Dealer Problem

[davelepka 4]

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they were't taking any new orders as KK still owes them money for gear that has been shipped

This guy's working both ends of the deal. Not unheard of, but then to come online and try to defend yourself to boot, that's messed up.

What a fucktard.

[hcsvader 1]

This was posted on the skysurfer forum (australia skydiving forum)
http://www.skysurfer.com.au/forums/topic/9510-stolen-rig-from-karnage-krew/

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Sorry to send out this email, but I have lately been involved in getting a refund from Karnage Krew for a canopy I had paid for and never recieved. I paid for my canopy in mid November, last year, and was constantly being told that it would arrive next week. Well next week never came. Finally after 3 months of being given the run around I was fed up and emailed the manufacturer who promptly informed that the order had never been placed and would never be filled as Karnage Krew are a long way behind on their account and any money recieved would be put against outstanding debts. Until Karnage Krew had caught up with its account, they wouldn't be supplying them with any more product. This particular manufacturer has since supplied me in my hands with my new canopy in 3 working days from the time I deposited the payment for the canopy, what a fantastic service, If any one is interested I am happy to let you know privately who it was as they are amazing to deal with.
But more about Karnage Krew. They are promising that they can supply new complete systems for an amazing price, but at the current time, at least 5 new jumpers have paid well over $8000 each and when they have contacted the manufacturers, the orders have never been placed.
You only have to look at dropzone.com and see what other problems Karnage Krew have around the place. This is not only at Picton but Australia wide and also internationally.
A measure of Karnage Krew is the shop at the Picton dz. They never have any stock, all the gear you need every day, rubber bands, alti batteries, pull up cords, closing loops, gloves, sunnies, etc are unavailable. Their is no gear for students to purchase, a cheap helmet, cost effective alti's, goggles etc. The manager of the shop, Liam, tries to do the right thing but never has the stock at hand. Why is this, these consumables are cheap and good business practice to keep customerts happy.
Its also a strange way of doing business to expect a new participant into the sport to front up with over $8000 without recieving any gear for up to 6 months. They are supposed to be able to have a loaner rig but nobody seems to know where these are and if they are available are being shared by lots of customers instead of the promised one for each buyer.
Be very very suspect off any dealings with Karnage Krew. I personally will never deal with them again, even if they are still operating in the future.

Have you seen my pants?
it"s a rough life, Livin' the dream
>:)

[virgin-burner 1]

that's fucked up..

“Some may never live, but the crazy never die.”
-Hunter S. Thompson
"No. Try not. Do... or do not. There is no try."
-Yoda

[wmw999 2,447]

And all this, folks, is why banks often want you to have a business plan before you start. I'll bet he didn't think this was the path he was starting down, it just ended that way when the advertising and PR budget was given priority over product.

Wendy P.

There is nothing more dangerous than breaking a basic safety rule and getting away with it. It removes fear of the consequences and builds false confidence. (tbrown)

[virgin-burner 1]

or you have your accounting down, coz if you dont..

makes me sad, and i'm deeply feeling sorry for the people that got ripped off their money.

he still has the nerve to sell gear recently tough: http://www.skysurfer.com.au/forums/topic/7082-rig-for-sale/page__p__70083__hl__karnage__fromsearch__1#entry70083

how the fuck can this be even close to profitable!?

“Some may never live, but the crazy never die.”
-Hunter S. Thompson
"No. Try not. Do... or do not. There is no try."
-Yoda

[davelepka 4]

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how the fuck can this be even close to profitable!?

When you don't pay for product, and you don't deliver that product to pre-paid customers, everything is profitable.

I wonder who that brand new V3 actually belonged to? A pre-paid customer? UPT?

[virgin-burner 1]

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how the fuck can this be even close to profitable!?

When you don't pay for product, and you don't deliver that product to pre-paid customers, everything is profitable.

I wonder who that brand new V3 actually belonged to? A pre-paid customer? UPT?

ha! why havent i thought of a buisness-idea like that!?

“Some may never live, but the crazy never die.”
-Hunter S. Thompson
"No. Try not. Do... or do not. There is no try."
-Yoda

[johnmatrix 21]

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he still has the nerve to sell gear recently tough: http://www.skysurfer.com.au/forums/topic/7082-rig-for-sale/page__p__70083__hl__karnage__fromsearch__1#entry70083

Date of listing is over a year ago...

[virgin-burner 1]

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he still has the nerve to sell gear recently tough: http://www.skysurfer.com.au/forums/topic/7082-rig-for-sale/page__p__70083__hl__karnage__fromsearch__1#entry70083

Date of listing is over a year ago...

my bad, thought i've read 2011..

“Some may never live, but the crazy never die.”
-Hunter S. Thompson
"No. Try not. Do... or do not. There is no try."
-Yoda

[johnmatrix 21]

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he still has the nerve to sell gear recently tough: http://www.skysurfer.com.au/forums/topic/7082-rig-for-sale/page__p__70083__hl__karnage__fromsearch__1#entry70083

Date of listing is over a year ago...

my bad, thought i've read 2011..

I wouldn't have been surprised if you'd been right though.

[James.UWE 0]

Shit, what a fucking mess!

I feel very lucky to have ordered/received a rig through KK before all this kicked off.

Looks like he forgot basic business principles in order to get big quick by selling cheap, then kept taking orders to try and pay for previous orders etc etc till the credit ran out.

I feel for the people involved in this!

[mpohl 1]

Sounds like my 8-yr old running his lemonade stand. "Look, I made $12 today!" "No son, you didn't!

Cost-of-goods-sold was $12. Now, you just own your remaining inventory which hopefully will make you some money.

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Shit, what a fucking mess!

I feel very lucky to have ordered/received a rig through KK before all this kicked off.

Looks like he forgot basic business principles in order to get big quick by selling cheap, then kept taking orders to try and pay for previous orders etc etc till the credit ran out.

I feel for the people involved in this!

[dgw 8]

It is, undoubtedly, a shit situation. All I say is this. Gary sorted me back in the day (4 years ago), and it was all good / above and beyond etc. I am disappointed for him and his customers. I have never doubted that he has tried to make it easier for people to get gear.

[cguest4 0]

This all sounds awful. However, I am surprised that people have paid all that money up front to a dealer. When I bought my rig some years back I paid a deposit to my UK dealer and then only paid the balance when the rig was completed, which was when he had to pay it himself.

To avoid anyone losing their money in the future can I suggest you do this, particularly if you are using a dealer based in a different country.

I hope this situation does eventually work out for everyone, even though it sounds highly doubtful right now.

[davelepka 4]

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I am surprised that people have paid all that money up front to a dealer. When I bought my rig some years back I paid a deposit to my UK dealer and then only paid the balance when the rig was completed, which was when he had to pay it himself.

I had this same thought after my last post in this thread. It wouldn't be a bad idea for anyone dealing with a non-local gear dealer (aside from Square 1 or the Sunshine Factory caliber dealers) to use a 'secure' payment plan.

Maybe if you agree to pay 50% (or whatever % the dealer requires) of the purchase price for each component directly to the manufacturer at the time of the order. Mark the check/money order/payment with both your name, and the name of the dealer. The remaining balance is paid directly to the dealer upon delivery. This way, the majority of the money is paid directly to the manufacturer and your name is attached to the order and payment if the dealer should 'disappear'. The dealer accpets the remainder of the payment upon delivery, at which point the customer has their gear, and the dealer can subtract his cut pay the balance with the manufacturer.

It's a plan that gives the small dealers a chance at getting some business that otherwise they might miss out on. If a small dealer wanted to offer me a good price or exceptional service, my concern would be the security of my money and my order. The above payment plan allows for the customer to feel secure in the deal, and still allows for the dealer to make their profit and keep the amount of that profit to themselves.

More or less it prevents what we have here. The dealer never gets their hands on the lions share of the money, rightfully so because they're not entitled to it anyway. The only time they get their hands on someone elses money is after you have your gear, at which point they have the balance of the manufacturers money, which is in their best interest to pay to the manufacturer to maintain the business relationship, but even if they want to stiff the manufacturer and skip town with their cash, the customer has their gear in-hand, and is no longer invovled.

[virgin-burner 1]

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I am surprised that people have paid all that money up front to a dealer. When I bought my rig some years back I paid a deposit to my UK dealer and then only paid the balance when the rig was completed, which was when he had to pay it himself.

I had this same thought after my last post in this thread. It wouldn't be a bad idea for anyone dealing with a non-local gear dealer (aside from Square 1 or the Sunshine Factory caliber dealers) to use a 'secure' payment plan.

Maybe if you agree to pay 50% (or whatever % the dealer requires) of the purchase price for each component directly to the manufacturer at the time of the order. Mark the check/money order/payment with both your name, and the name of the dealer. The remaining balance is paid directly to the dealer upon delivery. This way, the majority of the money is paid directly to the manufacturer and your name is attached to the order and payment if the dealer should 'disappear'. The dealer accpets the remainder of the payment upon delivery, at which point the customer has their gear, and the dealer can subtract his cut pay the balance with the manufacturer.

It's a plan that gives the small dealers a chance at getting some business that otherwise they might miss out on. If a small dealer wanted to offer me a good price or exceptional service, my concern would be the security of my money and my order. The above payment plan allows for the customer to feel secure in the deal, and still allows for the dealer to make their profit and keep the amount of that profit to themselves.

More or less it prevents what we have here. The dealer never gets their hands on the lions share of the money, rightfully so because they're not entitled to it anyway. The only time they get their hands on someone elses money is after you have your gear, at which point they have the balance of the manufacturers money, which is in their best interest to pay to the manufacturer to maintain the business relationship, but even if they want to stiff the manufacturer and skip town with their cash, the customer has their gear in-hand, and is no longer invovled.

well, to be fair, you can direct at least part of the "guilt" to this forum. how many threads were there about how awesome this dealer was? how many threads disappeared or got locked when it was said he wasnt!? think about that..

looking back and saying, "oh dude, that's your fault, how could you!?" seems a little too simple for me..

“Some may never live, but the crazy never die.”
-Hunter S. Thompson
"No. Try not. Do... or do not. There is no try."
-Yoda

[piisfish 140]

OK now the man is down, let's stop the beating please.
GAry did say he would do all he can to get money/gear back to his customers. My WAG is they will need time.
When you have your head in the mud, it is not easy to breathe and get up if people continue to press you down.
I'm not suggesting you all praise Gary, or send him money or more orders, just let him breathe.
I have been in very uncomfortable financial situations, and still not very balanced, but getting better. It did happen to me that it involved fellow skydivers (I was always on customer side, receiving gear and being late paying), and they got their dues, late but they got them. And boy I did feel crappy. Now if I am not paying immediately, I am not ordering. Lesson learnt.

scissors beat paper, paper beat rock, rock beat wingsuit - KarlM

[shropshire 0]

Agreed - but Caveat emptor.

If something looks too good to be true - it generally is.

(.)Y(.)
Chivalry is not dead; it only sleeps for want of work to do. - Jerome K Jerome

[lisamariewillbe 1]

I did not buy gear from them, I just shipped a few hundred dollars worth of sweatshirts to him 4 years ago. When I contact him its always one thing or another, cat sick, girlfriend sick, money problems and until I started reading all this stuff I was "Okay cool, I can wait"

Personally at this point I wouldnt trust him and I am confident I wont see a dime what Im owed.

Sudsy Fist: i don't think i'd ever say this
Sudsy Fist: but you're looking damn sudsydoable in this

[Rigless 0]

I had to send him a huge box of Larsen&Brusgaard stuff..

"All limits are self imposed." Icarus

[pnuwin 0]

This won't be good news for those owed money and gear. I was at the dropzone today and the Karnage Krew gear shop was gutted. No stock, not even a pullup cord. It looked like a new business is setting up in its place. Not a gear shop though, just a coffee shop.

Very sad to see this go so bad for so many people. I really hope Gary comes good and finds a way to at least refund people.

[nigel99 474]

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It is, undoubtedly, a shit situation. All I say is this. Gary sorted me back in the day (4 years ago), and it was all good / above and beyond etc. I am disappointed for him and his customers. I have never doubted that he has tried to make it easier for people to get gear.

Disclaimer - I have never met or dealt with KK. Business's do go under and sometimes it is due to poor customer service, sometimes poor business practice or knowledge. But sometimes all it takes is a few events of bad luck to take a business under. Granted alot of people are out of pocket in to fairly large sums of money. Under UK law at least if you paid on a credit card there is quite alot of recompense available it is something people could look into.

From the outside looking in... It looks like Gary is a "nice guy" who tried to bend the rules and go the extra mile for customers. The problem looks like the "nice guy" persona over-took the business needs and it all got into a big mess.

Experienced jumper - someone who has made mistakes more often than I have and lived.

[airtwardo 7]

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Those demo rigs were purchased before the new company even opened it's doors. They are not I'll gotten gains. They were purchased with start up capital.
Again, you continue to speculate.
You also don't know what agreements I have with manufacturers over those demo rigs an what percentage they own of them. Please stop speculating. The rest you say 'may' be right, but stop with the speculation as all you are doing is making a situation worse for me.

Just a quick comment...for the jumpers that might be unaware~

Some manufactures offer partial or full sponsorship to skydivers, gear at either greatly reduced prices or even free.

When receiving said sponsorship, you should be sure you understand THEIR policy regarding the resale of those items.

You usually need to hang onto the item for a specified period of time, in my case, one sponsor recommends three years.

They aren't 'giving' you gear so you can line your pockets by selling it at profit for less than wholesale, that can hurt their relationship with their dealers...it's been done and pretty much always ends bad.

Sounds to me like that's kinda why Gary can't liquidate those assets, the 'demo rigs' are basically on 'lease' from the manufacturer until such time their value depreciates enough to match what he 'invested' in them.

If he were to sell off those rigs, it WOULD be stealing so to speak...kind of like trying to sell a car you leased from your employer.

~ If you choke a Smurf, what color does it turn? ~

[davelepka 4]

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Business's do go under and sometimes it is due to poor customer service, sometimes poor business practice or knowledge. But sometimes all it takes is a few events of bad luck to take a business under. Granted alot of people are out of pocket in to fairly large sums of money

This was poor business practice, plain and simple. The large sums of money that people are out were mis-appropriated by Gary, and used for something besides paying for the gear that was ordered. That's not 'bad luck', or circumstances beyond his control, it was a willful mis-use of funds that were not his, and that he could not replenish.

I don't care if the guy was facing jail time or starvation, the money wasn't his. It was in his possesion for one expressed purpose, and that was to pay for the gear the customers ordered.

Beyond all that, we're not talking about a couple hundred bucks the guy blew at a strip club. There is more than one complaint of a full rig ordered, to the tune of $8000 each, with no part of the order filled. Just based on what we know from this thread, it's well over $10k that is un-accoutned for, and that doesn't happen overnight or by accident.

[airtwardo 7]

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Business's do go under and sometimes it is due to poor customer service, sometimes poor business practice or knowledge. But sometimes all it takes is a few events of bad luck to take a business under. Granted alot of people are out of pocket in to fairly large sums of money

This was poor business practice, plain and simple. The large sums of money that people are out were mis-appropriated by Gary, and used for something besides paying for the gear that was ordered. That's not 'bad luck', or circumstances beyond his control, it was a willful mis-use of funds that were not his, and that he could not replenish.

I don't care if the guy was facing jail time or starvation, the money wasn't his. It was in his possession for one expressed purpose, and that was to pay for the gear the customers ordered.

Beyond all that, we're not talking about a couple hundred bucks the guy blew at a strip club. There is more than one complaint of a full rig ordered, to the tune of $8000 each, with no part of the order filled. Just based on what we know from this thread, it's well over $10k that is unaccounted for, and that doesn't happen overnight or by accident.

Unfortunately many in today's business world don't understand that, or if they do the don't abide by it.

It's NOT cash flow, and the only asset to the business is the projected profit from the transaction...now if your supplier doesn't invoice you until the product is ready for delivery...say maybe weeks or months from when you receive payment, nothing wrong with holding the customers money in a safe interest bearing account of some kind.

You make money on someone else's money, which is also profit.

When as a business you start to float yourself 'loans' by using the receivables for things other than the designated accounts payable...you're running a pyramid, and as with all Ponzi business plans one hick-up and everything tumbles.

I understand how trying to grow a business fast it may be tempting to parlay the money coming in, but unless you have 'real' assets to liquidate, to cover that 'appropriation' in case you gamble incorrectly...then the 'fast & loose' comment is quite accurate.

I don't think Karnage started out with the intention of failing a business for personal gain, and hopefully he will be true to his word and eventually make things right with everyone...I know people in similar circumstances that both have and have not.

That being said... all I truly know of the business is what I've read on here over the years, great prices on popular gear.

In some cases it seemed prices almost too good to be true, I know what's all involved in running a 'small' business and I couldn't understand how this one could be making money...I figured I was either missing a few things in the equation or that he was turning stuff for little or no profit, basically donating his time to get lots of equipment into the community.

Appears there 'was' something in the equation that wasn't right, and once that ball starts rolling down hill, it's REALLY hard to stop it.

Hope everything gets hammered out in a timely manner to everyone's' satisfaction.

To Gary~ I don't doubt that your intentions were honorable, hopefully your actions to resolve will be as well.
I would caution you though in regard to recent posts offering future down-size trade ins ect.
Again... good intentions not withstanding, when a business is sinking, just keep bailing water to float. Offering future caveats that may or may not happen is just adding water to the boat.

If/when things turn around and you feel you owe someone something more that contractually obligated....THEN make the offer, if business allows.

Making an offer like that now, comes across as weak justification, almost like an 'excuse' for mistakes made...especially to people owed. Make them 'whole', and then apologize with a bonus if possible. From a business stand point, you're offering something you don't currently have and may not be able to come up with...and isn't that kinda how this mess started?

~ If you choke a Smurf, what color does it turn? ~