My experience, including 2014. Self insurance (cookie jar) statistics

[ricarmic]

As I'm going through the painful task of yearend book keeping, I figured now is probably the best time each year to republish this for those who are interested:

Notes:

-I live in the stamp collectors world, so these results are all from postage stamp selling categories

-this includes items lost to "crime" as well.  "Crime" is defined as situations where I think people purposefully buy with bad echeques, or claiming lost in transit but that is only my best guess.

-I sell a lot of stuff internationally, my estimate is 35% of my packages go outside North America

-the numbers below are specific to eBay sales. As I mentioned in other threads, I experience losses both real and "crime" related via the other online venues I use so package loss rate is not an ebay buyer issue.

It is also worth noting that for 2014 I have 3 types of insurance:

1. Self insurance for the small stuff

2. Canada Post for the first $60 or $100 only when items are sent expedited, expresspost, registered or trackable (I rarely use tracking unless something like a zero feedback high value shipment, or my spider senses are tingling!)

3. 3rd party insurer (Hugh Wood) for stuff over $200

2014 results

 % of shipments = .0051 = 1/2 a % of packages are lost, so about  1 in 200 packages are lost

 % of sales = .0040 = .4% of sales ie less than 1/2 of one percent loss rate

     10 "lost" in 2014 USA(2) Nepal(1) China(2) Brazil(3) Germany(1) Russia (1)

       2 believed to be lost to "crime" (China)

       5 lost and unrecovered(so far) USA(2) Brazil (2) Russia 

       3 repaid (Buyer advised delivery later and repaid: Nepal,Germany,Brazil)

2013 results one half of one percent of sales loss rate:

0.51% "insurance" loss rate (10 unrecovered losses USAx3,Argentina,Chinax3,France,Israel,North Korea)

   0.3% as a result of "crime" (6 shipments)

   0.21% as a result of items lost in the mail (4 shipments)

(Note in 2013 2 packages “lost” and later arrived and Buyers repaid(Brazil, Russia), 1 package loss partially covered by Canada post, no losses covered by 3rd party insurer)

2012 results - under 1% of sales loss rate:

0.83% "insurance": loss rate (unrecovered loss 9 shipments Argentina,Australia,Brazil,Canada,Chinax2,Indonesia,Russia,Turkey)

   0.78% as a result of "crime" (2 shipments)

   0.04% as a result of items lost in the mail (7 shipments)

A reminder that 2012 is the year that CP covered the small packets, I had a few recoveries this way. 

I had a big crime loss within Canada (this was also spelled out in a different thread).

[ricarmic]

Since I put "cookie jar" in the title, I also converted the numbers into "cookie jar" numbers:

If looked at as a % of sales one requires 10c per $25 sales value into the cookie jar

If looked at as an amount per lost package one requires 14c per package into the cookie jar

[mr.elmwood]

Those numbers substantiate what I have always said, loss rates are very low. I had about 600 sales in 2014 and lost one parcel. One. In 2013 I think I lost one (1) out of 600 and that was to Mexico. Do the math on that one. Buyer filed INR and would never answer email after that. Yeah.

So, 2 out of 1200. What would I be insuring against?

There is the accounting belief that we only lose direct costs. We cannot lose unrealized profit. My direct cost loss for two calendar years is $19 (nineteen).

[rockp5233]

Hi ricarmic,

Thank you to share these interesting number...

[e_knny]

My loss rate is about 2% and I don't even ship to "risky' countries like any in south america, russia, nepal, africa, eastern europe, etc

I get so many "lost" packages to germany, france, and usa its almost ridiculous

I always ship airmail too

It must be that my category has more dishonest buyers

[mr.elmwood]

My rate of "lost" parcels dropped as soon as I went to PayPal shipping. I had a further drop when I stated using CP labelopes.

I

[reallynicestamps]

Somehow I am not surprised that the seller of collectible stamps has a low loss rate, while the seller of DVDs has a high-ish one.

I am a little surprised that selling car parts is a low loss category. Are your guys older than the DVD buyers, I wonder?

Now if someone could explain to me why dolls and horse tack seem to have so many bad transactions (on both sides)...

My personal bugaboo is bidders on religious and spiritual books. One of our posters with many problems sells religious regalia. What is it about 'religious ' people that makes them such bad customers. And I identify as a born-again Christian, so this is not a slam.

[decal-fx]

My lost rate is some where between ricarmic & Mr E. I make reproduction decals for vintage Motorsport, Outboards, snowmobiles etc.  For what I can guesstimate the majority of my clients are male between 44-65.  80% US , 7.5% Canada, 7.5% OZ & New Zealand & 5% the rest of the planet.

[38e_avenue]

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@ricarmic wrote:

(I rarely use tracking unless something like a zero feedback high value shipment, or my spider senses are tingling!)

That's exactly what happened to me recently. I had a buyer who ordered 5 items for 100 dol. total. He didn't use the "make offer" feature, and his choice of items was rather strange so  "my spider senses were tingling". The package should be shipped as Light Packet, with no insurance. Instead, I decided to add a few bucks to the postage and send is as "Tracked Packet". And what happened? 3 weeks after confirmed delivery I got a chargeback! Fortunately, I was able to provide a tracking number and  I  W-O-N  the case!  

[ricarmic]

Hi 38e! That is good to hear!

If one has been selling mail-order long enough, as you've pointed out, one gets to know situations when to be more concerned about potential "problems".

I'm glad to hear you made a good call on that package! 🙂

[michaelbb2]

Interesting stats.  I went back on my 2014 year and  I had 30 lost packages out of 3528......so 0.85% of packages lost.....0.79% loss of annual sales $$  total.   11 international and 19 Canadian.    All lettermail....no tracking.      All coins.

[reallynicestamps]

While that is a low number of losses, you might want to consider using Cookie Jar Insurance to cover your financial losses. Not so much the coins, since you are willing to send them LetterPost I guess they are inexpensive, but the postal costs.

I can't recommend Hugh Wood International enough as an insurer for dealers in collectibles, especially those who do shows. They not only cover mail orders, but shoptheft and your stock on its way to shows and at shows. And the annual premiums are better than more general insurance companies. They really understand collectors and collectible dealers.

HWI are a British company with offices in Toronto. Gina is the one to talk too. They are backed by Lloyds of London, btw.

[ricarmic]

Hi Michael! I was surprised that you had that many Canadian losses as compared to the international. I just had my first Canadian loss in a very long time, and it was an expedited package.

Do you have a sense that some of the Canadian losses were "crime" losses vs actual lost in mail losses?

I would guess that coins might more easily fall to pilfering internationally as they would be visible in the xrays etc if the country's customs uses such a thing?

[michaelbb2]

I do get that sense everytime one goes missing that I'm getting screwed over but that's a risk that I take by using letter mail with no tracking.  Anybody can say that the item did not arrive and I can't argue since I have no tracking number to prove them wrong.  On the other hand given my low value item list, if I used tracked shipping for everything I wouldn't make any sales.  Not too many people would pay 1.99 for a coin and 10.00 shipping.  I think my losses are a fair cost of doing business in my category.

[ricarmic]

Michael, a quick extra question, when you ship, are the coins in the wee cardboard coin holders? I ask this because in the days before the internet, many of my customers paid with cash. One always knew when there were coins in the payment because the postal equipment "scrubbed" the envelope as it went through the system and one could see a complete outline of the coin in "dirt" on the outside of the envelope. Usually the customers were taping the coins to a piece of cardboard or paper to keep them in place.

If you're using the coin holders etc that won't happen but I thought I would mention this recollection just incase....

[michaelbb2]

Most are sandwiched between two rigid pieces of cardboard....UNC coins are in 2x2 holders and CIRC coins are wrapped in paper slips. You are right that the contents could "transfer" to the outside of the envelope. When I first started off shipping I had a couple issues with that and I quickly corrected my shipping style. To keep shipping low though, I must keep the envelope thin (5mm or less) or Free Shipping is just not feasible for me.....on single item shipments anyways. Multiple orders are more "hidden" as I can have more packaging material in the oversized lettermail.