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 products 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 flea market if you have to get rid of them. Other items can be gotten rid of quickly on Craigslist. 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.
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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.
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.
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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.
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!