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Okay, I confess, I have been watching too much TV lately. It seems like there are TONS of new shows that are about storage unit auctions, buying and selling old stuff, or just about cool old stuff in general. Some of my favorites are Pawn Stars, American Pickers, Auction Hunters, and Storage Wars. The 2 that focus exclusively on buying and selling valuables from storage unit auctions is Auction Hunters and Storage Wars. This is not a business that I have tried yet, but I would LOVE to do it…and I have done some research into it.
I have a second confession to make as well. I have been interested in storage unit auctions for about 8 or 9 years now. Back when I first got married was when I really started to get into selling books and used clothing on eBay. As I was learning how to sell on eBay, I bought a infomercial product (my first and only infomercial product so far), called “Auctions for Income” by Dave Espino (I can't believe I just linked to that). I don’t remember the product being that great; certainly not worth the $37 I spent on it, but it did have some decent ideas on where to find the best things to sell on eBay. One of those ideas was storage unit auctions.
What Is A Storage Unit Auction?
First of all, what is a storage unit auction? A storage unit that does not receive payment from one of its unit renters for 90 days can typically take ownership of the items within the storage unit. The owners of the storage facility are not in the business of taking ownership of items, appraising them, and then trying to sell them. They are in the business of renting storage units.
So, they will hold an auction and will sell the items in the delinquent unit to the highest bidder. This allows them to make a little bit of money on the past due unit, but more importantly for them, it allows them to rent out the unit again and start making their monthly revenue on it.
Buyers at these storage unit auctions have turned this into a full time business! These storage units will sometimes have items that are quite valuable such as guitars, antiques, jewelry, furniture, electronics, or other items that can be sold for a profit. The gamble is that you never know what exactly will be contained in the unit or if you are paying too much for it.
How The Auction Works
Granted, I have never participated in one of these auctions. I am not claiming to be an expert here. This is just something that I have studied up on and am quite interested in. And who knows, with some coaxing from you, I just might try it! But from what I have read and seen on TV it works likes this.
Everyone interested in the auction shows up at the start time. The auctioneer opens the door to the first storage unit, and gives everyone a few minutes to look inside. No one is allowed to touch any of the items or sort through anything. Bidders can only take a look at what they can see from the door! So, you might see some valuable items that are showing, but there might be junk underneath; or there could be valuable antiques hidden.
The auction then begins and works like any other auction. The highest bidder takes ownership of the storage unit when the auction closes and can then sort through the items.
How Do You Make Money?
Now let's talk about the most important thing: how to make money buying storage units.
Set Your Expectations
The realistic chances of finding a hugely valuable item in this business is probably pretty slim (just my hunch). Most of the stuff you will find in abandoned storage units is probably the kind of stuff that normal people like you and I might keep in storage. I doubt you'll find King Tut's royal gold stuffed into a storage unit, so set your expectations from the get go.
Typical items would probably include: household items, clothes, books, furniture, TVs, computers, appliances, and other odds and ends. So, overall, this is why you would never want to bid too much, because most likely you are just going to make a small profit on your investment.
Know Where You're Going To Sell
To turn this into a business, you have to be able to sell these items quickly. From my estimation, the best places to sell these items are as follows: Amazon, eBay, Craigslist, garage sales, and flea markets. If I had to pick one or two, I would say to keep your selling restricted to Amazon or eBay.
Those are the two locations where you could get the most bang for your buck. Selling at a garage or yard sale would let you unload your new gear, but you won't get a great price for your trouble.
And you can only hold so many yard sales per year, you know?
However, if you get serious about this, you would might even consider opening up some kind of retail location. This all depends on what your business goals are and what you specialize in.
Overall, you have to go where the money is. Clothes, books, and regular household items can be sold at a garage sale or (online) flea market if you have to get rid of them. Other items can be gotten rid of quickly on Craigslist (and alternatives). And finally you can always sell everything on eBay if its small enough to ship. In fact, if you have a collectible or other valuable item, you can do quite well selling it on eBay.
But more than anything, I would stick to Amazon and eBay.
Understand The Value
This is a near business and it's fun to say that you can make a profit from it. But I know from experience that it's super easy to want your stuff to be valuable.
The truth is that if someone left it in a storage unit, there's a good chance that it isn't worth that much.
Be careful about pricing your stuff too high once you do know what you have. As with any business, pricing too high can and will drive away customers. Expect that some stuff you might break even on. Some stuff you may come away with a ton of profit.
When dealing with antiques or other valuable items, you will do better if you can get it appraised, or at least looked at by an expert in your local area. They may be willing to purchase it from you or at least tell you the best place to sell it.
Know Your Budget
I think that in general, it's pretty hard to do this at a loss. People do leave some valuable things in their storage units and the landlord just wants the unit empty. Plus (as I talk about in a minute), there often isn't much competition for buying these.
Low competition means that you can get a unit for pretty inexpensive.
But even so, be careful with your budget. Make sure that you don't get caught up in the moment and overbid yourself. As with real estate, websites, and any other business, the money is made on the buy.
How much you buy your supplies for will determine how much you make. Be sure not to allow your emotions to control you and take over.
Be Thorough
After buying, expect that you'll have to sort through all of your stuff. You'll be going through clothes, furniture, who knows what. Make sure that you're protecting with gloves, long sleeves, long pants, and maybe even some kind of mouth gear.
And don't forget to search everything. You might end up finding a forgotten ring or necklace that makes the whole load worth it. If you come away with that haul, you can get almost nothing but profit.
How Often Are These Auctions Held?
Its difficult to say how many auctions will be held in your area, but they are held throughout the country all the time. In fact, I called a couple of storage units in my area and was surprised how helpful the very first place I called was! They were actually very happy that I was inquiring about upcoming auctions (which makes sense I guess).
They let me know that they typically have an auction once a month. They said that typically only 3 or 4 people show up as well. I am now on their “list”. This storage unit calls me every time there is a unit auction coming up for the past couple of months. I still have plans to call the other units in my area to check out what’s going on with them.
According to this website, StorageAuctions.com, the state of California has over 2900 self storage unit facilities, and on average 800 units have an auction each month. This is a ratio of about 1 auction for every 3 to 4 storage units. I don’t know if this is applicable to your area, but this is probably a decent estimate for how often these auctions are held.
In my area, which is not that big of a city, we have about 30 self storage businesses. This means that there could be as many as 10 different storage unit auctions going on every month right in my area. For an area with only a population of about 200,000 people, that’s pretty good. If you are in a major metropolitan area, you really could be doing this full time.
Conclusion
Overall, I have been interested in looking into storage unit auctions for quite a while, and when I have the time I actually do plan on trying it out. Is this a business you think I should try out? Let me know below.
Also, I know this is not the typical internet marketing type idea that many of you are more interested in hearing about. However, I really just want to open the discussion up to ALL niche business ideas...I'm willing to try just about anything out! And just so you know, my next few posts will be dealing with more online or technology ideas…just to keep everyone happy!
Anyway, let me know your thoughts below!
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47 Comments
Conversation
Getting into this sort of stuff is tedious, been there, tried it, yeah you may get lucky sometimes but the idea is to work smarter and get passive income and not have to work so much. Re-introducing hoof work and holding inventory into your life represents long hours to make a buck. Are you missing your 60 weeks already?
Sorry that should be 60 hour weeks:-)
Hey Mark – I think you are missing the point. Although I agree that there are “smarter” or more “automated” businesses to get into; that does not mean that others are still not good ideas. I don’t plan on throwing out ideas just because they require a little effort. In fact, I think too many internet marketers (and others) discard potentially great ideas because it requires a little effort (I’m not saying you would). In reality, storage unit auctions and any other business CAN be automated in a way. Its called employees (or outsourcing). Once I figure out the business, I’m sure individuals could be hired and an automated system could be developed where I would do very little of the actual work – I would just be the owner and cash cow…but it first starts with hands-on effort.
Well yes if you are prepared to outsource it and give it a try and have the money to spare to do it then great. At least you will know. I would say do it as a little side hobby for a while and see if it goes anywhere. A guy down the street does this for a living, in that he aquires stuff and sells it on e-bay and Craigs list. however he seems to be doing it all hours of the day and he’s good at it so you’d have to find good people to do this and pay them well.Took some of my stuff to him to sell for me on comission. But, I would say keep building up your core business as a priority and get some first hand experience trying this out yourself first. Best of luck if you do! 🙂
Mark – That’s awesome that you know someone that does it full-time! Trust me, my core business of niche websites will ALWAYS be my main focus. I spend most of my day building and maintaining my niche websites and plan to do that for the foreseeable future. The purpose here isn’t to replace my main business, but simply to try out ideas that others want to see and document the process to truly discover if they are viable business options for others. Its a learning process and should be a lot of fun!
Yes fun, always the prospect of finding something valuable too. Now I have a pack of fortune telling cigarette cards (odds) from the early 20th century from the UK. Would you be interested? Naw I’m going to keep em a while longer. It should be an adventure for you. Not one for sunning himself on the beach then with the current level of income 🙂
My own take on this is that people, myself included, get too hooked up on the Internet dream of working “smart” on your PC without lifting a physical finger.
Did this for ages and went through the growing and spending pains until I got a system figured out where I can actually make money on the Internet without giving it away to every guru who sent me an email with a new product.
My point is that I have honestly found it neccessary to bring some hoof work into my life to stop me from going blind and having a backside shaped like a chair!
I was lucky enough to find a physical product that sells reasonably well and obviously requires some effort to fetch, wrap, post etc.
I actually look forward to my hoof work and venturing outside 😉
Ade
Spencer, I like this.
What about creating a storage/website/emporium for ALL the “storage businesses” in your area? They probably have cameras and already inventory items (legally I’m sure they have to). Photos and video of items should increase sales vs. buy this stuff (text only).
Spencer,
I think this is a good idea. You should really check out Glendon Cameron’s blog: http://urbanpackrat.com/diary/
I think he’s probably the “go to” guy for this type of thing and he has some really good stories on his blog about going to storage auctions and actually turned me on to the idea. I really like his post regarding the $8k worth of Barbies that he sold on eBay — all the while not really knowing what he had on his hands.
Hey Yolanda – Thanks for linking to Glendon’s blog! Believe it or not, I have actually watched a ton of his videos on Youtube and read his blog in the past. I will be following him and discussing him in a future post if this is a business idea that I actually attempt. He seems to know his stuff and provides a no-hype approach to the business…thanks for sharing!
My interests have been peaked again. I think it’s largely due in part to the fact that operating niche websites requires just as much work as any other venture. There is really no such thing as this online business being “hands off.”
Putting work into self storages is no more time consuming than handling your niche websites by yourself — especially if you haven’t ventured into outsourcing the menial tasks.
Anyways, I’ll be watching more closely to see how things go if you decide to go down this path.
I have to agree with Mark, I’ve done a few auctions in my time and even more flea markets and since you’ve never done them I can understand your interest is peeked but it’s a lot of work usually in the heat and a big step back from a nice passive income.
Read your reply to Mark .. and knowing you would eventually hire out makes a difference. I was basing my opinion on you doing all the work, having help would change the whole ball game. I think you should go for it. Having the perceptive that you do on automating a internet business will come in handy. Having said that now I’m interested in seeing how this adventure goes for you =}
Witchie – I agree that one person doing this full-time would have to put in a TON of hours. I guess the way I look at any business is with an eye for automation and systems. So, if I tackled this, I would certainly start by doing all the work myself; however, I would as quickly as possible develop a system (online tools maybe?) and hire other to create a more passive business in time. In fact, maybe this subject of automating ANY business is worth a whole blog post!
Spencer,
I agree with you that this could be a worthwhile business venture by learning from getting your hands dirty and then outsourcing the hard work. The idea is this would not by your only income but one of many. You do not have to hit a home run but just bring in a nice steady income. Diversification is important to insure you stay recession proof.
Exactly Rick; exactly. I’m not looking for a “full-time” income per se. Just a nice extra “part-time” niche idea that will help me diversify my overall income stream. You hit the nail on the head.
While I think this is something that could be a lot of fun, yet profitable, this is not something you can really “try out” and see if it works. To do this, you would probably need to dedicate at least a year, going to multiple auctions a month, and probably wasting lots of money until you finally develop a sense to what is valuable and not valuable just by looking in the door of a unit. The time worth learning what things are worth more money might not be worth it…still looks fun though 😉
I think that’s probably true to a certain extent. But believe it or not, I think its a faster way to make money than internet marketing for example. I took probably 3 or 4 years of struggling before I made any money online, and I don’t think that is atypical. In fact, most people are unable to make money online. However, doing storage unit auctions would have a much shorter learning curve; and you could certainly become an expert within a year for sure.
Very true…
I have a friend who owns a storage facility. He tells me that all the popularity of the shows about purchasing the auctioned contents have been great for him. Before them, the auctions often brought in less than $100 for the contents of the average storage space. Now they routinely bring several thousand.
That’s funny! I bet its very true though…lots more competition with people trying it out due to the recent spot light of television.
Thinking about the principle of those who sell the tools to do things make the most money, could you buy a group of storage units and make money renting them out? In the UK we have car boot sales, where people turn up in a field and sell from their car boots. The people that organise these are raking it in.
Well, to actually build and/or own a storage unit facility would take a HUGE amount of capital (over $1 million). However, perhaps you are suggesting sub-leasing the units themselves? I don’t think you could just buy and own a few of the units within a facility outright.
I totally agree though that often people organizing or selling tools and the ones making the real money.
Wow man I definitely applaud the idea of doing what other people aren’t willing to do- as far as real, physical work goes- but there are soooo many other less tedious and labor intensive ways to make money, even part-time money.
I sold on eBay for a very long time, sales between $15k-$35k a month and it was a lot of work. And I was lucky enough to sell new products and have some automation to it.
Whether you sell all this stuff on eBay or Craigslist or other classified sites you’re still going to have to sort all the items you purchase, take pictures, edit the pictures, create an ad for every single item, package every single item, probably fix or clean up quite a few items, and ultimately ship every item. Then do it all over again with every purchase you make. Flea Markets and Garage Sales would just be a colossal waste of time if you’re paying people to run them for you. And it’s not like you can pick a niche, like books and only sell those… you’re units are going to be full of so much random stuff…. I suppose you could try to sell all your stuff in bulk to local thrift stores or something just to save time.
If you’re willing to hire this out, why not hire a team to do something that offers more of a return on your investment and is more scalable… like building certain types of websites for you and marketing them. I’m over here in Utah and this local guy John Jonas has just this kind of system in place and a blog to read all about it. Interesting stuff.
Travis – As stated before, I agree that storage unit auctions may not be the “best” idea and certainly not the least labor intensive. But again, this purpose here is to discuss ALL kinds of business ideas to help people out and to possibly discover a great idea I can fully document for 90 days. Some people will never pass the learning curve of building blogs etc.
You also mention that perhaps I should bet into building a system to build certain types of websites that are scalable…well I already do that! If you check out my About me page you will see that my full-time or “real” income comes from niche websites (which I have developed a system for). I already do that, so I am looking for something else, that anyone without much knowledge could get up and running in 90 days or less. If needed, re-read what the purpose of this blog is here: https://www.nichepursuits.com/the-purpose-of-this-blog/
I think it’s a good idea and I’d like to hear about how it goes for you.
Hey Donny – glad you are interested in the idea. From the feedback here, this idea may not be the winner, but we will see. I will be posting several other niche ideas and will let everyone vote on their favorite idea in a month or so…then the real fun begins as I pursue the “winning” idea!
Hey Spencer;
You won’t believe that I’ve just recently been thinking about that very same niche, however I do believe that we need to have some strong networking going on there to be successful at this thing. Yes, you bid on a unit, whatever is in there, you’ve bought. And the war comes in where the same folks are there every time a facility is auctioning bins. They become familiar with the facility operator and they try to out bid or be-friend the owner so that everything seems above board and up-right.
The facilities now find extra income in auctioning off these bins, so they’re not completely financially put-out.
Yes, it is a very high energy niche. If one has the stamina and finance to bid, go for it. You can truly find some real gems there, however, it’s all a hit-or-miss strategy unless someone who works there gives you a heads-up on the content of a specific bin. Maybe THAT’s where the war comes in:)
Hey Josline…great comment! I agree that this is a “high energy” niche, and unfortunately there may be some gaming of the system going on with those in the know. Either way, glad to see that you are interested in this…thanks!
Hey Spencer,
I started going th those auctions when I first moved to Calif. in 1980 and I would sell the stuff on ebay,CL, yard sales etc. I still go but not as often today. it is possible to get some very good stuff at those auctions and of course make some money.
Just be sure to carry your cashiers checks and money orders.
And don’t forget a good flashlight or 2, because lots of times there is no light in the units or the light is very poor.
Good Luck
Richard, awesome…great advice! Sounds like if I decide to tackle this project, I have a few readers that have some great experience.
If you like digging through tons of junk, taking pictures and writing descriptions of it. Then dealing with % of unsatisfied customers, (since you yourself are not sure of the quality of those second hand items) complaining and returning stuff. Making few bucks of some, not being able to sell big part, needing storage unit yourself for the never sold stuff and making few bucks more here and there. Then it’s a great idea 🙂
I do like digging through junk! Also, when doing storage unit auctions, the real money is made on the big ticket items. So, lots of the stuff would just get donated to goodwill. When a valuable (jewelry, antiques, etc) is found, that’s when you really make the money back.
Hi Spencer,
First impressions. As more people become interested in this as a potential money maker, bid prices will rise to meet the demand, therefore making this more of a gamble, given the fact that some of these storage units are duds.
“Storage Wars” is my new favorite show. I don’t know why but I love the show. It doesn’t make me want to buy storage units, though. I know people are stupid, but you would think if the stuff in the units is so valuable, the unit renter would get a pay day loan, get their stuff out of storage and sell their own stuff for a big profit.
Hey Spencer,
Interesting site you have. I have been a flea market vendor for almost 23 years. I know about 15 dealers who hit the storage auctions.Not as easy as it once was but still doable.As far as outsourcing not so sure. Unless you are there ( which defeats the purpose ) or have someone you really trust your “money makers” may just diasppear.
I would start out bidding on smaller units first and not bid a lot especially if your not sure of the resale value of the items you see in the unit. Do some research on what commonly stored items sell for on line that you would typically find in a storage unit and then bid accordingly. Don’t bid too much is the main thing. You may also find a collectible or valuable in one the the closed boxes/containers in the unit. It’s hard to say because you arent allowed to go in the unit or touch anything. So brind a large flashlight with you and see inside the unit better, if it’s dark in the back. If you win the unit, you can keep the items you like for yourself, sell items for profit, donate to goodwill/salvation army, or go to the dump.
If your going to sell the items, you could go to Craig’s list or Ebay, use newspaper classified ads, have a yard sale/garage sale, go to a flea market or city professional auction, or sell to a private business owner who could use your find in the business as a display item. Just make sure you find out the value of the item you found first.
Things you’ll need to take to the auction: a truck/van, a helper, plenty of Cash (cash is King at these things), a flashlight, a dolly, a broom, blankets/tarp, and resale Knowledge on commonly found items. You’ll also need a place to put the items you win at auction until you sell/git rid of them.
Oh yeah, make sure you confirm the auction is still on the morning it’s scheduled because sometimes people come in and pay their late rental fees at the last minute and the auction is called off. This will save you from wasting a trip. I know I’d want to save my stuff from auction if I could, even at the last minute.
Someone asked why would people leave valuables in a unit and not pay a rent payment not even close to the value of the contents of the unit? I was told two reasons may apply many times……
1. they died
2. the items of value in the unit may be stolen and the unit owner may be in prison
Either way you are legally taking possession of the valued goods and are the legal owner. It’s all above board.
Happy Hunting!
George, excellent feedback! I appreciate the well thought out and in depth response. I still may tackle an auction here in the near future, as I still get calls from a local storage unit about their auctions each month. Thanks again.
Hey Spencer,
I was wondering…did you ever give this idea a shot?
Living in the Philippines, this really wouldn’t be something I could try…but what if you could turn it into an online auction house? I know that the storage units would like to get top dollar for the “stuff” they’re selling and, as it stands currently, they’re limited to those who are local buyers.
What if all they had to do was take a few pictures, weigh it, and then put it up on a site in an auction format? I think an online auction format for storage units would be pretty killer…think about all of the eBay sellers you might pick up as buyers. It could even spin off other small niche markets (Someone who you ship the stuff to and they clean it up, take images of each piece, and ship them out for you once sold…all for a fee)
I used to work as a self storage property manager and I prepared delinquent units and ran some auctions. Sometimes I would chew the fat with our regular buyers. One guy I knew actually did 17K of profit in 6 months, after subtracting all his fees for sub-storage, gas and the like. I actually started a site about storage auctions: storageauctionskings.com which is starting to take-off slowly but surely – so I guess you could say that is my storage niche pursuit! One thing I will say is that once these reality shows started rolling out, our attendance quadrupled overnight. Little sales that used to net only 5 buyers started filling our parking lots to capacity. 45 or more strangers would show up with cash in their pockets! It was pretty surprising to see.
Spencer, like you I’m fascinated with the shows you mentioned and was also interested in buying units. It took only a few hours of research to discover the following:
1. Every person on those shows are highly experienced at what their doing. Most of them own re-sale shops, have a network of shops they sell too or a customer base they sell too.
2. It is their experience that makes them so successful, as well as their love of history and knowledge of the products and what to look for.
3. Jarrod said on the show he lost $10,000. before learning the business.
4. Ton & Allen buy hundreds of units and have clearly stated they make money on only 20% of the units they buy.
5. My conclusion was, if I had $50,000. and a few years to learn this business, I’d do it in a minute. But since I don’t I’ll just keep on enjoying the show and do what I know. Best of luck to you.
Been to about three storage units auctions in Brooklyn NY . I had to bid on small units since I don`t have a truck to haul the big items. I got lucky! I found silverware sets, a silver pitcher, some Royal Doultons, a Havilland china dish, some art deco posters from the 1930`s, some nautical memorabilia, a few wooden ship models- four built and 7 kits, and a desk set given to employees of the French Line in the 30`s. I also found a lot of 100 T shirts-extra small, and some Nike sneakers that I placed in a cothing drop, and some costume jwelry that I gave to a few girl friends. Spent 375.00 total, made appx . a 1500.00 profit. Its fun! Besides that, you get to know people at antique shops and other specialized stores.
I have been seeing the TV shows and have kown about this since 2007. You can make alot of money but it is hard work. Dont expect to make a huge sum of money without puting some effort into this. But yes you can make 6 figures with this businesses model
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You should get into this business. My friend buys storage sheds for about $200.00 a piece. And sells the contents for about $4,000 every time he buys……………He drives a $60,000 Mercedes and has all kinds of beautiful whores riding around with him all the time. So go for it.
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