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San Jose bakery loses thousands of dollars after Tesla reportedly cancels large order (www.nbcbayarea.com)

submitted 6 months ago by [email protected] to c/[email protected]

73 comments fedilink hide all child comments

Two days after taking a job for Tesla, owner of The Giving Pies got a simple text message canceling the order

A catering contract to celebrate Black Heritage Month turned into a tough lesson for a Black-owned bakery in the South Bay earlier this month.

What started as a $16,000 deal ended up costing the small business owner thousands of dollars instead.

On Valentine’s Day, the owner of The Giving Pies in San Jose's Willow Glen neighborhood received a pretty sweet call from a representative with Tesla: a catering job for thousands of mini-pies for a Black History Month event.

Owner Voahangy Rasetarinera, who started the business out of her home in 2017, says both sides agreed on a quote and exchanged an invoice for 4,000 pies for delivery this week. Because of the tight turnaround, Rasetarinera asked staff to work extra hours, she bought ingredients and packaging supplies and declined at least three other catering jobs.

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[–] [email protected] 229 points 6 months ago (1 children)

This sucks but it is a hard lesson about dealing with large companies. If any company wants anything that doesn't comes off the shelf of the store, they have to pay upfront. Pay has to be by a certain amount of days in advance of delivery date or the date is not guaranteed and will be late. Work doesn't start until payment is done. If they want to pay after delivery, sign a contract, require an advance of at least half of the bill or materials cost (whichever is highest), non-refundable, include a cancellation fee. Put this shit up as terms of service on a website and direct everyone to that page whenever you are contacted by a new client. The larger the client company, the more important it is to be this strict. For you it might be a bankruptcy inducing amount, but to them it will be immaterial pocket change, so you have to hold your ground.

[–] [email protected] 159 points 6 months ago* (last edited 6 months ago) (7 children)

I was a small business owner in this same situation. I got a contract, I got partial payment up front, then they reneged upon my finishing the job and asking for the rest of the payment. They said they'd pay me 10% of what they owe, AND demanded additional services for free. I took my contract to a bunch of lawyers, all who said the same thing "They're too rich to sue. They will delay, stall, and after years, even if you won, they still probably won't pay." What they owed me, they bragged about paying every time they flew their private jet. They could easily have paid, but instead they decided to destroy me and my company.

This isn't something the small business owner can protect against. To the rich, none of us or our laws matter.

[–] [email protected] 79 points 6 months ago (2 children)

The partial payment wasn't large enough if it left you wrecked at the end. Generally the partial payment should pre-pay to cover all of your expenses and labor. The final payment is the profit margin. That way you are never on the hook for a potential loss and will always break even.

So for the bakery, they should have had a full prepay policy on all special orders. Even if "customers" walked away because of the policy.

[–] [email protected] 25 points 6 months ago* (last edited 6 months ago) (5 children)

I don't know what you think profit margin is but it's not much. At the point of getting full expenses you might as well ask for full payment.

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[–] UNWILLING_PARTICIPANT 8 points 6 months ago

Yeah then at least everyone gets paid, and the workers walk away with a shitload of free pies!!

[–] [email protected] 36 points 6 months ago

Name and shame my dude

[–] UNWILLING_PARTICIPANT 29 points 6 months ago

*Reneged :)

[–] [email protected] 12 points 6 months ago

The rich no longer fear the guillotine.

[–] [email protected] 12 points 6 months ago (1 children)

This is why small claims exists. $7500 and THEY have to prove they DON'T owe it. If they don't show up, you win summary judgement. That should cover most things and even if it doesn't, it will all least soothe the wound.

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[–] [email protected] 11 points 6 months ago

Can you tell us who? Maybe someone will “run into” them.

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[–] [email protected] 171 points 6 months ago (5 children)

It is fascinating to watch the rise and fall of Tesla's reputation. They went from "the cool brand" everyone wanted to something that automatically gets you labelled as a sucker and a douche, almost overnight.

[–] Bakkoda 67 points 6 months ago (2 children)

That's usually what happens when a douchebag worms his way into a company, takes it over and squanders it.

[–] [email protected] 25 points 6 months ago (1 children)

See: Reddit

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[–] [email protected] 8 points 6 months ago* (last edited 6 months ago) (1 children)

Sadly, Musk built the cool brand reputation before destroying it, so this doesn't really apply. Nobody ever really heard of Tesla - the car brand - before Musk.

[–] [email protected] 10 points 6 months ago

This was my first exposure to Tesla

https://grandtournation.com/car-show-news/top-gear/top-gears-fight-against-tesla-jeremy-clarkson-clarifies-exactly-what-happened/

[–] [email protected] 11 points 6 months ago (1 children)

I'm tempted by Lucid products right now.

[–] [email protected] 15 points 6 months ago (1 children)

Since April 2019, Lucid has been majority-owned by Public Investment Fund, the sovereign wealth fund of Saudi Arabia.

[–] [email protected] 7 points 6 months ago (1 children)

Dang. Can't win.

[–] [email protected] 5 points 6 months ago

Zero Motorcycles is still privately owned 🤷 lol

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[–] [email protected] 114 points 6 months ago (1 children)

There is such a power disparity between large corporations and normal people or small businesses. A corporation can make a small decision that would devestate a person or small business and it doesn't affect them at all.

[–] [email protected] 52 points 6 months ago (1 children)

I don't think this is legal, since it's a custom order. This is not like a consumer ordering an off the shelf product, it's more like a verbal contract IMO, but IANAL.

[–] [email protected] 41 points 6 months ago (3 children)

depends on the cancelation clause, usually there would be a time frame before the event they could cancel. There should also be a deposit-especially for events this large...non refundable would have been ideal especially if you need to get materials & OT for staff.

[–] [email protected] 22 points 6 months ago (5 children)

They exchanged an invoice which is closer to a quote unfortunately, as invoices are not contracts with clauses.

What sucks is it would cost her more in lawyer fees to sue than she lost. Fuck Tesla.

[–] [email protected] 15 points 6 months ago (4 children)

I don't think you can bring a lawyer to small claims court, to prevent this exact scenario. Tesla might send a manager or nobody. They can't send their legal team.

[–] [email protected] 14 points 6 months ago

Who Can File or Defend a Claim?

Corporation or other legal entity — A corporation or other legal entity (that is not a natural person) can be represented by a regular employee, an officer, or a director; a partnership can be represented by a partner or regular employee of the partnership. The representative may not be an attorney or person whose only job is to represent the party in small claims court.

Source

[–] [email protected] 7 points 6 months ago (2 children)

IDK if 16k is small claims, but if it is, she should definitely take it there.

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[–] [email protected] 4 points 6 months ago

Yeah, if you're an inexperienced caterer this is an unfortunate lesson.

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[–] [email protected] 9 points 6 months ago

big companies don't care, they are rich enough that they don't have to abide by contracts with little people.

[–] [email protected] 6 points 6 months ago (1 children)

So if Tesla is stupid enough to order again, she can say Okeydokey I'll be right on it, and when the delivery is due, she can just say Sorree I'm not gonna deliver anything anyway, have a nice day?
That's not a viable business environment, and surely there must be regulation to prevent businesses fucking each other off like that.

[–] [email protected] 11 points 6 months ago (3 children)

I'm not blaming the business owner here but not collecting payment upfront was a monumentally poor business decision.

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[–] [email protected] 65 points 6 months ago (3 children)

I'm betting managers were planning this, but when Musk found out it was for black history and ordered it canceled.

And while it is easy to just get paid in advance, sure, but that is a double-edged sword. Many companies and wealthy individuals will just use another company.

[–] [email protected] 29 points 6 months ago (2 children)

Then let your competitors wind up losing thousands of dollars when they cancel on them.

[–] [email protected] 11 points 6 months ago (1 children)

or making a life changing sale, it's a gamble.

[–] [email protected] 10 points 6 months ago

If someone else wants to gamble their livelihood, that's on them.

[–] [email protected] 5 points 6 months ago* (last edited 6 months ago) (1 children)

Companies usually don't. It only makes the news when they do.

Worth noting sometimes companies often restrict expenses with crazy requirements. Sometimes they have no choice because they are prohibited from paying for something like food in advance.

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[–] [email protected] 12 points 6 months ago

This is my thought as well. Such a predictable pos.

[–] [email protected] 10 points 6 months ago

Should have told him it was for Musk Appreciation Month.

[–] [email protected] 57 points 6 months ago (1 children)

Seems like it would be fairly simple to at least sue them in small claims court. California allows up to $6250 for businesses.

[–] [email protected] 33 points 6 months ago (2 children)

I’m really surprised that, given the size of the order and the tight time frame, that she didn’t ask for the money up front…

But yeah. If she has anything in writing she should go to small claims 100%

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[–] [email protected] 49 points 6 months ago

I used to live down the street from The Giving Pies when they first opened. They make great pies and the staff were really nice. Sucks to see this news!

[–] [email protected] 46 points 6 months ago (1 children)

https://www.ktvu.com/news/business-booms-at-san-jose-pie-shop-after-tesla-backed-out-of-large-order

The pie shop is doing better now than it ever was and Musk now has a new pile of shit he just stepped in, all in all a happy ending

[–] [email protected] 9 points 6 months ago (2 children)

The article does not say that she recouped her losses, so I'm not sure if it really is the happy ending you're claiming.

Don't get me wrong, it's nice that the San Jose Sharks made a $500 order, but she's out $6000 and I think the article would have mentioned if she made that and more back.

Tesla seriously fucked this woman over. And not just that, but fucked her black-owned small business over by claiming the order was for Black History Month, which makes it far, far worse. The only one who can make it up to her is Tesla.

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[–] [email protected] 40 points 6 months ago (1 children)

Man this is some trump tower level bullshit tbh

[–] [email protected] 18 points 6 months ago

Rasetarinera says after her story went viral, Tesla offered to buy the pies and a tour of their factory. She says she still hasn’t received a payment, so she’s focusing on other customers like the San Jose Sharks, who spent $500 on pies after hearing her story.