Before you start bidding on a storage unit, it's important to realize that the amount you bid may not be the final amount that you pay. You need to account for extra fees, otherwise you could end up in trouble. You don't want to bid your last dollar and then be left unable to cover the cost of the auction. Here are a few fees and extra costs you should be prepared to pay:
- Some auctioneers charge their buyers a premium. Depending on the way the auctioneer handles his or her fees, this could be charged on top of the winning bid, or it could be subtracted from the winning bid. Make sure you know which it is before bidding. The auctioneer's fee is usually about 10% of the total, so it's a good idea to keep that much buffer room when bidding just to be safe.
- Unless you have a Sales & Use tax permit, you'll need to pay sales tax on anything you buy at auction. Of course, if you're in the resale business, you will probably want to obtain one of these permits anyway. If you're just starting out and aren't sure whether you'll stick with it, though, set aside enough money to cover sales tax.
- The storage facility will probably charge you a cleaning deposit. This should be refundable if you manage to clean out the unit within the 24 to 48 hours required by the facility. Check in advance to figure out how much the deposit will be and how much time you have to get the unit emptied out. This is also a good time to verify where and how to dispose of unwanted items.
- Some auctioneers have begun charging cover charges for auctions as a way to reduce the number of buyers who arrive. This is not a widespread practice by any means, but it does come up from time to time. You can call in advance or check the auctioneer's website to see if this is something you'll need to deal with.
By knowing what costs will come up during the auction, you can budget accordingly. This will help you maintain enough money to buy the units you want. It will also help you calculate the final cost of the auction so that you can keep your profit margins high enough to support your business.