Self insurance (cookie jar) RICARMICs 2016 statistics added....

[ricarmic]

As I'm going through the painful task of year end 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

-I sell only on .COM, I ship worldwide, and I have no blocks on buyers (but I do maintain the blocked buyer list)

-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, at least 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 only an ebay buyer issue.

It is also worth noting that for 2016 I continued to 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

2016 results

% of shipments = .004 = under one half of 1% of packages are lost, so about 1 in 250 packages are lost

% of sales = .0024 = about one quarter of 1 percent loss rate

   8 "lost" in 2016 USA(2),Canada,India,Oman,Russia,Australia,Bolivia

   1 believed to be lost to "crime" (based on spider senses)

   7 lost and unrecovered(so far). 1 USA advised arrival later and repaid

   1 repaid (Buyer advised delivery later and repaid: USA)

   1 odd situation, other USA buyer convinced me to unblock them and they successfully purchased 3 more items

Things I did in 2016.

-I China & Brazil require trackable shipping, ie lowest shipping $17.50 regardless item size. Number of buyers especially China increased over the year, they began buying batches of stuff to make the postage palatable.

-decided against adding extra custom shipping costs to Russian buyers (not tracking) so far, am also considering doing the same for others

-I sell in US$ so the lower $C rate gives me more room to make packages trackable, which I’ve been doing more to new buyers and/or buyers in scary countries

-I did change my flat rate shipping to Standard Shipping (outside the US) to add a few more days to the est delivery date

 2015 results

% of shipments = .0097 = about 1% of packages are lost, so about 1 in 100 packages are lost

% of sales = .0090 = about 1 percent loss rate

   13 "lost" in 2015 Russia(5) Belarus, Canada, China, French Polynesia, Kuwait, Pakistan, South Africa, Sri Lanka

   3 believed to be lost to "crime" (Russia, ordered 3 separately close together)

   9 lost and unrecovered(so far)

   1 repaid (Buyer advised delivery later and repaid: Canada)

Things I did in 2015.

-I changed China and Brazil to custom shipping requiring trackable shipping, ie lowest shipping $17.50 regardless item size. Number of buyers dropped dramatically.

-am considering adding extra custom shipping costs to Russian buyers (not tracking), however had many sales, including one for $1500 which more than offsets the minor losses.

-I sell in US$ so the lower $C rate gives me more room to make packages trackable, which I’ve been doing more to new buyers and/or buyers in scary countries

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).

[esclyons]

so for 2106 what did you put in the cookie jar, and how much of it was required to cover missing, lost items....??

[Anonymous]

It is the reason that I switched from cheaper mail service with NO tracking number to mail service with tracking numbers more than 2 years and no problem since.  The so-called "cookie jar insurance" is NOT working at all as I sell expensive items and especially when I get the scammers claiming never received their items. 

Yeah I may lose some (possible) potential buyers with those shipping costs (with tracking number) but I sleep better and I don't lose items & items anymore.  I just sold 4 items yesterday and today, all to Australia and United Kingdom with tracking number, those buyers don't mind to pay the hefty rates that Canada Post!

As with mail service with tracking number across Canada & USA, I no longer received "Where is my item?" or "I didn't receive my item".  I used to get dinged by eBay whenever my buyers asked "Where is my item?" or "I didn't receive my item" but no more since I switched the mail service  to tracking number mail service.  Knock on wood.

I wish Canada Post would reduce their insane gouging rates for Tracked Packet, Expedited Mail and XpressPost, so we can sell more items.

[ricarmic]

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@esclyons wrote:

so for 2106 what did you put in the cookie jar, and how much of it was required to cover missing, lost items....??

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Hi Escly!

My cost model (cost of good sold) figures on 1% of sales going into the cookie jar  (so $1 against every $100)

2016 was a great year, I really only needed 24c against every $100 of sales.

So far I haven't gone above the estimated percentage, and as others have been doing I've been sending more stuff tracked in the last couple years than I did before that....

[rose-dee]

Wow, that's an impressive lot of record-keeping you've done there!  Thanks for posting this information.  

Fortunately I've had no items lost (or stolen) this past year, but then I sometimes wonder if my particular line of items and the related Customs description on my parcels helps (really, is it worth stealing a "Sewing Pattern"?).  More expensive non-pattern items go by Tracked Packet, and the really expensive ones by Expedited or Xpresspost, so those have never been an issue.  

Moreover I think I'm lucky in that I generally have a very friendly and responsible lot of buyers.  

P.S. The term "painful task" is oh so true -- I'm glad I'm not the only one who isn't looking forward to my annual bookkeeping with great enthusiasm!   

[hit_the_icebox]

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@ricarmic wrote:

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

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

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Thanks for all the great information! I looked up Hugh Wood and read the application, but I have a couple questions, if you don't mind:

1) Do you pay HW a flat rate per month or annually and then make claims against your policy? Or is it a case-by-case basis?
2) They don't actually handle the tracking or anything along those lines, right?

Thanks in advance, I'm just trying to get my head around how it works.

[ricarmic]

Hi Icebox!

They are like a normal insurance policy, I pay annually, and everything in terms of mailing is as normal, it has to be tracked by the PO or courier.

Their rules are general, ie you pay the premium (I pay annually) and it covers everything that fits the rules. They'll only insure tracked material and there will be specific rules about what they do and don't cover. It also has a deductible, mine is $100, - so if I lose a $300 expedited item, I get the Canada post $100, I lose the $100 deductible and they would cover the last $100. (the amount of insurance you pay is based on your estimate of how much (ie $$$) of stuff you ship in a year that would be covered, make sure you take time to be accurate about that estimate)

I haven't had a claim that was covered by them in a few years so I can't say how easy it is. The last time I had a claim I needed something from the buyer to confirm they did not receive it. I don't know what the specific rules are now, hopefully I won't find out for some time!

Their rules may differ depending on what it is that you are selling so it would be good to talk to them to make sure it would work in your case.

Hopefully I covered your questions, if I missed something, let me know!