Long post here, but please, wade through it!
Do what suits your personality. If you are doing this for a living, both approaches are valid, both have pros and cons. Either way, you need to understand marketing and selling these days in what is very much, a saturated market.
One by-product of an over saturated market is the demands of buyers naturally increases, as does the tendancy to "have their cake and eat it." If you frequent player forums, you'll see, many fully expect to to commission a project and then back out without comeback at any point. No use it getting cross about this, it's just one of the things that happens when supply outstrips demand. I'm coming uo to 30 years of professional making and it's only two years ago that I started to have a formal agreement with customers who commission. And it was a response to a changing market. It just hadn't been required in the past.
Make life easier for yourself: Learn how to deal with enquires: Have a routine you go through - for instance, if someone emails me and has a whole list of questions, before addressing any of their questions I send them a price list first. It saves me spending half an hour answering questions when my work my be out the person's price range. Which it should be for the majority of people who contact you. If it isn't your pricing may be wrong or your marketing is reaching enough people.
Then, having seen the prices if they still have a few simple questions, I answer them. If the questions lead to yet more and more questions, you may have a tyre kicker on your hands, or you may have someone who needs a lot of reassurance. Either way, at some point you have to stop answering questions and say - "if you are serious about commissioning my work, you need to send me a deposit." Then I send them a copy of the agreement. If they are serious, they order, and we go more into detail about what it is they want. To do this - to stop answering questions and "walk someone down to the till" is easier if you are already "established" and have a "brand" of sorts, which I do. If you are just starting out, building and selling may be a better way to go, and allow you to practice dealing with enquiries in a way which causes you less stress and sorts out the serious from the non serious..
Another thing you might want to consider is your right to cancel an order. I've had to do it myself a couple of times. Sometimes you might take a commission from a person who is very pushy, very demanding and wants more and more of your attention without seeing it from your point of view. Ironically I never came across this type of customer until I started making cheaper work. I had a very difficult chap a few years ago. He was trying to change the nature of the "handshake" deal we had, it was causing a lot of stress. I asked a good friend who was much more experienced in negotiating than I for advice. He asked me a simple question:
"Can you afford to do without their commission?" Then he said "If you can, do without them as quickly as you can. Hand the deposit back. If you can't, then suck it up and know the next time."
Good advice.
Interestingly after a couple of difficult people, I realised the question should be rephrased - "Can I afford not to cancel this customers commission?" You have the right to draw a line. Some makers are not suited to taking commissions, and some customers are not suited to commissioning instruments.
You can of course, avoid all this stress my making and selling. There is a lot to be said for it. But if you take this approach you must be willing to pay a salesman a good chunk of the retail price to market and sell on your behalf. Or you must invest time and energy in marketing and selling your work. Possibly the most cost effective way to do this is to run a repair shop. Then people will quite literally walk through your door. And whilst they are waiting to pick up their guitar, they can play yours....
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I'll build spec guitars, if you like it, we can talk. Locally a buddy of mine is dealing with a nightmare customer.......real pos, never!
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