What's your attitude to insurance survey

Interesting question.

If we are discussing insurance on shipping then we should also include deciding if to use a signed for delivery service. My thoughts are as follows:

For ourselves, if we paid for insurance, it would cost about 5% of items sold and greatly increase our shipping costs. When shipping by Royal Mail or Airmail we never use a signed service as it would add £1 to UK and over £5 to every Airmail order. The days of “lost in the post” are well behind us.

For insurance, lets say we sell £10,000 p/year (actual figure is much higher but lets use £10,000 annual sales as an example) and at 5% that would be an insurance cost of £500.

Given that out of many thousands of shipped items each year our annual loss or damage totals only a few items with a combined value of maybe £200 p/year. Even on 10k sales it does not make sense for us to pay for insurance. Multiply this by a factor, when annual losses remain at just a couple of hundred pounds p/year and it certainly does not make sense.

As regards a signed service and “trusting your buyer” not to say I never received it, we send many orders by regular post or Airmail and non-received is at most just one or two a year. To pay extra for a signed for service is just not worth it and again we save a fortune and also keep shipping costs down this way.

I take the view that the amount we save by “insuring” every shipment ourselves, and not using a signed service more than makes up for the very rare loss or theft.

Then there is the issue of adding the insurance or signed for cost to every order and therefore greatly increasing what the buyer pays – on some items this could make us uncompetitive and I am certain that many buyers would rather not pay the extra.

After many years, and with the exception of a certain CityLink issue this past year, we have saved many thousands of pounds annually by “insuring everything ourselves” – IE: We pick up the tab if there is a problem.

I appreciate this may not work for low volume sellers and it also depends on what you sell and the value. We sell electronics, DVD’s, etc which can all be high risk. We tend to ship higher value items by courier, but not always – we do look at the buyer and what is being ordered, and we take a view, but typically the deciding factor is choosing the cheapest shipping method. With this approach we save a fortune and keep costs down for our customers. Problems are rare and it works for us but when there is a rare problem the HUGE amount we have saved leaves more than enough in the kitty to cover the cost of an occasional replacement. Overall, we are quids in big time!

Long live The Revolution!! 🙂

3 Responses

Steve says:

21 January 2015 at 6:21 pm

Interesting question.

If we are discussing insurance on shipping then we should also include deciding if to use a signed for delivery service. My thoughts are as follows:

For ourselves, if we paid for insurance, it would cost about 5% of items sold and greatly increase our shipping costs. When shipping by Royal Mail or Airmail we never use a signed service as it would add £1 to UK and over £5 to every Airmail order. The days of “lost in the post” are well behind us.

For insurance, lets say we sell £10,000 p/year (actual figure is much higher but lets use £10,000 annual sales as an example) and at 5% that would be an insurance cost of £500.

Given that out of many thousands of shipped items each year our annual loss or damage totals only a few items with a combined value of maybe £200 p/year. Even on 10k sales it does not make sense for us to pay for insurance. Multiply this by a factor, when annual losses remain at just a couple of hundred pounds p/year and it certainly does not make sense.

As regards a signed service and “trusting your buyer” not to say I never received it, we send many orders by regular post or Airmail and non-received is at most just one or two a year. To pay extra for a signed for service is just not worth it and again we save a fortune and also keep shipping costs down this way.

I take the view that the amount we save by “insuring” every shipment ourselves, and not using a signed service more than makes up for the very rare loss or theft.

Then there is the issue of adding the insurance or signed for cost to every order and therefore greatly increasing what the buyer pays – on some items this could make us uncompetitive and I am certain that many buyers would rather not pay the extra.

After many years, and with the exception of a certain CityLink issue this past year, we have saved many thousands of pounds annually by “insuring everything ourselves” – IE: We pick up the tab if there is a problem.

I appreciate this may not work for low volume sellers and it also depends on what you sell and the value. We sell electronics, DVD’s, etc which can all be high risk. We tend to ship higher value items by courier, but not always – we do look at the buyer and what is being ordered, and we take a view, but typically the deciding factor is choosing the cheapest shipping method. With this approach we save a fortune and keep costs down for our customers. Problems are rare and it works for us but when there is a rare problem the HUGE amount we have saved leaves more than enough in the kitty to cover the cost of an occasional replacement. Overall, we are quids in big time!

Long live The Revolution!! 🙂
David Brackin says:

21 January 2015 at 11:25 pm

Broken link on the survey, Chris – I get a 404. May have left a tag open?