Secrets To Buy Storage Locker Bins Like The Pros
Storage unit auctions were a well-kept secret within the resale community for many years before A&E aired the reality television show Storage Wars. Millions of viewers tune in each week to watch entrepreneurs try to outbid each other on bins full from wall to ceiling of miscellaneous items. Often, the bidders will win with a bid less than $300, only to find an antique in the unit that’s worth double what they paid for the entire bin.
The reality is anyone can profit from these storage auctions. All it takes is some start up cash to bid on the units, a vehicle with a trailer to haul the stuff away from the facility, a mode to resell the items and the ability to find the auctions when they turn up. Fortunately, there are solutions that make the endless hassle of locating the auctions more viable.
This guide will walk you through the steps of preparing yourself for storage unit auctions. It will go over a number of topics and common questions for prospective bin buyers.
About Storage Auctions
Self-storage auctions occur when an individual stops paying rent on their unit. After a certain amount of times goes by without payment, the contents of the defaulted bin become the property of the storage facility. The auction is an unfortunate result in the eyes of most storage facility owners, but it becomes essential to recover their losses. They attempt to contact the default leaser to no avail, and have no choice but to sell his/her stuff to vacate the bin for future use. Storage unit auctions are increasingly more common with the current state of the economy. Most storage facilities prefer to sell all the contents of the bin at once, because they are trying to recover the value of the backed rent, get the bin cleared, and ready to lease.
Bin auctions are the bread and butter for professional storage bin buyers. The bids normally don’t exceed a few hundred dollars and the contents of the bin could potentially be worth way more. Some storage facilities prefer to break up the bin’s contents piece by piece, and sell them individually. The vast majority of storage auctions are bin auctions, for the convenience of the facility’s owner and in attempt to quickly clear the unit for re-leasing. In most cases, better deals can be found at bin auctions, but you shouldn’t completely rule out piece auctions. Fewer people may show up for piece auctions with the mentality that they won’t make enough profit from won items, which would increase your chances of winning an item on a low bid.
Every state has different laws pertaining to storage auctions. Some states allow the bidders to physically enter the unit to get a better look at their prospective buys. Other states won’t even allow the auctioneer or facility owner to open the bin until bidding starts. Knowing the storage laws for the states you will be working is crucial for success in the auction-hunting world. Some websites list the different state laws pertaining to storage unit auctions. Every state also has different laws pertaining to advertising storage auctions. Many require that the seller or facility manager notify the public two weeks before the auction.
What to expect at a storage auction
Storage unit auctions are largely the same as other types of auctions. Bidding normally begins at a firm time, but it is always smart to arrive early. Expect a larger number of people bidding than in the past. The popularity of A&E’s Storage Wars and SpikeTV’s Auction Hunters has caused more people to embrace this unique career opportunity. It is important to be methodical and develop an efficient system to beat out the rest. Developing a system for bidding is crucial to your success as a bin buyer.
Depending on state law, the owner of the facility or the auctioneer may allow you to view the inside of the bin before the bidding starts. Normally, this allows you to see the bigger items stored in the bin, but not the stuff packed in boxes. There are two main formats when it comes to storage unit auctions. Some facilities prefer to use the traditional method of auctioning, when bidders shout their highest bid until someone goes higher than anyone is willing to part with. Another common auction format is the silent auction, where bidders seal their written offers for the bin and the winner is announced once all the bins have been processed. With experience, you will develop strategies for either scenario. If you win, you are usually given a set amount of time to remove the contents from the bin. If you fail to remove it in time, the owner of the facility reserves the right to remove it themselves. Always read the terms of service and any other disclaimers before an auction starts.
Most storage facilities will accept cash from the winning bidder. One major mistake some people make is not bringing enough cash to win an auction. Typically, specifically with the bigger storage companies, several bins will be for sale in a given day. Spending all your cash on the first few auctions could force you to miss something very valuable in the last auction.
When it comes to resale goods, people are always looking for a great deal. If you can win good auctions for
an appropriate amount of money, you can definitely turn a profit.
Deciding whether or not to bid
Depending on local and state laws, bidders may or may not be able to see all or any of the unit before the auction. This leaves a lot of guesswork for the bidder on whether or not to bid. A majority of the states allow bidders to inspect the bin from the front door before the auction starts. In this case, you should look for anything on the higher-end. For example, if you don’t normally deal in furniture, but see an antique or high quality chest of drawers, it increases the likelihood that other items of value will be in the bin. If you see nothing but boxes of paper (a common occurrence), then you may want to rethink bidding at all because it’s likely that the bin is full of worthless records of some kind.
Boxes are normally the biggest mystery during a storage auction. Within boxes could be literally anything that fits in that particular box. The box could contain jewelry, antique housewares, old antique advertisements… the possibilities are endless. Most bin buyers rely on the quality of the bigger, unboxed stuff, to determine how high they are willing to bid during the auction.
Remember to bid at your own risk. There is always a chance that you will end up losing money on a storage bin. Be methodical abut calculating risk and always make sure you can profit off the transaction. The resale industry is known for having relatively high profit margins, but one mistake can end up costing you hundreds of dollars. Before bidding, consider overhead costs such as time, transit of goods and the price you paid for the unit.
Ask yourself these important questions:
1.) How and where can I sell these items?
2.) How much can I sell this stuff for?
3.) Is the profit worth all the hassle involved in winning the auction?
Where to sell my stuff?
So you won a storage bin and now have enough stuff to fill a 10x10 storage bin. Where do you go from there? Free advertising is the best advertising. Try to sell what you can on sites like Craigslist, or post in local newspaper ads. If you have items to big and valuable to be shipped from a location and require an onsite pick-up, Craigslist will probably to be your best bet.
Ebay has become the go-to auction place to sell literally anything, for any price. As long as the buyer is willing to pay shipping and you can afford Ebay’s listing prices, Ebay will be your best friend. Keep in mind, however, that Ebay is fairly competitive. Your ads need to look clean and professional, or people won’t trust you enough to buy from you. There are a number of books and services that teach you all the ins and outs of using Ebay. If you have never used Ebay before, I highly recommend one of those resources.
A strategy many in the resale industry adopt is specialization. Some resellers specialize in industrial equipment, while others are interested in art. Typical categories include antiques, clothing, appliances and home electronic equipment. Bins will usually contain a hodgepodge of miscellaneous items, and rarely cater to a specialized field. It may be wise to build a network of people specializing in other areas of resale, so you can rely on them to buy your goods, even if they can only buy them at a cheaper price. By building such a network, these same resellers may come to you with great deals on items they don’t have the knowledge to sell. Our primary focus was in recording and audio equipment, but everyone has different interests. Choose a specialization that you know about. It’s the best way to ensure profit.
Research
Research is a critical step in planning your storage unit bidding. Many people go to storage unit auctions and leave disappointed. Sometimes, the bins up for auction contain nothing of value, and the prospective bidder has wasted their time driving to an auction with no sellable items. An even worse scenario is when a bidder goes to an undesirable auction and pays way more than the resale value of the bin’s contents. You can avoid these unfortunate mishaps by simply doing basic internet research.
An important factor in deciding whether or not an auction is worth your time and money depends on the storage unit’s location. Research the median household income of any region that a prospective storage auction takes place. Focusing on territories with higher median household incomes will always yield better results, because the residents of that territory have more freedom to buy higher valued things.
www.citydata.com is an excellent tool for those that bid on storage bins. You must always remember that the items found at storage unit auctions were bought and forsaken by someone else, so collecting data on the storage facility’s area is always a good idea. By simply typing in the city and state of a particular storage auction, you can obtain valuable information on the people that use the storage facility. It doesn’t take long to collect the necessary information to make an informed decision. Avoid areas with lower than average annual income, and you will be less likely to waste time and money going to auctions that will not yield a profit.
You can also get “heat maps” of certain areas, with different colors signifying income level. These tools can help you visualize where the real money and best auctions are located, and can help you plan a trip if you want to buy bins from multiple auctions. www.hotpads.com is a website that allows you to search for apartments given certain searchable criteria. We have found through experience that their heat map is very comprehensive and especially useful if we are planning on going to multiple auctions in a short period of time.
To use their income level heat map, simply click on the map in the center of their home page. Type the city, county or state you are researching in the search field. Move your mouse over the “heat map” option in the upper left hand corner of the map, and a list will drop. Select “household income” or “per capita income;” either of these options will give you an idea of the wealth of a particular area. The map will take a second to load, but once it loads, the different zones should be color coordinated, ranging from blue to red. Red indicates a high income territory, while blue indicates a low income territory. See the color map legend in the bottom left hand corner of your screen. You can also add city, state or county labels by moving your mouse over the “Area Labels” section and selecting the desired area label.
Locating auctions
Locating auctions in an area can be a huge hassle. First, you need to create a list of all the self-storage facilities in a given area, including addresses and working phone numbers. After that, you have to sit there and manually call each facility in a given area and ask the manager for the time and date of the auction. Keeping track of all the auctions in an area can get overwhelming, because there are so many facilities and auctions to keep track of.
www.StorageAuctionRiches is a great resource for professional and amateur resellers alike. We provide a list of storage unit auctions going on in any given state, nationwide. We provide the self-storage facility’s name, phone number and street address. We also provide the date and time the auction is taking place.
