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#09 – The Secrets to Successful Puppy Deposits

by | Jul 9, 2021 | People Management

I was in this breeder group on Facebook one time and this breeder who had been breeding for years came on and said she had called 85 of the 360 people on her waitlist before finding 6 buyers for the puppies she just had. My mind was blown. Who wants to spend the time to contact 85 people just to get 6 puppy buyers?! Holy guacamole, what a waste of time!

I highly recommend that you collect deposits from prospective owners. In the beginning a lot of people will tell you that they want one or want to be on your waitlist, but when the time comes to pick a puppy, they will often ghost you.

Deposits fix this.

Deposits will officially lock people on your waitlist. It causes them to settle on your kennel and stop shopping around. In fact, nowadays, I tell people to only give me a deposit once they have decided they want a pup from my kennel.

I also use the deposit to lock in their price for 24 months, meaning if my price goes up before they get a puppy, then they get the puppy at the price point it was when they placed the deposit. If they end up getting a puppy after the 24 months, then the deposit is applied to the new price of the dog. I don’t ask for an additional deposit from these people, just more at the time of pick up. For example, say your dogs were $1000 when they placed a $200 deposit. Then your price went to $1200, I would maintain them on the list, but instead of $800 due at pick up, they’ll pay me $1000 at pick up.

How much should your deposit be?

You have a lot of flexibility here, but there are some guidelines. Remember, the reason we are having them pay a deposit is to confirm their interest in one of your puppies, to stop them from shopping around, and to let you know you have a solid demand for your dogs, it also gives some skin in the game from the puppy owner-to-be and that makes them more inclined to respond and communicate with you.

The goal is setting a deposit that accomplishes that goal, while also doesn’t make you look like you’re taking advantage of buyers. It’s for this reason that I don’t recommend asking 50% up front, especially if you go the route of non-refundable deposits, it looks disingenuine and you don’t want to put that tension on your relationship with your buyers, as it will make them a little more demanding with you, and more likely to feel like you’re more concerned with the money than the dogs, and that’s not the impression you want to give off. The money is very important, but money is personal, so we need to take great respect with how we handle the money transactions with our dogs.

You also don’t want the deposit to be so steep that many people will need to plan the deposit, they should be able to pay you the deposit when they decide they want a dog. This makes building your waitlist on a first-come-first-serve basis much easier, as you can base it off the date you received the deposit.

If your deposit is too low, then people will give you a deposit before they are locked in on your kennel, as they will not be concerned with losing that deposit if it were say $50-$100, it’s unfortunately not a lot of money these days. If they perceive the deposit as disposable money, then it won’t serve the purpose of building your waitlist in the way it should.

I find the sweet spot between the deposit being enough to get them to lock in with you, affordable for the buyer rather quickly, and not so much that they feel taken advantage of is around 20-25% of your total price.

So for example, if your pups are $1000, I would do $200 or $250, and at $1200 I would do $300. When settling on a deposit amount, make it simple and tangible. When people ask how to get on your waitlist, tell them a deposit will lock you in on the waitlist. Say, “our deposits are $200 and that comes off the total purchase price of $1000, so only $800 will be due at pick up.” I find this works the best, leaving no room for questioning how it all works. Again, people get a little needy when discussing money, so make it really transparent, it will be greatly appreciated by your buyers.

You also want to pick a deposit amount that is a simple easy round number in the 20-25% range, that’s easiest. So if 20% is like $220, then opt for $200 or $250.

Also consider if you want larger payouts along the way, or if you prefer large chunks of money all at once—as in when your litter goes home. For me, I like smaller deposits and larger payouts at pick up. That makes it easier for me to make large purchases like pallets of dog food or to improve my kennel facilities when a litter goes home, I also find it personally easier to budget.

And, although it isn’t exactly deposit related, I do recommend that you tell people payment is due in full by either pick up OR 8 or 9 weeks, however you want to run it. Half the battle of getting a puppy is often the timing, so sometimes people will want to wait a week or two so they can get things started right, like maybe they will be on a break from school for a week and would prefer to wait an extra week to pick the puppy up so they have more time to dedicate that first week. You just have to be careful that they aren’t delaying because they aren’t planning to actually pick up the puppy, which can happen when they weren’t honest with themselves about their ability to afford the pup.

It really sucks to have someone back out of buying a puppy at 8 weeks, but it only gets worse as the pups get older. Isn’t that the silly thing about puppies? People want them when they are little and cute, the older they get, the harder they are to sell. So if you’re going to have a buyer drop out, you want to know as soon as possible. We can force an answer to whether or not they are getting the puppy by putting some guidelines in our contract.

For example, my contract says that I will hold the dogs for up to 4 weeks for free, so long as I have payment in full by 8 weeks. If I don’t have payment by 8 weeks, then I know I have a puppy that is available. To accommodate buyers and their lives, it also means I won’t charge boarding fees for a puppy that hasn’t been picked up until the puppy is 12 weeks, after the four extra weeks my boarding fee goes to $15/night.

I can’t say this is ever really a problem, you just need to have guidelines so people don’t try and take advantage and you certainly don’t want to be holding onto a pup that someone isn’t going to pay for or pick up. If they don’t want the dog, best to know as soon as possible so that you can advertise a cute, young puppy, the older they get, the more they cost you and the harder they can be to sell.

On a side note—to make this easier for you—tell people to let me know if something comes up or if now isn’t a good time for a puppy, remind them that timing is half the battle of a new puppy and this gives them an out if they can’t do a puppy right now. It’ll be so much easier if you do, they’ll be more willing to tell your their problems and to let you know what’s going on, which helps you work with them better.

Granted, this will be easier if you have a few females in your breeding program, as you’ll have more litters and people won’t have to wait too long for another puppy. Honestly, if you want to have a kennel with a name, you’ll want to get to at least 3-4 females and at least 2 males, this set up can be a full-time job and support you. It also makes it easier to accommodate buyers through both timing and what they want.

Should You Wait Until You Have Puppies to Collect Deposits?

Some breeders wait until they have puppies on the ground to collect deposits. The idea behind this is that we don’t know for sure how many puppies we will have until they are born, we also don’t know their sex, or anything else. Many breeders suggest it is dishonest to collect deposits on puppies that you don’t even have yet.

I can see this the first few litters, it may be hard to convince people to give you a deposit without puppies on the ground. It might also feel awkward collecting deposits and then not having enough puppies to fulfill the deposits.

If you only have 1-2 litters per year, I can understand your hesitation, and you may want to put people on a waitlist, then collect deposits once the puppies are born. If this is the case, be very clear with your buyers about the process, so they understand they are on a waitlist until you know what you have, then you’ll be confirming with a deposit once they are born.

If you have 3-4 or more litters per year, then I don’t think this method is helpful, since you have enough puppies coming that you can reasonably fulfill your deposit list with upcoming litters should not enough pups be born in this litter.

So if you feel more comfortable waiting until they are born in the first few litters, or while your kennel is small, I believe that makes sense. However, once your kennel grows, I would opt for collecting deposits all year around.

What about collecting too many deposits?

In theory it is possible to collect too many deposits. This would be a situation where people are waiting multiple years to get a dog. If you’re in a situation where your dogs are very sought after and you are starting to have more people on your waitlist and a year or two’s worth of puppies, you might consider holding off or decreasing your marketing. For me, when I’m pretty full on deposits, I stop posting on Instagram anything from my ranch, this seems to slow it down.

At the very least, I recommend that you be very upfront with your buyers about WHEN they can expect to get a puppy. They will probably ask, but you should definitely have an answer. Walk through your females, their cycles, and their average litter size to get a rough estimate. This will help you maintain yourself as an honest breeder, because it feels really dishonest to collect deposits and the buyers don’t know it’ll be over 6 months, or even a year, before they can expect to take a puppy home.

Want to Get the Puppy Deposit Checklist?

Should deposits be refundable?

This one is a little tricky. The whole point of a deposit is to lock your buyers in on your program, so making refunds super easy, is not going to work toward that goal. However, there is a little bit of legality to it, for example if you take deposits with a credit card (which is super easy with something like stripe or square), then by law, if they back out, and therefore they paid $200 for a product they didn’t receive, then they can report you to their credit card company and get that money back.

I actually had this happen once, they pulled the money right out of my bank account without notice, when I didn’t get a deposit back to him in time, you know me and mailing things…ugh, thankfully there is Venmo and Zelle now.

To protect yourself from this, you can write it so that the deposit pays for their place in line, although it will be a little sticky in court. My solution to this is to tell them a certain portion of the deposit is refundable, so for a $300 deposit, I would say that $150 is refundable. This way people will think more before placing a deposit, so the people who do place a deposit will be more likely to follow through with getting a puppy and generally prevents them from making more trouble for you down the road by asking back out when a litter is almost ready to go. Most people don’t feel like you are taking advantage of them if you allow for a portion of the deposit to be refunded, they’ll be satisfied getting some of it back and it will leave your reputation as an honest dog breeder intact, which is important.

It is also nice because you do get to keep that money, and consider it payment for managing them on the waitlist, the time spent working with them, and potentially the difficulty in placing a puppy later in his life because they backed out.

There are exceptions to keeping part or all of the deposit. For example, if you have only a litter a year and the person wants a female and you have 5 males born and no females, well, if she wanted her deposit back, I would give it. Generally, if the reason they want the deposit back is your fault, as in you missed a heat cycle for your bitch or a puppy died from an injury, as well as Acts of God, like not enough pups were born, then I will do a full refund.

If they are asking a refund because they got another puppy somewhere else, or decided not to get a puppy after all, well then, I don’t refund more than half. Remember, people will give you lots of sob stories when they want their money back, it goes back to money being so personal, you just have to play it by ear and do the best you can. I had a puppy that was born in the color this woman wanted, she was stuck on a color—if you want to learn more about accommodating color with your buyer requests, be sure to check out Episode #7. Well, she wanted a female solid puppy and one was born, however, the puppy had a cleft pallet and it was struggling. I ended up losing the puppy to aspirating milk after tube feeding for 3 days, I told the buyer and after telling her, I told her the potential for when I would have another puppy of that color, in this case it would set things back 8 weeks. She was fine, told me to bump her to the next litter, and then the very next day goes on about being absolutely devastated about losing this puppy—mind you she only saw a single picture of the puppy—and follows up with wanting her deposit back. It just didn’t fit, didn’t make sense, which usually means that they are wanting to go elsewhere. If you think the relationship with that buyer is busted and the trust is gone, by all means refund, you don’t want to work under that difficult of a relationship for the entire life of a dog, but if you can get them what they need, especially if it’s relatively soon, then remind them of your policy on refunds and let them pick. I told her I could refund her half. After a few minutes she messaged me back that she wanted to wait until the next litter.

Be careful in these situations to keep your cool, sometimes you’ll want to call buyers out on their dramatic comments, but it doesn’t go anywhere, it just creates tension, so keep it cool, set your ego aside, and stick to your policies. This way it is fair for everyone, and maintains the relationship with your buyers as best as possible.

A simple trick to make this easier, cover the information before it’s a problem, and make sure that you don’t forget to explain it, is to put these stipulations in your contract, but to not accept a deposit until they sign the contract. This simple step makes it a whole lot easier to set those boundaries.

If things get tense or you feel things will escalate, erring on the side of refunding a deposit, is usually your least difficult route. Play it by ear, but believe me, fighting over a deposit is NOT worth the pain in the butt, seriously.

How many deposits will you need to refund?

Well, in the beginning, expect some. As your kennel grows and your marketing improves, you’ll get better buyers and have better boundaries set, so you’ll have less issues, but you’ll have more people contacting you, so there will be some because of sheer numbers. I find that I refund about 1 deposit out of 20 to give you an idea. It’s not a lot, but these are live animals, people are like wild animals, and the longer the wait between deposit and puppy, the more opportunity for things to change, so there are a lot of wild cards in the business and we need to stay flexible.

If you can keep an amount equal to one of your deposits in your bank account, this is usually sufficient in budgeting to manage refunds.

Make taking deposits easy and digital

You want to make the process of people placing a deposit easy. It’s not about getting them to quickly decide and get them to give you money, BUT, it is one of the first impressions they’ll have of your business, so if it’s difficult, or feels out-dated, then that’s the impression they’ll have of your kennel and you, and you don’t want that.

Having that said, I stopped taking credit cards a few years ago, it happened as I was moving out of the retail business, and no longer had an affordable credit card reader, while other peer-to-peer payment services became pretty popular, like Venmo. Now I do generally do deposits over Zelle or Venmo, like I was saying, but some people still send me checks.

If you decide to take credit cards, know that it is against federal law to charge a credit card transaction fee. I know you see it all the time, but you can’t technically charge a fee like that, and it’s technicalities that get you, if you’re sued in small claims court. If you want to take credit cards and charge an additional fee to cover them, then you have to write it as a cash discount lost. So essentially your price is listed as a discounted cash price, but the actual price is something higher. This is how the merchant services companies, like American Express, got it settled in court a few years ago.

If you aren’t a big fan of math, you’re in luck, I’m that nerd, so if you want to take credit cards and go this route, then take your cash puppy price and divide it by .97 to cover a 3% transaction fee. So for an $1,000 puppy, you would divide by .97, and that would give you $1,030.93, so if you ran that on a credit card that charged 3%, you’d get your $1,000 after they took their fee.

I don’t accept checks from people at puppy pick up, unless I know them, like they are a previous buyer, or if they are pretty old, like over 60. I’ve had a lot of customers who can barely use email, but they are wonderful owners, so I will take their checks.

So there you have it, how to make your life managing buyers so much easier using deposits.

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Hey! I’m Julie Swan! I’m here to help you build a breeding business that you love, one that produces amazing dogs, places them in wonderful homes, gives you the life you want, also pays the bills!