

How To Charge Money For Things That Don't Exist Yet - pdq
http://blog.close.io/how-to-charge-money-for-things-that-dont-exist-yet

======
sp332
How are you going to give the money back after you've spent it on development?

~~~
krmmalik
You don't. That's the point. The value is in the solution you provide which is
what they're paying for.

~~~
sp332
Oh sorry, I was referring to this part: _“The deposit is fully refundable so
in case something unexpected happens to your business in the future you have
no risk. Sound fair enough?”_

~~~
pdq
The purpose of the deposit is to prove the customer actually will buy the
product. This binds both parties to the transaction, whereas just agreeing to
"if you build it we will buy" has no binding.

The refund policy is mostly for "show", but it takes away the risk from the
customer.

1\. If you are a startup and want to survive, you will get the product
delivered, so you can close on the contract. All you have so far is a deposit.

2\. The purpose of receiving the deposit is not to pay for the development of
the product, but to prove the customer actually wants the product. If you are
taking a deposit to pay for the development of a product, that's more of an
investment. If you renege on that promise, and don't have the money, you need
to get a loan to pay it back, or shut the business down, as you are proving
untrustworthy.

