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  1. #1
    SilvrSurfr's Avatar
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    So you wanna be a cottage vendor

    There was a recent post on cottage vendors that seemed to inflame people but I am hopeful mine will not. I have thought about becoming a cottage vendor (not in the near future or even in the next couple of years, most likely). However, there is no way I would start selling products without understanding the legal, ethical, and branding issues my cottage business would face. Several questions cross my mind:

    1. Incorporation - I'm no lawyer, but I believe incorporation protects individuals from having their personal assets taken in litigation/bankruptcy, so I assume this one is a no-brainer.

    2. Liability insurance - for what products would it be necessary? A backpack, tarp, or quilt? I doubt it. It would take a very creative lawyer to sue a business for harm done by any of these items.

    On the other hand, suspension-related items, hammocks, and even stoves, maybe so. There's a reason Boy Scouts don't allow alcohol stoves. Then again, the Boy Scouts take cases to court as much as they're taken to court so forget the Scouts.

    3. Patent infringement - I've heard from forum members that Tom Hennessy used to be quite litigious, but I haven't heard any legal activity recently. Is there a list of hammock-related patents somewhere on this forum? I'm sure it's probably wise to avoid making a Hennessy knockoff, but are there other patents of which one should be aware?

    4. Poaching ideas - now this is one that really fascinates me, because so many people on this forum put out ideas for which they seek no monetary recompense, but are simply trying to share ideas with forum members to enrich the community.

    Many of these ideas, or designs, are known by the person who first suggested a design that forum members could make themselves. However, what if someone wanted to profit from these unpatented ideas? What are the ethical obligations of the cottage vendor that will keep him in good standing with HF members? After all, the reputation of a cottage vendor is all he has.

    a. For example, the GrizzBeak was an idea by Grizzly Adams that is now sold by a cottage vendor (forgive me Grizz for this example but I love Grizz Beaks and I assume, for this argument, they're unpatented). Did the vendor have to get permission from Grizz to sell an unpatented idea that was given to the HF community? Is it just courtesy to do so?

    What if another cottage vendor started selling Grizz Beaks, but Grizzly Adams didn't approve since he had already given permission to one cottage vendor to profit from something using his HF screen name?

    If Grizz didn't approve, the cottage vendor could just call them tarp doors, but everyone on HF would know that there is a subtle but discernible difference between a GrizzBeak and a tarp door.

    b. I can think of several other examples like the Knotty mod. If I decided to make and sell a hammock with a Knotty mod, and Knotty PM'd me and said, "Don't use my HF screen name for your capitalist ventures," then ethically, I should probably heed his desires, even though he probably has no legal grounds to complain about me using an idea he gave away, with an HF screen name (Knotty) that is not copyrighted/patented or legally protected in any way.

    c. What if I sold an underquilt called the Frankenquilt? Would I have to ask Shug for permission to use the name even though he has no legal rights to the name?

    d. What if I made a PeaPod even though only one vendor that I know of makes a PeaPod? Would I alienate the HF community by even using the name or is it public domain?

    As a cottage vendor, I wouldn't want people sitting around the campfire at a group hang calling me a ripoff artist, or bashing me that I stole their idea for profit.

    5. Serving your customers

    I'm sure a lot of cottage vendors get this - somebody buys a product, falls in love with the quality and the customer service, and then says, "Gee, when are you gonna start making quilts? If you made one, I'd buy it in a heartbeat." So the cottage vendor is pressured by their own customers to start making products that other vendors already make.

    If I was a quilt vendor, and I had customers clamoring for me to make tarps 'cause they love my work, I might hesitate 'cause there's not much new going on in tarps right now (from what I can see) and it might be hard to differentiate myself from other vendors.

    And if I incorporated ideas from other tarp vendors, would I then be accused of stealing their ideas?

    These are just things I'm thinking about in anticipation of the day I might start making products for this wonderful hobby. A cottage vendor's reputation is worth its weight in gold, and any insight you guys can provide on how to preserve that is greatly appreciated.

  2. #2
    Boothill's Avatar
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    Quote Originally Posted by SilvrSurfr View Post
    1. Incorporation - I'm no lawyer, but I believe incorporation protects individuals from having their personal assets taken in litigation/bankruptcy, so I assume this one is a no-brainer.
    holy cow, that's quite a post and i will admit i skimmed through most of it, but did read this first part......

    and can tell you from first had experience that incorporation doesn't protect you all that much......your personal fiances are still pretty much on the line even if you have the name of a corporation and tax i.d. between you and your business protecting you....maybe there is a better way out there to do it, but i know most people do it this way, and it's not much of a barrier to your personal finances, just so you know

    boot
    The surest sign that intelligent life exists elsewhere in the universe is that it has never tried to contact us. ~Bill Watterson

  3. #3
    Senior Member olzeke's Avatar
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    generic quilts, and hammocks abound. No one expects their BK burger to be all that different from McD's, yet there are subtle changes. There is a plethora of burger joints. Who we choose to buy from is mostly about location.

    For cottage industries, I do not think there is much protection. Even Western Mountaineering has to make their bags similar to others. They continue in business because of the quality of product. I expect the same will be said of many of our quality makers of hanging gear.

    Treat people right, and make a quality product. Sure, OES has communication problems, but the tarp is first rate. McHale is somewhat a PR disaster, yet his packs are so far above the rack products that folks have a genuine cult about them. I think the example shows you can make mistakes, as long as the gear is great.

    Anyway, this may just be a ramble, but it is what I think.

  4. #4
    all secure in sector 7 Shug's Avatar
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    c. What if I sold an underquilt called the Frankenquilt? Would I have to ask Shug for permission to use the name even though he has no legal rights to the name?
    Good one!
    Who would name a UQ Frankenquilt? Only I.

    You really put some thought in your post.
    Good read.
    Shug
    Whooooo Buddy)))) All Secure in Sector Seven

  5. #5
    gargoyle's Avatar
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    I think Angrysparrow summed it up best....right before he locked up the other "is it legal" thread.
    "we are here to discuss camping hammocks"

    Lets keep it that way.
    Ethics, patents, lawyers, politics...thats some other forum.

  6. #6

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    Hopefully this one just gets sent to the Roundtable Off-Topic forum.

    My best advice is to start with an appropriate lawyer and accountant as your best chance at protection from liability and the tax man.

    "Liability insurance - for what products would it be necessary?"...all of them. You sell me a zipper pull and my 1 year old (I don't even have a grand kid that young) gets in my supplies and chokes on it, I just might sue.

  7. #7
    Senior Member NCPatrick's Avatar
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    Quote Originally Posted by gargoyle View Post
    I think Angrysparrow summed it up best....right before he locked up the other "is it legal" thread.
    "we are here to discuss camping hammocks"

    Lets keep it that way.
    Ethics, patents, lawyers, politics...thats some other forum.
    Be that as it may, there is great merit in discussing the ethics of using other people's ideas and/or name in order to profit from the making and selling of hammock related gear. Good post, and a subject everyone seeking profit should grapple with.


    "Civilization is the limitless multiplication of unnecessary necessities."
    - Mark Twain
    I go to nature to be soothed and healed, and to have my senses put in order.
    - John Burroughs

  8. #8
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    Its thinking about issues like this that separates a Cottage Vendor who will provide consistent service from those who will be in business for a year or two then fold in the middle of taking orders leaving some poor schlub waiting for an expensive item that never comes. Individuals who consider these issues will be the ones who will grow their business as the hobby grows.

    Generally, there is little need for liability insurance and incorporation if you're just a guy with a sewing machine making 10 hammocks a year. Your customer base is not large and the people you deal with are unlikely to sue. At first traffic comes to you from friends and friends of friends. As your customer base expands and you start hearing from people in other states, you should start thinking about these things---and it doesn't matter if you're making suspension products or quilts. Business is business and good practices are good practices. Everybody needs insurance if they are selling to the general public. The biggest problem will come from entry level hobbyists, especially those with checkbooks big enough to buy a big ticket item but lack basic skills and will blame their failures on the producer.

    One of the conditions that exists in this market is that for the most part the products we use are fairly easy to make. Anyone with a thread injector and some relatively easily obtainable skills can make most of them. The Internet has made it possible for anyone to create a website that looks as professional as most others. This is both a blessing and a curse for us as consumers. The pursuit of profit among them allows for expansion of the availability of products causing competition which keeps prices low, quality high, and promotes innovation in pursuit of a marketing edge, but it will introduce vendors who decide that, because they have some extra material left over from their last DIY project, they'll create a website and announce to the world that they are now in business. While folks like this generally don't do much business before they fold, that's little consolation to the guy who sent him a hard earned $250 plus shipping.

    Another result of the nature of the ease at which most products can be made is that many vendors develop an extremely loyal following. There are many reasons for this. Friendship, good service, exceptional workmanship, good PR and advertising, peer pressure, and Hero Worship are among them. This might explain some of the reactions to the former post.

    One other thing I'll add is that the dynamic in this market is not currently one where the "big guys" are taking business away from the Cottage Vendors. Its pretty muh the opposite. Most folks, myself included, come here with a hammock like an ENO (mine was a Crazy Crib) and then move up to a Warbonnet or something like it. Proft, and the pursuit of it, is not bad. Eventually, this market wll get big enough that some large manufacturer (and no, I'm not talking about Hennessy or even Grand Trunk) will start making hammocks of higher quality but at a the kind of price that comes with economy of scale. When you produce 20,000 quality hammocks a week instead of 10 a month you can make each hammock cheaper. This is a good thing, even if somebody goes out of business because of it. The best way to keep from going out of business if this hapens is to invest the profits you make along the way into methods of production that will keep you competitive in a growing market. There will still be the artisans who make quality products by hand, but they will remain as expensive as custom work generally is.

    Nearly ten years ago, I was a Cottage Vendor in the reenacting community. I made reproductions of field rations from WWII and Viet Nam (for those in the know, they were K Rations and C Rations). I started making them for friends who showed them off to other friends and I started getting inquiries. I began making larger batches to sell at events, and id did some sales on the internet (I gave up a lot of weekends filling orders). A very large event was scheduled and I had the opportunity to make rations for more than 300 people for a day. I dealt with all the issues Silver Surfer mentions regarding poaching ideas and the like. They were aggravated by the fact that I was producing reproductions of items produced for the government 70 years ago, and thus were in the public domain. I was able to protect myself by using watermarks, small errors in printing, and using methjods of production different from the original. Your ideas are covered, albeit lightly, by copyright once you make them public. If you can prove you had the idea first, you have the right to it. In the end, however, its a difficult thing to prove. If someone copies something but introduces a subtle variation or improvement, the claim of infringement is probably not going to be successful, especially if its on something that is easily made. Gramma might be right that Sally Sue copied that idea she had for making that apron, but she's not going to win in court if Sally Sue sells more of hers at the Church Bazaar.


    I will also say that in the end I decided to stop producing the rations, and for reasons that many nascent cottage vendors might. The liability issues associated with food are enormous. There was also going to be a substantial investment in machines to produce cans and boxes that would allow me to make more product than sitting at my table with a printer, Exacto knife, and glue did. Had there been more potential for profit in that market, I might have done it. While it might have been neat to quit my job and follow that dream, the reality is that the WWII and Viet Nam reenacting market is a small one, and will remain so. The Hammock Camping market, OTOH, has potential to make an individual with an innovative and analytical mind, good workmanship, and good business sense a comfortable income----but that's not guaranteed either.
    Last edited by sargevining; 06-09-2012 at 10:10.

  9. #9
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    There is little difference to the businessman between being sued by someone with no chance of winning and being sued by someone with a possibly legitimate claim. Both will make money for the lawyers on both sides, the only real difference is how much its going to cost you, unless you live in a "loser pays" state.

    This is what insurance is for. Insurance is not to protect the buyer, it protects the vendor. The main benefits that come from a vendor having insurance is that a good vendor has less of a chance of going out of business from the costs of even a frivolous claim, and those with a legitimate claim are almost assured of receiving damages from a vendor who might go out of business due to the amount and thus be unable to pay.

  10. #10
    Dutch's Avatar
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    A year or two ago I would say the community policed itself very well. We have grown and now I see the ideas are taken and gear is copied from start up venders and they really aren't taken to task about it. I doubt it can be reversed but I think it is a shame. There was much more Diyers colaberating on new ideas before. I have heard people say they don't want to post new ideas because they don't want someone else to profit from it. All this reduces innovations. I guess all things grow and growth changes things.
    Peace Dutch
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