My experience so far regarding self insuring more items......

[ricarmic]

Hi!

A discussion about shipping in another thread reminded me that when 2013 began I was worried about what impact the Canada Post "no insurance" for small packets was going to have for me because:

-for trackable countries it is frighteningly expensive (I sell a lot of $15-$40 items which make no sense to ask people to spend $20-$40 extra for tracking, if it is even possible, so I have to self insure these now

-I send a lot of stuff to non-trackable countries like Russia, China, South America.

So I went and looked at my "insurance" loss rates. I put insurance in quotes because I include items lost to "crime" as well. Here "crime" is defined as people purposefully buying with bad echeques, or claiming lost in transit when I have identified them as repeat offenders (see other thread for my comments on experience around this).

Note that my loss rate is calculated as a % of sales $, it is not a % of shipments. I care more about what the % of sales lost is so I track it that way.

It is also worth noting that for 2013 I have 3 types of insurance:

1. Self insurance for the small stuff

2. Canada Post for for the first $60 or $100 only when items are sent expedited, expresspost, registered or trackable

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

2012 results - under 1% of sales loss rate:

0.0083% "insurance": loss rate (unrecovered loss 9 shipments)

   0.0078% as a result of "crime" (2 shipments)

   0.0004% 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).

2013 results (to end of June) under 1% of sales loss rate:

0.0074% "insurance" loss rate (all 7 are unrecovered losses so far this year)

   0.001% as a result of "crime" (1 shipment)

   0.0064% as a result of items lost in the mail (6 shipments)

So while the loss rate for actually lost items is about 15 times as much (so far) as last year, it remains well below 1% of sales. Generally I "allow" 1.5% loss rate in my cost models so it is doing well against plan.

Note that the numbers above 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 it is not an ebay buyer issue.

I am also adjusting some of my behaviours for some countries, most notably China. I'm aware of at least one problem "zip code" and I will adjust what I ship to that code or based on what else I see for a given ID in China.

Not sure if this info is of use to anyone else but it was worthwhile as I'd never gotten around to figuring it out until today!

[toff3]

Ric,

The fact that you're a philatelic dealer casts a whole new light on the subject. Am I correct in assuming you use Letter-post and/or  Light Packet service for most of your international sales? In that case, a 5% loss rate is even more unacceptable.

To me, "loss in the mail" means the disappearance of an item due to the mishandling of it in the postal system. It would include mishaps such as theft by a postal worker or delivery to the wrong address (with the recipient not returning it to the mails) but not seizure by customs or fraudulent claim of non-receipt.

Regarding confiscation by customs, I cannot imagine the customs authority in any country seizing an envelope addressed to a private individual containing collectible postage stamps. From what I've read on eBay USA discussion forums, the USPS list of items prohibited from import by certain countries is wildly out-of-date; I doubt that Canada Post's is any more reliable. As Marno says, these lists should be taken with more than a grain of salt.The 100-rupee limit for imports into India that you've come across is surely a joke?! The $20 limit in Canada is bad enough but these days seems to be enforced less and less.

Getting back to the nuts and bolts of your mailings, it seems to me you might as well send most of your orders from abroad in a plain standard or oversize envelope at letter-post rates or, if you insist on adhering to Canada Post's ridiculous regulations, as a Light Packet with a CN22 declaring the contents "Printed Matter" valued at $20 and forget about insurance altogether. I am certain your loss rate to any country would be nowhere near 5%.

Of course, for shipments valued at, say, $200 or more, some form of insurance would be advisable.

Tom 

[ricarmic]

Hi toff!

Generally the majority of my overseas shippments are lettermail or other lettermail and they were/are self-insured.

In the good old days I would small packet stuff to dangerous countries to have the CP insurance, that is not available now of course. That is what worried me when the rules changed in January.

My experience has been that material mailed in a #10 business window envelope with a typed address in the business window (just folding the paypal receipt the right way works for this) has a very high sucessful delivery rate to the dangerous countries. I've even gone so far as to split a shipment across 2 or 3 envelopes so that I can get them all into #10s (only have 50g of room in each).

Note: For any readers who stamp their own envelopes/mail to the dangerous countries, I very strongly suggest you do not put colourful stamps on those packages. I believe that increases the loss rate. I use nondescript (the boring regular stuff) on those packages. My customers are stamp collectors and they expect to have stamps on the envelope. So far I havent had much complaint from putting the nondescript stuff on the dangerous country shipments - if they do ask, I explain that it increases the likelihood that they will receive the rest of the package too!

Material shipped as "other lettermail" is normally what goes astray to the dangerous countries. 

I'm not sure if you've had the pleasure of shipping a lot of stuff to the "dangerous" countries like those I've lost stuff to, I'd welcome hearing your results or those of other folks who are reading this thread, it would be interesting to see if my experience is consistent or worse?

[toff3]

Hi Ric,

Thanks for the further details. I'm still trying to get my head around that 5% loss rate of yours. It has to be improved.

Far be it from me to suggest to you how to run your business but  if I were in your shoes I would take pains to make my shipments look as innocuous as possible. Using letterpost is certainly a step in the right direction but I wouldn't use window envelopes with a typed address. I'd handwrite the address on a regular envelope, making it look for all the world like a personal letter. I presume your return address simply has your name and street address without any mention of philately. Same goes for your O/S envelopes of course: they should look as un-businesslike as possible.

I've sent stuff to most of your "dangerous" countries and really have no complaints but then I'm a low-volume dealer in earth science literature, which is hardly scamworthy. I've used surface mail for almost all my shipments overseas weighing more than 500 g, sent cash in the mail to Germany, France and Russia, etc, etc with no significant problems. I'm a great believer in the ultimate efficiency of the post and in the honesty of the vast majority of eBayers.

One more question: how many of your shipments have been returned (undeliverable, unclaimed, moved...)?

Tom 

[ricarmic]

Hi Toff!

I found your comments regarding typed vs hand written interesting! The reason I have (so far) settled on typed is that it makes it look like a business letter, theoretically just paper stuff if one doesn't look too close. If it were hand written, it (I thought) increases the chances someone thinks I'm a relative sending some stuff to someone. The letters aren't "flat" like they would be if they were only typed pages, they don't bulge out, because they can only "bulge" 5mm anyway.

I also many years ago quit writing the addresses out because as my wife likes to point out, I haven't yet quite achieved a state of perfection - I'd make address typos when I was writing them out. Switching to everything typed reduced my "loss" rate.

As you mention, I do everything I can to make the shipments innocuous as possible, although as it turns out different folks have different ideas what is innocuous!

Regarding stuff returned - usually these are very very rare, maybe one a year. This year so far I had two, one from USA, one from Canada, both were redeliverable - one with address adjustment the other in the USA no address adjustment - not sure why the PO didn't deliver in the first place.

Have had a few situations now where the buyers PAYPAL payment has the "old" address - where I'm sending to the wrong old one. Only ONE time has the package ever come back to me. Some customers have been good and eaten the loss, others make me eat it (which is very frustrating since I sent it to the address they gave me - untrackable of course though!).  these are still very rare, only have maybe one or two of them a year.

Have had situations where material is "refused" in Italy - in one case the buyer told me the taxes were going to be more than the stamps were and to just keep the $$$. The other case I do not know what happened the package came back undeliverable, the buyer never responded, their eBay id saw no activity for the time I watched it afterward. They may have gotten sick or something. Never did hear from them.

I too tend to think of the general "stamp buyer" (and people actually) as an honest person. Having said this, this is my 35th anniversary of being in business and sadly in the last 2 years, I've lost most more material to "crime" than the 33 years before that (over $1,000 worth of stuff in the last two years - about $250 in the 33 years before that). All of it is via online sites (not just eBay). This has daunted my "belief" a bit - it is just like when one gets one negative, it overshadows the other hundreds of positives that you got.

[toff3]

Hi Ric,

I've been mulling over your reply and can't think of a good comeback! Except to reiterate we have to get that pesky 5% loss rate down! It's just not acceptable. But how??

I suppose you wouldn't consider going back to handwriting addresses (carefully and painstakingly to avoid errors) on a trial basis and seeing what transpires? I still believe your mailings should look as unbusinesslike as possible.

About that mailing to Italy that was "refused". Did it bear a customs declaration? Was it returned to you?

I'm surprised returns have been so rare. It leads me to suspect that the majority of your losses can be ascribed to buyers' dishonesty.

Tom 

[ricarmic]

Hi Toff!

Yes both the Italy "refused" items came back to me, and in both cases I ended up with both the stamps and the money - the reverse of what usually happens!

I do find it interesting (just to be clear I mean interesting a positive way) that you and I have the opposite view of what is safer as in the "personal" style vs the "business" style.

I have been trying a variety of experiments with the dangerous countries, I will perhaps try some handwritten ones when I reopen in September.

This reminds me of a funny story, one of my Russian buyers sent his address all Russian (cryllic) and it went expresspost so I had to write out his cryllic address. That was very hard to do, you have to over-ride your printing reflexes as some letters are formed strangely! Anyway it got delivered so I guess I did an ok job!

The good news is that my built in coverage so far is more than covering my loss rate, so as long as that is the case, I'm not going to make major changes to my procedures.

[toff3]

Ric,

I presume the Italy items bore customs declarations, which is why customs held them pending payment of import taxes, correct?

It seems to me the key is to avoid, if at all possible, any outward sign that your mailings valued at under $200 have commercial value. That $200 limit is, of course, my chosen figure, which you may not agree with. Again, I reiterate that I have great confidence in the mails and the honesty of eBayers in general. In fact, I don't maintain a list of risky (dangerous in your teminology) countries but do acknowledge that some countries operate a more efficient postal system than others.

As regards the cyrillic alphabet, it wasn't too helpful of your Russian customer to provide you with a cyrillics-only address. Anglicized addresses work fine in Russia (education standards in Russia are very high, much higher than here) and you'd probably have found it easier to transcribe the cyrillics to English, using a glossary off the internet.

Tom

[ricarmic]

Hi Toff!

Yes they had the CN-22 forms - I have to put something on anything other than the #10 business envelopes (the rest are bubble envelopes).

For fun, I went and looked up how many customers I've had so far that haven't sent an english address (the way I record my customers makes this easy to do).

Note that there were no english addresses within PAYPAL or eBay as any part of the payment process....

Customers who had no english address:

3 from Russia

2 from China

1 from Greece

1 from Turkey

Don't recall if any of these were lost or not....

PS I would never trust the translation programs to translate an address, for these folks I just cut the address right off the PAYPAL payment and stuck it on the envelope (this is the process I usually use anyway - no "Ron typos" that way....).

[toff3]

Ric,

Couple of things...

1) You don't have to put a customs declaration on Letter-post but you do on the identically-sized Light Packet. That's just one of the anachronisms in Canada Post's screwed-up pricing system.

2) I wasn't suggesting you use an internet translation program to translate a Russian address in cyrillics, merely that you can easily transliterate cyrillic characters to English using the glossary available on the internet or in any Russian-English dictionary.

Tom