Ship of Fools

18/05/2019     Alexander Clement

A recent tweet from a (fairly) renowned TV antiques expert bemoaned the fact that so few auction houses provide a packing and shipping service, leaving buyers to choose between very expensive options. In this case, Mailboxes Etc., the specialist packers and shippers, quoted £64 to collect, pack and send a leather flying jacket within the UK: they quoted £64 with standard cover or £103 with enhanced cover.

This elicited a stream of sympathetic responses from all and sundry suggesting that it would be so easy and cheap to put something in a box and send it by Royal Mail or another courier. So why did Mailboxes quote such a seemingly high amount and why don’t more auctioneers provide the service?

To answer those questions let’s look first of all at Mailboxes and other specialist shippers. The service they provide is collecting selected lots from an auctioneer, packing them and arranging carriage to the buyer’s doorstep. To do this a staff member needs to drive to the auction house, spend time with team there to find the relevant lots, then drive to their depot to carefully pack them. The journey might be up to 20-30 miles so potentially a 60 mile round trip and two hours, plus another hour to select and loosely pack the items:

  • 60 miles @ 45p/m = £27.00
  • 3 hours @ £7.70/hr (min.wage) = £23.10

Simplistic though this is, the shipping company is already down more than £50 before using any packing materials. Then they have to subcontract the actual carriage, pay rent and utility bills on their premises, plus marketing, advertising, insurance, salaries. Even if you spread the cost over a number of customers, the overheads for the shipper are significant.

So what about the auctioneers? Surely they can cut out the middle man and do the packing and shipping themselves. Well yes they could. For the TV expert's jacket it probably could have been sent for less than £25 with next day delivery and signature. But the actual cost of postage is only part of the picture. For many auctioneers, to be able to pack and ship any given lot they’re asked to, with all the associated administration, would represent a full time job for one person so, to begin with, you’ve got an extra salary to think about at a minimum of £15,000 in the UK (17,000 EUR). Then you’d have to buy in packing materials (a certain amount could be recycled but there’s only so much punishment a Walker's crisps box will take - not to mention how that would look to the recipient).

 

"anything an auction house might want to

send in the post is basically uninsured"

 

You can spread the cost of all that and build it in to your price and probably still undercut the likes of Mailboxes, Pack and Send and other providers. But you’d be relying on Royal Mail or one of their competitors to actually ship the items. What’s the problem with that? Answer: because anything an auction house might want to send in the post is basically uninsured.

Royal Mail will cover what they describe as 'valuables' (in a way that gives them plenty of wriggle room) but only via their Special Delivery service and you have to make sure you've selected the right level of cover. They don't appear to insure valuables for international deliveries if their General Terms are anything to go by, or at least the maximum cover for anything going overseas is £300 at the time of writing this article, and only then on one specific service. I have been in the unfortunate position of claiming for damage in transit from Royal Mail for a Chinese porcelain dish and it took three months to get back just the cost of postage, nothing at all for the contents. No buyer is going to wait three months or more to get their money back if their purchases go missing or get damaged. And an awful lot of Royal Mail parcels go missing; the company received around 250,000 complaints in 2018 about packages getting lost.

What about the competition? iPost parcels is more forthright about what they don't insure. Here's a quote from their website listing items they don't provide compensation for:

Valuable Goods - Any goods of high value such as bullion, cashiers or travellers cheques, currency, money orders, negotiable instruments in bearer form, credit or debit cards, important documents (including passports, tenders, share and option certificates) stamps, antiques, unprotected furniture, precious stones or metals, artwork, jewellery or valuable items of wear (including occasional wear) designer items (including clothing, watches, shoes and handbags). Precious stones or metals.”

Hermes, and Yodel have similar policies. What this adds up to is that if an auctioneer wants to offer a shipping service, they have to underwrite loss and damage themselves. So they'd either have to charge the buyer a percentage of the value of the items being sent or a fixed insurance fee and then deal swiftly in providing compensation when objects are lost or damaged in transit. This significantly ratchets up the cost to a level where they really couldn't do it for less than a specialist shipper.

 

"Auctioneers sell art and antiques,

they aren't specialist shippers and carriers"

 

The whole issue is an unholy nightmare and one that most auctioneers opt to steer clear of, preferring to recommend carriers who do a better job because it is what they do all day, every day. Auctioneers sell art and antiques, they aren't specialist shippers and carriers. Most don't have the infrastructure in place to provide the service and when they look at the potential costs and pitfalls of doing it, would only end up charging the same as Mailboxes in order to just cover their costs and potential losses.

ATG's the-saleroom.com did, for a while, offer a shipping service which was a neat idea but it didn't last very long. What they had to charge to make it viable was no less than a specialist shipper and the complicated nature of sending art and antiques anywhere clearly proved too much of a burden and a distraction from their core business. Small wonder it disappeared from their range of services.

Anyone who decries auctioneers offering online bidding but no shipping service probably hasn’t actually run an auction house or a shipping service. The margins of these businesses are tiny - yes, even though auctioneers charge commission to both buyer and seller. If you buy anything at auction, before you bid, have a think about what it is, where it is and how you're going to get it to you. Consider a day trip to pick it up yourself, it's far safer and probably cheaper in the long run.

 

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