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Commission system

Page history last edited by PBworks 16 years, 1 month ago

Commission system:

 

 

 

 

We pay people for their time to fix up bikes that are sold at FR.

 

 

 

How does one become qualified to build bikes on commission?

 

  • Collective members
  • Must complete full overhaul of any adult bike with no errors. Quality check must be conducted by an already qualified volunteer. (yeah, it’s a problem to get the first person- we can decide as group)

 

 

 

What bikes can be chosen for commission build? All except:

 

  • Bikes with tags
  • Bikes with defects – frozen seatposts, bent/cracked frames - [morgan says] we should be recyling bent/cracked frames anyway, so no one tries to build them up.

 

 

 

Procedure:

 

  • Put ---- color tag on bike, plus a white numbered tag
  • Fill out fix-for-sale form (NOT regular EAB form, blanks are in fix-for-sale binder)
  • Place form in “unsold bikes organized by tag #” section of fix-for-sale binder
  • Bike must be finished in 1 month. Cannot sit mid-repair occupying shelf space infinitely. If not finished in 1 month, tag comes off, bike reverts to general stock, payment for hours is forfeited.
  • Cannot be sold until inspected and all points on checklist (on back of FFS form) are O.K.
  • Inspection can be performed by another qualified FFS mechanic.

 

 

 

Sale procedure:

 

  • Must be sold by a third person (not the inspector, not the builder)
  • will handle money in accordance with directives from Kitty ( if we can ever get a chance to ask her this)

 


 

Stuart adds: One way to handle the question of employment might be to consider this a 'consignment' system rather than a commission system. When a builder starts work on a bike there is an implicit sale of that bike to them on credit from Free Ride. When the builder finishes building the bike, they put it on consignment at Free Ride at a price we establish using the above system. When the bike sells we pay them and they pay us back from the credit Free Ride extended when they started working. We would enter the sale for Free Ride's share of the profit and the remainder would go into an envelope for the builder. The point is that instead of Free Ride paying them for their labor, we are selling them a bike, they are fixing it (adding value), and then having us sell it on consignment. Also see my comments on the Goals page about modifying the payment structure to encourage builders to choose lower quality bikes when possible without inducing competition between builders.

 

(shaun added) There may be issues to consider in the planning of how people will get paid - as either independent contractors (simple, we pay no tax, it's up to the individual to pay taxes) or as employees (complicated, we pay several taxes, involves payroll). It's probably obvious that I would rather pay folks as contractors and let them make their own decisions as far as taxes go, but if this commission system picks up and begins to provide steady income for a few folks, we're going to have to make sure we've got this straightened out or we could have some issues down the line. Please see this document for details on how this distinction is made by the IRS.

NOTE: attached document is a slightly older version of the IRS form, they now have a different way of saying the same things, but I find this older version a lot simpler to understand. Folks wishing to punish themselves can look at a version of the newer guidelines here.

 

[Morgan asks] in this proposal, the folks that are qualified to build bikes select the bikes that they are going to work on? As opposed to someone coming into the shop, finding a bike they like, and then having someone fix it up for them?

 

How do we address the 'cherry-picking' issue? I wouldn't want all the good bikes/flashy parts getting sucked into this program, over others.

 

Pricing? That's a biggie. Are we proposing to pay folks hourly? Or by resale value alone (whici I think is deeply problematical, re cherry-picking)?

 

 

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