As commerce continues to from brick-and-mortar outlets to an overwhelmingly online front, reliable shipping practices are becoming more and more vital. But for any business owners who has lost a shipment in the mail or had their inventory damaged beyond repair, they are well versed in the frustrations associated when gambling with the shipping industry.
There are two options when shipping items. The first is to trust the provider and hope that you are the majority whose package not only arrives, but arrives intact. The second is to play it safe, regardless of the odds, and insure your shipment.
"Investing in shipping insurance is a must for any business. However, it's important to be aware of industry markup when purchasing insurance or declared value coverage from the shipping carriers" says Ariel Shmorak, Vice President of Operations at Shipsurance, a shipping insurance provider.
UPS and FedEx are key players in the parcel shipping industry. When purchasing coverage directly through these major companies, added costs are incurred, especially among small businesses that ship high volumes of low-cost inventory. For example, UPS charges $.85 for each $100 of a declared item, with a minimum of $2.55. A couple bucks may not break the bank, but when a business is shipping 1,000 items, the costs add up.
"Many small business owners are unaware that third party insurance exists. The cost-savings and peace of mind are essential for running a business that relies heavily on freight services," says Shmorak.
Third-party insurance is an effective option for protecting your assets and reducing costs, specifically for small business. Shipsurance, for example, operates without minimum charges, insuring shipments for about 30 to 40 cents. In the event a claim must be made, everything is done online to keep the processes streamlined and time efficient.
Shipping insurance is just one facet of a business's operating costs, but it's often overlooked.
"When reducing overhead costs, it's important to explore all options. You just have to know where those options lie," Shmorak adds.