You know this is different - because we can not replace Amazon (we can reduce our exposure for sure, but few of us would have little or no effect on our bottom line by bolting).
As to not insuring - well, the old adage is “you only need insurance when you have a loss” or some such thing.
A sad story to PROVE MY POINT.
In Jan of 2013, I moved my business. Called my agent of 15 years to bind the new one I was moving into and the old warehouse for all of January move out.
In April I receive a bill for insurance. BOTH locations were still insured. I went ballistic, that I was still insuring the old 20,000 sq foot space, and was told it was my fault, as I had no docs to prove. I got no-where, and simply did not pay, and in June my insurance was cancelled.
I failed to get new insurance that month.
July 13, 2013 - The business burn to the ground - Lost a million $$, lost my business of 30 years, my career, my income, my employees all lost their jobs, and lost the family dog who came in that fateful Saturday.
We in business (and in life) have choices to make.
I having insurance for 29 years HAD INSURANCE in all but ONE.
I FAILED to take the risks seriously.
and I paid the price
I have a friend who was a habitual trash picker. He had a regular route. It included a CD/Record/VHS/DVD distributor.
From time to time he would find an unmarked carton with some of the latest bestsellers. Probably packed by a warehouse employee and thrown in the dumpster to be retrieved later.
Would have been very hard to remove that much inventory from a retailer.
That’s actually exactly the same trick retail employees do. They fill up a trash bag in the stock room and act like they’re taking out trash to pick up later.
Well the flip side of this is you have to remember insurance companies exist to make a profit off of you.
Personally I choose to gamble and have no insurance on anything except where required. I have liability insurance required by my HOA, I do not insure the contents or structure of my apartment (though I did buy a fire extinguisher). I have the minimum auto insurance as required by my state. And I carry the minimum amounts of business liability insurance as required by various entities.
If you have little to lose, and I suppose young, then it might make sense.
But, a house or any large asset, then a risk of mighty proportions.
A car accident, a product that starts a fire, etc, (if not a corp or S-corp) and those assets are fair game. Further you will not have the Insurance company lawyers fighting on your behalf.
Lastly, what does your wife (or partner) say about this?
I have personally found that my risk is not at the same level as her risk…
I actually have a lot to lose, but the more you have, the more it costs to insure it all.
Any car accident serious enough to cause significant liability will likely leave me dead anyway. I do have my businesses as corporations to avoid any serious product liability claims. I’m not married and wouldn’t marry someone who thinks I should buy insurance.
Like I said, I prefer to gamble than to pay insurance companies. Personal preference, nothing more. Everybody has to do what fits their risk tolerance, whether that’s dealing with a cheap warehouse or cheaping out on insurance.
Hated paying house insurance for over 40 years. Was just about to take the gamble when our house was struck by one of those West Texas hail storms with a tornado.
New metal roof
All new windows
All new metal siding
Thank god the basic structure held and none of us were injured. It was a wild night … struck at midnight … all the town was black … no electricity …
In one storm, we got back our entire 40 year insurance investment and then some.
We don’t complain any more about the house insurance.
Currently my point of contact is the warehouse manager who has been helpful all this time. I’ll try to ask her for credits as you mentioned. However calling management won’t work because I’m one of their smallest clients.
It’s been 30 days and still hasn’t arrived. I’m still keeping my eyes on it.
Thanks for another way to look at it. Is “<1% lost” a standard acceptable practice in the warehouse industry? I’ll bring that up next time when I ask for the reimbursement.
My product in that lost carton was very niche and 80% of customers who buy this product are women. I’m pretty sure that the warehouse workers (who are mostly men and have no idea what this product is) didn’t steal it
The other 5 boxes that went missing and can’t be found could’ve been stolen though. You also have to keep in mind thieves will steal anything and a lot of times they steal what’s easy. Maybe those 5 boxes were close to the dumpster or something. It’s kind of like porch pirates, they generally don’t know what’s the in the package but they’ll steal a bunch of stuff and resell what they can.
Good point. Yep those porch pirates don’t know what’s inside the box but they steal first. Sadly the product in those 5 boxes are easy to sell and commonly used.
Homeowners insurance is actually a bargain in a lot of areas right now that haven’t had rates substantially increased yet. Climate change has made the odds of mother nature taking a wrecking ball to your house go way up. There’s a lot of areas insurers have pulled out of as a result (or increased rates by a lot).
Your inventory was in the care, custody, and control of the warehouse. They are technically liable for any loss but how you handle it is dependent on your business relationship with them. If you need them and they won’t reimburse, you have to eat it. Doesn’t matter if they are insured or not, the risk is theirs. If they chose not not insure the risk, then they are basically “self insured” and the loss is still their responsibility.
The shipping status just showed “Delivered” in Amazon system today It took a long time since it was shipped out on July 22. The weird thing is that the destination of this carton is in the same town as the warehouse that UPS picked up from. It would have taken less than 30 min to drive from the warehouse (origin) to Amazon warehouse (destination), yet it took over a month to be delivered. How bazaar… but good news regardless.
Thank you everyone for chiming in with plenty of great suggestions.
It took a long time since it was shipped out on July 22. The weird thing is that the destination of this carton is in the same town as the warehouse that UPS picked up from. It would have taken less than 30 min to drive from the warehouse (origin) to Amazon warehouse (destination), yet it took over a month to be delivered. How bazaar… but good news regardless.