Appraiser problems with vendors.

[denverappraiser]

I have a few questions for the gurus here. Those who know me know that I do a fair amount of independent appraisal work where a vendor who is not local to me ships in a stone on behalf of an appraisal client who may or may not be local. Sometimes this results in a sale and sometimes it doesn’t. When it does, the client pays the me and the vendor and takes the stone; when it doesn’t they just pay me and the stone get’s shipped back to the vendor. My fees are the same either way. There are quite a few of the appraisers listed in the resource index who offer similar services.

The problem is with the shipping logistics. Things like packaging, paperwork and meeting their schedules. Some vendors are very easy to get along with, are well organized and are very cooperative about this whole process. Others manage to make it fantastically difficult. Dealing with a difficult vendor adds a significant amount of time, aggravation and liability exposure to the whole process.

I charge a fee to the client for dealing with a 3rd party vendor and, specifically, for the liability insurance associated with this process. My time in dealing with it is ‘free’. Some appraisers include it as part of the general appraisal fee and others refuse this kind of work entirely. Is it reasonable for an appraiser to charge extra to process shipments from certain dealers? Is it reasonable to refuse the job if the vendor is someone who consistently causes problems and consistently wastes their time? If so, should the appraiser tell the client why they’re refusing the job or that their ‘handling fee’ is going to be more than it would be if they shopped elsewhere?

Neil Beaty
GG(GIA) ICGA(AGS) NAJA
Professional Appraisals in Denver

 

[strmrdr]

That is a large can of worms.

1. charge extra: I see problems with different fee''s I would not do a higher fee but raise the base and do a discount. It looks better.

2. You can refuse to work with anyone you want.

3: It would be better to just say that their procedures are incompatible with yours.

My answer....
Write up and publish a set of acceptable procedures.
Send it to all the vendors you have worked with for clients so they know what is expected. Send it to the vendor as part of making arrangements every time.
Working with other appraisers who do this kind of work to set the procedures would take some of the heat off if you all did it the same way.
It would also make the vendors life easier to have one set of rules.
It may also open the door to more of this kind of work because it is easier.
The biggest thing is you cant expect a vendor to meet expectations if you don''t tell them what you expect.
Then if they don''t change you can do the options above.

 

[Rockdiamond]

That''s a thorny problem Neil!

Off the top of my head: If there''s pattern from certain vendors, maybe you could draft a letter to those vendors in particular.
Explain that your service, as their service, requires certain time-frames. Explain how by providing such a service to buyers who need a second opinion, you are actually working in such a way that benefits them.
If you were to let a potential buyer know that a particular vendor is difficult to work with, it could certainly kill their sale- and cause them more problems over the long run.

If you were able to explain this in a way that makes them aware their lack of cooperation may cost them business, maybe they''d be more willing to work in a reasonable manner......


The alternative you suggested- charging more for the vendors that are pains in the ass- would certainly cause a lot of resentment on the part of the difficult vendors.....maybe they deserve it

 

[Richard Sherwood]

If somebody''s a pain in the ass, I just don''t do business with them, and let the consumer know why.

 

[Lula]

Ditto Storm and Richard. As a former business owner, I can say that this is a common problem. Storm's suggestions offer a solution that is fair to everyone.

May I suggest you develop a "fee schedule" or a "fee range" - sort of an a la carte menu of services that offers the lowest cost to those customers who are efficient and timely, but allows you to charge more for those who use up more time and resources? That way customers can see up front how much more getting their act together will save them. For those who don't care, they pay more, but they know up front what it will cost them.

 

[Rockdiamond]

Sara- I believe Neil was talking about vendors, as opposed to consumers.
It''s a unique situation, as the consumer is the appraiser''s client- but in effect, the appraiser is also working for the vendor.

Richard, I can completely understand your feelings on this.
If a vendor is difficult to work with, it might be doing a real service to the consumer if you let them know.

As a vendor myself, I do feel that you letting the problem vendors know that they are causing problems that may bite them in the ass, might make the situation improve for you, and the problem vendors.
if you''ve alerted a vendor to the problem, and they choose to ignore the helpful advice, then they need to live with the consequences.

 

[Lula]

You're right Rockdiamond -- I should have typed "vendors" where it says "customers." Thanks for catching that.

 

[denverappraiser]

Vendors can and do refuse to ship to appraisers who they consider to be disingenuous, uncreditworthy or just stupid. I certainly agree that they should have this right and it would be foolish for them not to have standards on this issue. It seems only fair that appraisers should be able to apply similar standards.

There’s no doubt that vendors would resent terribly any surcharge imposed on the customer for dealing with them and that this would have an effect on how consumers would perceive them (as well as how they perceive the appraiser). Unfortunately, any variable handling fee, whether it’s a premium or a discount, comes suspiciously close to ‘endorsing’ certain vendors, something that any ethical appraiser goes through great length to avoid. There’s not even a way to charge by the hour for this time because the client has already been quoted a price, billed, paid and has left the building before the issue comes up of when, how and to whom it will be shipped.

Tradition in the industry has it that as long as the dealer pays the shipping fees to the carrier directly then they don’t need to pay anything extra to get their merchandise back. To some extent this seems fair since they didn’t get the sale but, at the same time, often they are charging the client a handling fee on the return. In fact often it’s fairly steep because they want to discourage returns.

So far my solution has been to charge the same fee for everyone and bite my tongue about it but it’s getting increasingly aggravating and it seems somehow unfair to the folks whose deal goes smoothly and without a hitch. My current thinking is to start doing just as Richard does and simply refuse jobs that require accepting shipments from the problem vendors. I’m still contemplating whether I should tell the client why.

Neil Beaty
GG(GIA) ICGA(AGS) NAJA
Professional Appraisals in Denver

 

[Rockdiamond]

Great thread Neil.
It brings up a lot of important points.
For one thing, a vendor is also in a tough spot sometimes.
Say they know an appraiser is less than competent- if a vendor discourages a client from using an appraiser, it could actually be seen as an endorsement of the appraiser in the consumer''s eyes.
The vendor says- "Oh Joe''s Appraisers? Don;t send it there, they have no idea what they are doing" could just as easily be heard as "Don''t use Joe''s appraisers as he''s disapproved of our items in the past"

Another tough spot for the vendor is if a client asks about an appraiser. If the vendor recommends and appraiser, that could easily be seen as collusion.

I still say that if it''s been endemic with certain suppliers, a note from you letting them know you''ll be forced to take action would be a fair approach.


ON another note: Neil can you send back my darned stone- you''ve had it for 35 seconds extra and time is money....

IT''S A JOKE.........

 

[strmrdr]

I agree with Rich in some ways.
I have fired clients in the past sometimes it isn't worth the hassle but I always try and give them one chance to fix the problem.
I think that is good business as I have had clients turn around. (vendors in your case)

 

[denverappraiser]

I’m pretty easy to get along with and I work pretty fast. I do a lot of this. It’s true I’ve never sent a vendor a list of requirements on how to do business with me but I have trouble with very few. I’m not all that demanding and really there’s only one major culprit at the moment. I don’t want to name names here for obvious reasons. Yes, it’s a PS vendor.

Here are my expectations:

I expect someone to contact me in advance and tell me a package is coming and on whose behalf.

I expect you to include the name of the client on the package or at least inside. (I prefer it on the outside box because I prefer to not even open the package until the client is present)

I expect you to pack things securely and include a packing list that indicates everything that’s supposed to be in the package including stones, lab documents, 'free' loupes, etc.

I expect the inner packaging to clearly indicate if the item has been paid for and if the item is approved for release to the client. This should be very obvious, for obvious reasons.

I expect the package to contain whatever forms or paperwork you want me to give to the client. Don’t fax or email these things over the next few days. I will show the client EVERYTHING in the package or that you tell me about either the deal or the merchandise. Please don't include notes or email me any communications that you don't want me to share. I work for the client, not you.

If you want me to return ship on your account, I expect the shipping docs to arrive with at least a few hours to spare for packing time. Include whatever paperwork you want included in the package (like your packing list). I do know how to pack a diamond securely for shipment and I’m willing to take the time to do it properly but I do have other clients and if the docs arrive at 4:30 by email, don’t expect it to be at the FedEx office by 5:00. Bear in mind that I might not be in your time zone.

I don’t want to ship to a 5th or 6th party. (If it dropships to me in the first place we’ve already got you, the client, the shipper and me involved in the deal. More participants means more opportunities for misunderstandings). I’ll ship it to you or back to wherever it came from. Don’t use me as your ‘virtual’ inventory and have me dropship it to the next prospective customer.

I’m not going to talk to you about the client, whether she liked it, whether she’s going to buy it, what I or she thought of the stone(s) etc. The ONLY things I discuss with vendors is to acknowledge safe receipt of the package, the logistics of shipping if I’m asked to return it or to confirm final delivery was made to the client if the deal goes through.

No, I won’t give you a copy of the appraisal report.

Neil Beaty
GG(GIA) ICGA(AGS) NAJA
Professional Appraisals in Denver

 

[Rockdiamond]

Neil- your points are concise. And thorough.
Some seem to be common sense. Such as the fact the vendor has no right whatsoever to the report, or your conclusions. They did not hire you.

AS far as shipping, it would seem to make sense that documentation is necessary.
It makes sense that a consumer might think a box with their item needs no explanation. We have to remind everyone who is going to ship something to us to include a letter with specifics on it. They are not in the business- it would not seem obvious to many smart people.
OF course, there are many people in the trade that need the same reminder!

As well as some of the other things you mention- such as referring to the clients name outside the box.
I'd suggest you put together a checklist that the vendor needs to acknowledge each and every time they need to ship you a diamond.

Many people might not realize the responsibility an appraiser in your position needs to accept.
Rushing something is all well and good...until haste causes something to be lost. Than it's too late to go back and be careful.
One of the fist lessons on this business, if one is handling merchandise, is to exercise methodical checks to make sure the item, and most importantly, you, are safe.
I would not blame you at all if you turned down any jobs where you felt any pressure whatsoever.

 

[risingsun]

If the issues you are describing are happening with one particular vendor, can you speak with this vendor in an attempt to come to an understanding about what you need to work them with effectively. I realize that they are not your client, but it might be a way to address this problem. If you cannot resolve the problem, it might be best not to work with the vendor. What to tell the client? That there are time constraints with this vendor that don't make the two of you a compatible match.

 

[Garry H (Cut Nut)]

My sympathy lies with you Neil, but that does not solve your problem.

If a client wants me to make something I know is really wrong and bad for everyone - I sometimes say "I will make it, but you must sign the packet to say you waive our usual rights of return etc" And "I will not put my stamp in this ring".

The equivalent for you might be a phone call followed by a letter letting the errant #&@*''s know the problem and that you are charging them (or their clients) an additional fee. That then should get them to think about the problem and hopefully solve it from their side.

Then everyone is happy.
(But i am a bit of a PollyAnna)

 

[Modified Brilliant]

Neil...
Your expectations from a vendor are not unreasonable. I share many of the same frustrations that you do.
I also let the client open the box in front of me....but without any ID on the box..how will I know who opens what??
I would be interested in working with you and other fellow appraisers in establishing terms and conditions that all of us could use to
make the process more efficient for both parties. Possibly it could be published within the appraiser''s resource page.

Thankfully, I haven''t had many issues with PS vendor shipments.
If they provide a return label, that''s great. If not, my client gets charged the actual FedEx cost to me for shipping and insurance plus
a small handling fee for me to "hand carry" the package to our local FedEx office. The trip takes me about 20 minutes round trip but
offers added security by me watching a FedEx rep scan the package into the system. But it still takes me out of my office and
oftentimes means a late trip to my FedEx office (it closes at 9pm EST).

I also have been frustrated at times especially when a loose diamond has been shipped to me without a client''s name or any identifying
information other than carat weight. Last year I received a 2 ct. loose diamond in a presentation box with no paperwork or invoice...zip, nada.
I did call the vendor and expressed my concern over their lax procedures.

Appraisers...let''s work on this together.

www.metrojewelryappraisers.com