The Evolution of the Storage Auction
I first started working a self storage facility manager back in the era before popular reality shows like Storage Wars and Auction Hunters were whipping the public into a storage auction frenzy. Back in those days, although you did have regular auction buyers who had always been “in the know”, self storage auctions were little more than a financial necessity – a relatively unpleasant part of the job that saw companies and their managers being forced to sell off a delinquent tenant’s storage unit in order to prevent further financial damages due to non-payment of rent.
The Early Days of Storage Auctions
What many people do not realize is that a self storage company relies heavily upon their monthly revenue in order to help pay for essentials like payroll, maintenance, costly repairs, software licenses, office supplies, insurance and utilities; expenses which add up very quickly. When a tenant fails to make their monthly storage rental payment for an extended period of time, they’re not simply falling behind on their account, they are causing an increased strain on company resources.
Although many managers and self storage company owners are reluctant to follow through and carry the lien process to completion, oftentimes they have no choice but to send a severely late unit to auction in the hopes of recovering a portion of the money they’ve lost. Suffice it to say that, in being a self storage company manager before the era of the auction reality shows, I always saw self storage auctions in this light. They were unfortunate but necessary financial tools.
Storage Auctions Burst into Public Consciousness
Flash forward to a year later, when our office phones are ringing off the hook, which is normally a very good sign for business. However, these folks weren’t calling about renting storage spaces or shopping around for prices. Nor were they our current tenants asking for help with their accounts or units. As a matter of fact, this deluge of phone calls was coming from people who had never even seen our property before and had absolutely no interest in renting a self storage unit. They were all auction buyers!
I can remember one week in particular where we would receive three or more calls per day from excited auction hunters that wanted to know when our next sale would be held, what kinds of fees were involved and a general description of the entire process. Many wanted to know what was inside the auction units! At first we were puzzled by this phenomenon. Why did the entire world wake up one day and decide to ask us all about storage auctions? Finally, we put two and two together. When either of the most popular storage auction shows would air, people would get excited and start calling up local self storage facilities like ours.
Storage Auctions – Then and Now
I can remember two auctions in particular that we held. The first was just before the era of the reality shows. During this first auction, back when the self storage industry was only really known to its customers, managers and owners, we had seven large auctioned off secure storage units that were packed to the gills with valuables, home appliances and recreational equipment of all kinds. We announced the sale in the paper in advance as well as via several online outlets. We only had 6 people show up and only a few of those even had large enough vehicles with them to haul everything away.
The next time we held an auction was well after the storage auction craze had begun. We had only 3 mini storage units and most of them were nearly empty. One of them had been a case of our tenant forgetting to completely vacate their unit before disappearing abroad. The others held a few pieces of luggage and what looked like personal document boxes. In short, it did not look like a very appealing auction. This time around, we simply put a small listing in the paper two days before the sale took place.
The Storage Auction Craze Begins
On the day of the sale, our parking lot was filled to capacity with people standing. The cars couldn’t even fit in the lot – people had to park out on the shoulder of the main road. There were so many people that we had to rush back into the office before the start of the sale to start printing out more bidder registration materials. This amount of public interest was totally unexpected. Although most of the folks went home disappointed and grumbling over the disparity between the repossessed storage units we had for sale and the mega-lucrative units they were seeing bought on TV, one lucky buyer found that the paper storage boxes in fact contained a brand new computer set which he ended up getting at a tremendous discount.
This was my first encounter with the storage auction craze. Following that sale, one of the buyers in attendance stopped into the office to talk shop and told me about his experiences buying up repossessed storage lockers over the last decade. He had always been one of those “in the know” folks that was doing it well before the television boom. He laid out some of his storage auction buying tips and tricks, and explained that, after employing self-discipline and tenacity, he had been able to make over 17K in actual profit over the course of one year. He would buy up any storage unit that seemed to have potential, then he would carefully sell everything he found inside on eBay.
The Future of Storage Auctions
Today, there’s no denying that popular reality shows like Storage Wars and Auction Hunters have altered the landscape of the self storage industry across the board. Some owners and self storage management embraced the trend, citing increased foot traffic to their properties; essentially free exposure. Still others lament the more peaceful old days, when they didn’t have to worry so much about inexperienced buyers skipping out on their unit-cleaning duties or smashing into fences, gates, keypad consoles and other cars in parking lots crowded with auction hunters! Regardless of your position on storage auctions as a whole, it will be interesting to see what the next chapter brings, and whether we will see a persistent increased interest in this subsection of the storage world, or if we will be able to chalk it up to a momentary frenzy.