The storage auction scene is getting an influx of new players recently. Who knows exactly why more people are showing up, but it probably has something to do with the economy and TV shows that might sensationalize the process a bit. Whatever the cause, newcomers are coming in and treating the situation like a lottery instead of the business it is. This phenomenon isn’t limited to new people, however, and everyone can benefit from reevaluating their particular process. Here are some business areas that everyone needs to pay attention to:
- Maximize profit margins and minimize risk
Any first-year business student can tell you the difference between profit and revenue. You don’t need an MBA to know that profit (the money left over after all expenses have been covered) is what really matters. Despite this basic knowledge we all have, it can be hard to know when our profit margins are suffering. Think about the last big score you had. Did you think of the small locker that doubled your money or the one big-ticket item that sold for thousands but only netted a profit of a hundred bucks? You probably thought of the latter, which is normal. You need to get out of this mindset if you’re going to be successful in the long term.
When it comes down to it, you should be focusing on risk and profit management instead of big-ticket items. For every locker you should evaluate everything that could go into the “profit equation” before you bid. Do you (honestly) know how much the contents are worth? Will you have to store anything? Are you going to need cross country movers because your buyers are far away? Speaking of buyers, do you have any in mind? All these factors can eat into your bottom line, and you need to be an expert at analyzing them on the spot at the auction.
- Network like a businessperson
The majority of successful business people are master networkers. They make connections with all kinds of people and can remember them at the drop of a hat. They might be doing it for sales, or making connections that will allow for expansion of their core business in the future, or any number of reasons. If you’re serious about the storage auction business you need to do the same thing and build up a huge rolodex of buyers, sellers, appraisers, consigners, fixers, and any others who can affect your bottom line. Treat every situation as a chance to make a new contact, and devote time every week to focusing on networking.
- Leave your feelings in the parking lot
You’ve probably heard the phrase “It’s just business,” usually after someone has done something to someone else that’s less than desirable. We’re not saying you need to be ice cold toward everyone, but there’s not much that “feelings” can do for you in this business. Have a gut feeling that there’s something hidden away in a locker? Ignore it unless you have overwhelming evidence. Think the guy bidding against you has a vendetta because he doesn’t like you? Who cares, let him do his best to throw you off your game. If you follow the advice above you’ll already know all the variables so you can make the best decision. In almost every situation it’s going to be better to leave emotion behind in favor of calculation.
If you follow these tips you’ll be on the road to creating a business with storage auctions instead of throwing money at rooms in hopes of hitting it big.
Author’s bio: Ryan is a guest post author who writes about business, shipping, and technology.