they don't want to end up buying something that will be difficult to peddle should you bail on your commitment.  I would certainly require the management to inform you of their policy regarding such advance payment before making the commitment, placing the advance order.  Often there is a $$ penalty for reneging...say 15-25%, which can do two things: Pay down the interest on the money tied up in a long-term 'shelf' item, and/or offset an atypical discount the retailer might have to make on the item in order to move it.  In other words, the retailer is trying to protect themselves financially.

Bailing on a commitment is not a pleasant thing for anyone in the daisy chain.  It's 'damaging' to the relationship(s) all along the line.  Credibility goes south.  Prices and caveats go north.

The downside of all this is, of course, the veiled threat that 'if you don't order it, you can't expect to get it'.   That is, manufacturers are scheduling closer and closer to the commitments, distributors are stocking closer and closer to commitments, and retailers are reducing speculative stock volumes in order to tighten the belt.

So, if you want to retain a thumb-and-forefinger grip on preorder monies, talk with the retailer BEFORE laying out the cash.  Understand the commitment.  Even get it in writing, if you have any concerns.

We (LHS) do not as common practice ask for front money...too much paper work.  If the unusual order merits a down payment, however, we typically only charge a minimal percentage....not refundable.  If this economy doesn't start to match the optimistic spin, however, that could change. 

FWIW, always... 

KD

Never ever put money down on any train. If they ask  go somewhere else.

It may differ from store to store.  I think the LHS holds it, at least in my case I'm fairly sure.  From what I understand, once my LHS submits a pre-order for a loco, their wholesaler or whoever will demand that they take and pay for it once it arrives.  I think the deposit is mostly to protect them from having to take something they wouldn't normally stock if i back out.  I never really protested - I only pre-order stuff I really want.

I try to use the same shops and do not give a deposit.  I have never had a problem or have failed to take what I ordered. 

My LHS does not asked for a deposit any more, now that they know me and we're good friends, but initially I was just some guy they had never seen tha tmuch walking in with a list of locos he wanted to buy that they normally don't keep in stock.  I can understand their initially ask for a deposit - I would have.

Heh, it's a funny story. I pre-ordered the green PRR Berkshire Jr Lionel from my hobby shop about 10 years ago. Since we were regular customers, the owner told my Dad and I not to worry about paying the preorder fee. My Father insisted (I was around 12), so I paid the man. A couple months later, the owner left his wife, including leaving her the shop. I never saw the item, or the money.

But such is life, and it taught me something early on.

Charles Ro took my preorder and c/c number, but won't actually bill my card until they ship. that is the way it should be. pre paying should be for a large discount if you are willing to risk your$$$

My LHS does not require prepay or deposit for pre-orders, but I sometimes prepay for several reasons:

They give me an additional discount if I prepay.

Discount is a LOT more than money is getting while waiting in checking account.

It helps my LHS out a little (they have always treated me pretty good).

If a lot of pre-orders come in all at once, I don't have to cough up $$$$ to pay for it all at one time (which has been happening frequently lately).

They do not pay the distributor or manufacturer for the items until they actually get them delivered to the store.

While I was running my store we offered an extra discount for pre-orders before the manufacture’s ordering deadline date. We didn’t normally ask for a deposit. The exception was when a new customer pre-ordered a large ticket item or the customer had a history of not taking the item.  As long as the customer picked up their items promptly after we received it, it worked out well.