A consignment deal gone bad

[RobertB]

I wanted to get you guys' thoughts about a consignment deal on a bass of mine that I ended up feeling kinda screwed on last year. I'm considering filing in small claims over it. This has nothing whatsoever to do with EBMM or EBMM basses, but I wanted to pose this to you guys. But if the appropriate thing to do is delete it, no sweat.

So this was in the first half of last year, at the end of my period of experimenting with a certain custom "boutique" maker's basses. I had gotten a lower end one a few years earlier, primarily out of appreciation for the exotic woods used in these basses, and the reputation of this particular luthier. Over time, I traded up a number of times for more expensive ones, until buying the last one I got for $7000.00. I mention prices only for background, in explaining/describing my grievance in the situation.

Anyway, by the end of that period of experimentation with these basses & I had tried LOTS of configurations, in terms of wood combinations, electronics, etc.. I realized that there was no point in my continuing with it, when the result was always the same ... I'd end up with a really expensive bass that I admired alot for certain reasons, but that ultimately just sat there while I played my #1 .. my 2001 Autumn Redrise SR4. I just couldn't get my sound - or even a reasonable likeness of it - out of any those basses I tried. They were all just too polite. So I decided to declare victory & retreat ... been there, done that, time to cash out.

Well, the maker of those basses had recently started running a "certified pre-owned" page on their site at that time ... or I should say, they had let a young employee of theirs create & run that program - a guy who was doing their web stuff for them. I go the sense that he had pitched that to them, told them he'd handle every aspect of it so they wouldn't have to be bothered with it, so he could make a little side money on the consignments. Whatever, perfect for my needs - their site gets a gazillion hits, great - I'll go this route. The owners (2 guys .. the "master" & "apprentice") gave initial approval for each consignment they'd take in, based on a description of the bass in each case, but after that, they were completely hands off, letting their web-guy handle these consignments. I don't think they paid any more attention to them than that, and my gripe is more so specifically with their employee - the web/consignment guy, rather than with them, the owners. Bult ultimately, I think it's their responsbility to make sure the right thing is done, especially if something questionable comes up. After all, the "certified pre-owned" page is on THEIR site ... not web-guy's.

Anyway, it's too late to say I'll make it short, but here's the skinny on what happened. I get the approval to send it in, after a quick phone conversation with one of the owners in which I described the bass to him, and he told me their consignment terms .. they get 20%. And that's the crux of this whole situation .. owner told me they get 20% of what it sells for ... then hands the phone over to web/consignment guy, and I deal with him on it from that point on.

Well, after I give web-guy the serial number & tell him I'll ship it the next day, I get an email from him the next day, after he's looked into the particulars of my bass, saying he may've already found a buyer, so "hurry up & send it in .. buyer wants to come to the shop this Friday to check it out. I can get you $6300.00 for it". So I say "sounds about right to me" (fully assuming we're stil operating under the terms of a straight up consignemnt, 80/20 as owner told me on the phone), and I ship the bass, it gets there Thursday. Then web/consignment guy sends me an email Friday night, saying "Great news, it sold! I'll send you your check asap".

Check takes a while & I'm wondering why, since supposedly a buyer bought it Friday. I mean ... 2 or 3 weeks go by before I get the check. I didn't raise a stink about it - it happens, right? But then I get a call from a buddy who says "hey man, I saw your bass on the <maker> pre-owned page. I take a look and sure enough, whereas photos of it had never been placed on the "certified pre-owned" page at any point up to the time I was told it sold, photos of my bass are now posted there. AND there's verbage about my bass being a "historic piece", because it was built side by side, from adjacent/adjoining cuts of wood, with exact same specs in every detail, as a custom bass made for a certain huge jazz/funk guy very well known in those circles. WTF, over? Was that true? I didn't know that? Something very strange is going on.

So I call owner, who doesn't know the details of what went on with that deal, so he has a talk with web/consignment guy. Turns out the bass did not really "sell" a few weeks earlier, when web-guy told me it did. What really happened was, he looked up the details of my bass by SN, and realized that it had in fact been built side by side/from adjoining cuts of wood, yata yata, as huge/jazz/funk guy. So he recognizes that those facts probably give it a collectibility factor that represent a darn good personal investment opportunity for him. He pays me off for the bass (with money out of his own pocket, mind you - hence the 2-3 week delay, because he knew better than to involve owner's/company money in this deal), and only THEN starts spreading the word about it & then about a week later posted it on their site. There never really was a buyer who "came by the shop on Friday", etc... the "buyer" was in fact himself.

Well, by the time I called & got that info from owner, the bass had just sold, and web-guy was right ... whereas he sent me $6300, he got over $12000.00 for it a few weeks later. High-five, real clever business guy, right? Uh-oh, not so fast.

I've gone back and forth on it over time, in terms of whether or not to take legal action. I don't want to drag the owners into it if I don't have to, they have a great reputation, and I wouldn't consider going out and trashing that by naming them and talking about it on talkbass, etc... But talking to them didn't get anywhere. Whereas I was hoping they'd force web-guy to do the right thing, what I got instead was, "there's nothing I can do, our money wasn't involved, we let web-guy handle all aspects of these deals, we're too busy making basses to care about these, you gotta deal with HIM". Lame. Well, needless to say, web-guy would never answer my calls or emails.

But my perspective is that web-guy still owes me the rest of my 80% ... of the ACTUAL selling price of something over $12000.00 ... means he owes me about $3400.00. If it were a few hundred or whatever ... no biggie. But this isn't chump-change - not for me. And at no point did the nature of the trasaction change from "consignment deal for Robert" to "personal investment opportunity for employee" of the company who made the bass & who I was doing the consignment deal with. Such a change in the nature of the deal would HAVE to involve knowledge and agreement on my part ... that's a no-brainer & goes without saying, but apparently that's not clear to web-guy, whose story to owner when questioned about it was, "well I told him he'd get 6300.00 and he said ok .. from that point on it was mine, and he was out of the picture" ... ?? WRONG. God, I'm getting worked up just talking about this. I let it lie for a while, but I'm about to start the legal process, I guess. Formal complaint letter sent vai certified mail & all that.

Any thoughts/suggestions from those in the know on these matters would be appreciated.

So much for keeping it short, huh?

 

[cky4ever]

Its tough... but I have a question to ask you... if he would have told you he was going to buy the bass himself, would you have sold it to him.... I think if he used his money instead of the company's theres really not much you can do. If he were a nice guy he should of told you to buy the instrument direct from you not thru the company and save you on consignment deal money (but he was probaby going to be better of doing it his way). he just used you as a middle man. Bought it fair and square from you as mystery buyer. Then he just followed the process himself and posted the insrument on the site but consigning it himself with the new found info. He probably had the info before he bought it but he can allege he found out after he bought the bass. Thats the issue... Im sorry my friend it appears to me youve been conned the LEGAL WAY. Its terrible but it happens to all of us. My friend got in a similar issue a few years back. He had a vintage jazz. He asked A FRIEND TO SELL IT FOR HIM. the owner of the bass knows nothing about vintage stuff. So the guy who was asked to sell it knows that vintage stuff is worth dinero. So he buys it as just a bass for 240dollars. An all original 1972 j bass. He sells it for 2500 bucs. Was there a con: yes and no. Its more of a MORAL THING...

Just my two cents. I wish you can get your money if you do pursue it in court but i think its a moral argument...

 

[RobertB]

... Just my two cents. I wish you can get your money if you do pursue it in court but i think its a moral argument...

Thanks for the thoughts. To answer your question, if he had told me his intentions and what he had found out about the bass, I can honestly say I would not have sold it. I would have kept it, recognizing the same collectibility he saw. I'm also a huge fan of huge jazz/funk bass guy, but it's more so about the overall collectibility.

I'm not sure I agree it's purely a moral issue. The terms of the consignment were broken/not honored. Additionally, I can prove/demonstrate that he was deliberately deceitful, which indicates that he himself knew what he was doing was not valid.

But thanks again,

 

[INMT]

Well I think when he "paid you off for the bass" he actually bought it making him the first customer who "bought it". The he resells it, for more yes but still a resale to a second customer.

Ever score something in a pawn shop cheap then list it on ebay for more because you knew it's value and the pawn person didn't? I know I have and I did not give the pawn shop more money because of it.

I can see why your angry or upset at the very least.
My $0.02 is that although they may not be the most upstanding people/person I do not think there is a legal claim. Maybe just a moral one.

 

[RobertB]

Well I think when he "paid you off for the bass" he actually bought it making him the first customer who "bought it". The he resells it, for more yes but still a resale to a second customer.

I understand your point. But as I see it, the basis for the legal case I have, is that since he is a representative of the company executing the consignment for me, what he did constitutes a conflict of interest, and the fact that he was in fact the buyer, would have had to have been disclosed to me. Of course, it was not. That fact was deliberately NOT disclosed. And I have those emails in which he said the prospective buyer was coming by the shop on Friday, and then came by & bought it, etc.... all very obviously deceitful. Sure, that part is circumstancial. But what I think is going to bite him in the ass is what i said in the 2nd sentence of this post.

Thanks,

 

[INMT]

Additionally, I can prove/demonstrate that he was deliberately deceitful, which indicates that he himself knew what he was doing was not valid.

But thanks again,

Well that kinda changes a lot. If you have that kind of proof then I would have to say you have a Civil case at the very least.
Dont forget to sue for court and lawyer costs.

 

[RobertB]

Well that kinda changes a lot. If you have that kind of proof then I would have to say you have a Civil case at the very least.
Dont forget to sue for court and lawyer costs.

Yeah, I think I'll only be able to put it bed by letting a judge review it & make the call. Small claims is inexpensive anyway.

Thx again.

 

[Aussie Mark]

I didn't have time to read the entire post, but I think you should post more pics of your wife

 

[RobertB]

I didn't have time to read the entire post, but I think you should post more pics of your wife

Send me a self-addressed stamped envelope and $100, Mark, and I'll send you one of her thongs. It really will be one of hers & not one of mine, I promise.

 

[Psychicpet]

Send me a self-addressed stamped envelope and $100, Mark, and I'll send you one of her thongs. It really will be one of hers & not one of mine, I promise.

and glad I read the thread


in all seriousness, it is dicey. does seem like definite conflict of interest.

but do grab hold of that MM that absolutely puts a used Fodera worth 12K to shame (for you) and have a good chuckle over the fact that the l'il ol' plank from San Luis floats your boat and lifts yer kilt.




I too know that price tag has no bearing on enjoyment and inspiration an instrument can bring.

 

[Caca de Kick]

I feel what web guy did was legit, even if it is deceitful. He bought it for 6300 and you agreed.
In case you didn't know, this very same thing happens in vintage guitar shops and by collectors everyday...buy low, and sell high right away.
Heck right now there's a vintage bass on an auction site that's bid past 8000 and still going up, and two weeks ago the current owner said on an open forum he had just paid 3500 for it. He certainly doesn't owe the old owner part of his sale money.

But the funny thing I see is, the famous jazz/funk guy had nothing to do with your old bass...he had his own bass and only played his bass, not yours. So I see nothing historical about it, and the current owner deserves to be out 12000 bucks for believing in magic sawdust.

 

[RobertB]

I feel what web guy did was legit, even if it is deceitful. He bought it for 6300 and you agreed.
In case you didn't know, this very same thing happens in vintage guitar shops and by collectors everyday...buy low, and sell high right away.
Heck right now there's a vintage bass on an auction site that's bid past 8000 and still going up, and two weeks ago the current owner said on an open forum he had just paid 3500 for it. He certainly doesn't owe the old owner part of his sale money.

But the funny thing I see is, the famous jazz/funk guy had nothing to do with your old bass...he had his own bass and only played his bass, not yours. So I see nothing historical about it, and the current owner deserves to be out 12000 bucks for believing in magic sawdust.

Of course I know ppl buy low & sell high. But Caca, this guy was acting as my "agent". I didn't go in there and sell my bass outright to this shop. Had that been the deal, I'd have nothing to say. But that wasn't the deal; I entered into a consignment agreement with them, which defines his role in a very specific way. He tried to blur those lines mid-course.

And what you said about the perceived "historic significance" and therefore increased collectibility and value of the bass, based on it's "history" ... you're absolutely right. But that's true of value in general. Ultimately, all that defines the value of something ... ever ... (atleast in a free market economy) is what someone - even just 1 person - is willing to pay for it. We could debate indefinitely about whether or not the fact that my bass being an identical twin cut from the same pieces of wood as the famous guy's "objectively" adds value to it, and whatever we may conclude wouldn't matter one iota. I happen to agree with you that it "shouldn't". But it's a fact, "illogical" as it may be, that ppl do project value onto things, based on criteria like that.

Not being argumentative here. I appreciate your comments.

 

[r goldsmith]

I agree

I didn't have time to read the entire post, but I think you should post more pics of your wife

Attaboy, Mark! As usual focussing on the main game. FWIW I totally agree.

Seriously, in Australia a "thong" is also one of those things you wear on your foot made of rubber, I think you guys in the States call them a "flip flop" or something. Not sure Mark would pay $100 for the remnants of foot odour.

 

[Aussie Mark]

Unless there are laws preventing employees from buying items that are for consignment in a store that employs them, I'd say the fact you accepted the $6300 offered to you takes you out of the equation, provided the web guy paid the other 20% of the $7875 price to the store as their commission. The pawn shop analogy comes to mind, where some kid sells his grandpa's '54 Precision to the store for $500, and the pawn store does their research and sells it for $30,000. All's fair in love and war, and all that.

PS. The $100 cheque is in the mail.

 

[Aussie Mark]

LOL Robert, I just noticed your rig in your signature .....

SWR Super Redhead

Word!

 

[jaylegroove]

Well, don't know how laws work in America, but in Europe things are pretty clear :

1. A bass put on consignment remains the seller's property until it is sold.
2. If the fee is 20%, it is due from the real resale price.
3. If the store tries to sell it more than what was stated by the seller, the store is responsible for delay in selling and, delay or not, he must pay the whole amount that is due.

For me, but according to EU laws (...), it's close to a swindle. But once again, I don't know how things work in America.

Cheers folks !

 

[RobertB]

Unless there are laws preventing employees from buying items that are for consignment in a store that employs them, I'd say the fact you accepted the $6300 offered to you takes you out of the equation, provided the web guy paid the other 20% of the $7875 price to the store as their commission. The pawn shop analogy comes to mind, where some kid sells his grandpa's '54 Precision to the store for $500, and the pawn store does their research and sells it for $30,000. All's fair in love and war, and all that.

PS. The $100 cheque is in the mail.

This is soo cool ... we were just talking the other day about starting up some kind of online business. Must be divine providence or something.

The assumption that the $6300 was 80% of the selling price, should've been safe. Even if web-guy is considered a valid buyer, the price I got wasn't 80% of the selling price. Owner said they didn't get a dime out of it & that they just let web-guy make some money this way. That would mean (again, even if web-guy is deemed a valid buyer, which I contest) that I got 100% of the selling price, which would make it an outright sale, as opposed to a consignment, which again works in my favor. Because for that transition from consignment to outright sale to occur in a valid/legitimate way, prior knowledge and consent would've been required on my part.

This is great, this is really helping me get my thoughts straight about this. And if it goes my way in court, you know where atleast a good chunk of that money is going.

 

[jaylegroove]

So it looks like US laws are close to EU ones on that point.

If you go to the court for such a deal in EU, then most probably :

1. The guy is sentenced to pay you at least 80% of $12,000,
2. He is sentenced to pay you for moral damage,
3. He is sentenced to pay all related charges (lawyers, ushers, etc.),
4. If the guy is not a registered dealer, he is sent to penal court for illegal business.

If such a story happened to me here in the EU, I'd go to the court right now.

Just IMO.

Cheers and best luck Ribates !

 

[RobertB]

LOL Robert, I just noticed your rig in your signature ..... Word!

Haha, nice. She's an incredible young lady - kind, intelligent, resourceful, creative & beautiful (inside & out). She's a stay at home mom for now - we have 2 boys, 7 y/o and 16 m/o - which means that she works a helluva lot harder than I do. I do my best to treat her as she deserves, and to keep the promises I made to her father when I asked for her hand.

<sappy violin music fades out>

Anyway, thanks, I'll pass along the compliment at the core of your horny remarks, to which she'll undoubtedly respond graciously yet totally indifferently. =)

Just messin' around ...

 

[RobertB]

So it looks like US laws are close to EU ones on that point.

If you go to the court for such a deal in EU, then most probably :

1. The guy is sentenced to pay you at least 80% of $12,000,
2. He is sentenced to pay you for moral damage,
3. He is sentenced to pay all related charges (lawyers, ushers, etc.),
4. If the guy is not a registered dealer, he is sent to penal court for illegal business.

If such a story happened to me here in the EU, I'd go to the court right now.

Just IMO.

Cheers and best luck Ribates !

Hell yeah. See, THAT's the kind of backing I'm lookin for, guys.

Thanks Jay!