Category - Storage Auctions 101

Before you make a bid on a storage unit, it's a good idea to have a plan for selling the items you get. Although you can certainly make a living off of auctions, you can only do so if you have a plan for turning your items into cash. If you don't know how or where you're going to sell what you win at auction, you're bound to lose a lot of money and accrue a lot of items that will need to be stored.

Part of the appeal of auction hunting is the thrill of finding something interesting or valuable. People go “treasure hunting” in lots of places, from estate sales to pawn shops, and you can tap into that excitement to generate a profit for yourself and sell off the items you win at an auction. Rather than viewing the items you get as winnings, think of them as merchandise that can build the inventory of a new business.

From flea market veterans to thrift store owners, getting low-cost inventory from an auction is a great way to fill your shelves and attract treasure-seeking shoppers.  When you're using auctions as a way to build inventory for a bigger business plan, there are several things you should keep in mind:

• Keep an eye out for things that will sell quickly and easily. Instead of holding out for big, rare items, think of things that are always in demand like sturdy furniture, clean toys and clothes. You won't make a huge profit on these types of items, but you will be able to sell them quickly.
• Consider opening a niche store. This works especially well online. Pick one type of item that you're relatively familiar with, like holiday decorations or oak furniture, and build your business around that. Other items can be sold on the side for extra money. Focusing on a narrow niche like this helps you become an expert at spotting good deals that others might not see, and it will build you a reputation as the “go-to” person for buyers.
• Start your business on a small scale. You don't want to run out and lease a building just to fill up the shelves with things you've bought at auction. You need to build the business slowly. Start off online, then branch out to yard sales and flea markets. Try to forge connections with private collectors, antique dealers and others who might be interested in buying what you have to sell. That way, you can contact them directly when you do find something good, and you'll have an instant and easy profit.

If you want to buy storage units and sell the contents as a hobby, that's great. If you're looking for a way to make a real full-time job out of it, though, you'll need to approach it like any other job and make a business plan. By doing your planning in advance and knowing how to convert your finds into sales, you can start making real profits.

Jeff, one of our members, recently asked the following question:

When you purchase a unit, what are your responsibilities for disposing of the things that you don't want?

Before you purchase a unit, it is a good idea to speak with the facility manager or auctioneer to find out how much time you have to remove the contents from the unit. Storage facilities typically allow you 48 hours to completely remove the contents from the unit. Most storage facilities do require a clean up deposit for every unit you purchase. These fees can range from $25 to $100 and are fully refundable once the unit has been cleaned out. Some auctioneers will waive the clean out deposits once you have established a track record with them.

It is your responsibility have the contents removed within the 48 hour time period. It is a good idea to bring a broom, dustpan and some heavy duty trash bags with you, because it is also your responsibility to make sure the unit is clean and the floor is swept.

Regardless, of whether you get stuck with some merchandise you don't want, it is your responsibility to remove it from the unit and dispose of it. Most storage facilities won't allow you to use their dumpster and the ones that do will most likely charge a fee.

In this business, you have to take the good with the bad. You are going to come across units that you wish you would have never bought. For example: I purchased a 10x20 unit that was packed full of stuff. From the door, I saw a pressure washer, some antique Hina dolls, 15 filing cabinets and 2 safes. The unit also had over 40 full trash bags in it. Well, once I started looking through the unit, I realized that the previous owner was a paper hoarder. He hadn't thrown any paper away in years. Documents, notes, letters, bills, phone books, newspapers, food wrappers; it was all there. Every trash bag was full of trash. Every drawer in the desks and filing cabinets was full of trash. When I opened the safes, guess what was inside? Yes, more trash.

If you're in this business long enough, you will eventually come across one of these units. When you do, salvage what you can. Then take the rest to the dump and move on. If you can't sell some of the older merchandise, but it is reusable, consider donating it to a local charity. Not only will you get a tax deduction but you will be helping out the less fortunate in your area. Donation drop boxes are also a very convenient way to dispose of reusable merchandise. These drop boxes are open 24 hours and since they are unattended, they won't refuse any merchandise. The only drawback to using a donation drop box is that you won't get a tax deduction receipt.

If you or anyone else has a question or comment, feel free to post your reply below.

Some people just need extra space around their home, although you have to consider that a lot of people who store their property at self storage facilities are in transition. Some people run small businesses out of their storage unit, this is a lot cheaper than renting a commercial warehouse or store front. Others, just have things that they cannot or do not want to store at their homes or businesses.