Photo: Joe ShlabotnikThe other day I had a company come and remove two air conditioners from my office in order to clean them, store them for the winter, and return them in the spring. It wasn’t cheap: $269 for the first one and $249 for the second. But I like air conditioning, and I figured it was worthwhile to care for the units properly.
The surprising thing is that the company isn’t charging me a penny until they return the units in the spring. They are essentially floating me partial credit on a job of more than $500.
I wouldn’t have been at all surprised if they had asked for full payment up front; perhaps the most typical arrangement would have been to charge me some money up front and the rest upon reinstallation. The one option I wasn’t prepared for was the one they chose.
This company immediately joined our customer-service hall of fame.
This transaction reinforced for me the notion of how random our economic system can be. There have been some services I’ve paid for up front and waited weeks or months to receive. In other cases, I’ve been billed as things went along, and only in rare cases (and usually with small stakes, like dry cleaning) have I paid fully upon completion.
Here’s another example that illustrates the unpredictability of such things.
If you’re a journalist writing for a big magazine, you negotiate a fee up front but usually don’t get paid until the article is accepted or, in some cases, until it’s published. Expenses typically aren’t reimbursed until you’re done either. Which means that if you’re working on an extensive piece, which might take several months to report and write, you are working for free and laying out your own money for travel, etc., and you get paid only if/when the magazine accepts the piece.
If the magazine doesn’t accept the piece (for reasons that often lie well outside the writer’s control), you receive a “kill fee” of perhaps 25 percent of the agreed-upon rate. All around, this is a horrible deal for the journalist. When I used to work as a magazine editor, the worst part of the job by far was having to kill a piece, and it’s one of the reasons I stopped being an editor.
If that same journalist makes a deal to write a book, however, the contract is usually structured so that he gets 25 or 30 percent upon signing, with the remaining portions paid upon delivery of the manuscript (or sometimes even delivery of half the manuscript), the hardcover publication, and then the paperback publication. Also, book manuscripts are rarely “killed” as magazine pieces are.
When you write a book, the publisher is essentially serving as a venture-capital firm investing in your work. When you write a magazine article, the magazine is serving as a — well, I’m not sure what the analogy is, but it’s not so pretty. (Your suggestions are welcome.)
I never thought I’d suggest that magazines act a bit more like air-conditioner maintenance firms, but perhaps it’s time.
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$500! You could almost buy new air conditioners for that. I would like to be your mechanic.
I can believe the air conditioner payment scheme. Which is a stronger motivation to pay, having an extra air conditioner hanging out your window for the winter, or not having an air conditioner as the temperature climbs above 90?
Um, AC units only cost a hundred or 150. You should just buy new every year.
@Alex
Are you a Magazine’s Editor?
Just like IT Consultants, specially those who work as freelance, it’s really hard to negotiate under these circumstances. Having to work in advance without get paid and not having sure if you are going to be fully paid, is complicated.
We usually have to tell our customers how much time it will take to develop a software, but this takes effort, time and actually a little bit of coding/planning/designing – which by the way, should be paid as well.
What about the fact that the air conditioning company has your units as collateral? If you don’t pay, you definitely won’t be getting them back. The company will most likely sell your refurbished units to recover their costs.
The magazine is essentially holding the author’s pay as collateral. If they don’t produce the piece, or don’t produce it well, the magazine can “sell” the author’s collateral to another journalist to produce the same, or another, piece.
Oh, why don’t you just turn those ACs off and, a couple of weeks before spring, don’t you pay, what, less than $100 to clean them?
I would have walked the A/C down to the street and sold it to the first guy who offered me $10 (giving it for free wouldn’t work, because it would be assumed that something’s wrong with it).
No envinronmental guilt, and much cheaper to buy a new one than to clean and store the old one.
Perhaps a bit off topic, but it is disturbing how many people have simply suggested throwing the old one out (ok, maybe only implicitly), and just buying a new AC unit.
Is it disturbing to anyone else that you CAN actually buy a new one cheaper than taking care of one you already have? Just like with Bubble Jet printers, replacement cartridges more expensive than the printer, just buy a new printer and fill our landfills with more plastic…this trend disturbs me, and even I (at 27) can remember when I bought stuff, and it actually was designed and priced to last more than one use / season!
Talk about wasting our resources and jeopardizing the sustainability of our civilization!