HAVE A PLAN BEFORE YOU BUY
Before you run out and bid on bunch of stuff, make sure you have a plan. Not just a plan of how you’re going to sell all of your new treasures. But also a plan for what you’re going to do with all of the extra junk that goes along with it. And, believe me, there will be junk. Face the fact now that the majority of what you get will be junk and need to be thrown away. Have a plan to try and unload everything for free if possible, so you don’t have to pay a landfill or someone to come and dispose of it for you.
Your plan should also include equipment to haul your spoils away like a truck, van or trailer. The difference in good hauling equipment could be the difference in being able to bid on some really valuable lots.
Once I bid on a 20’ x 20’ unit that was jamb-packed full of display cases that no one else would bid on because they were so big and awkward. I won it for a $25 bid much to my partner’s misery because he knew it was going to be a long night of hauling.
As we started to load it up, we realized that it was an entire kiosk from a mall jewelry store that had gone out of business. Behind the cases, we found all of their jewelry making tools and equipment. Another big score for us!
As we went through the drawers, we also discovered all of the scrap gold and even a little platinum. One small piece paid for the entire unit. I was sure glad I had our trailer on that trip.
In addition to good hauling equipment, you’ll need labor (or friends) to help you move all of the items as well as dollies and tie-downs to secure it. Make sure you have a really big space like a garage, basement or storage shed to store and sort through your items.
Finally, you’ll need a good place to hold garage or yard sales. This gives you a venue to unload the extra odds and ends that can’t be sold in lots or on eBay. And, plan for trips to the dump after you win a bid to get rid of the excess junk that has no value.
CHAPTER TWO: HOW MUCH CAN I MAKE?
Isn’t this chapter the real reason you’re reading this book? Hopefully, you didn’t skip straight to this page. The first thing you have to remember is that storage auction success is a long-term process. It’s not an overnight success story. If you’re willing to think long-term, work hard and stay organized, it can become a full-time business for you. The longer you stick with it and work hard, the more experience you’ll gain. More experience means more profit.
One day, we bought a small room that was all neatly packed boxes and a couple small pieces of furniture. What we could see looked very nice and well taken of and our experience told us it was work the risk. So we bought the small unit for $500.
The very first box we opened was full of DVDs. The next box was packed with CDs. As we dug further into it, we found thousands of CDs, DVDs, movie memorabilia, action figures, and posters from an avid collector. They were all in mint condition. One of the boxes had a complete collection of Hardy Boys books. We sold it to someone else at the auction for $500 and everything else was pure profit! Our experience had paid off.
OTHER FACTORS THAT INFLUENCE PROFITABILITY
Besides experience and hard work, there are a few other things that will influence your profitability in the storage auction business. First of all, you have to be willing to become a jack-of-all-trades. One week you’re a book dealer, one week a furniture dealer. Or you may have to research children’s toys or restaurant equipment. It’s important to stay open to all opportunities. You never know what niche will pay off and you learn more with every sale.
The second thing that helps your profits is if you repair and clean any items before trying to sell them. A little wood glue and stain goes a long way. It pays to invest in some cleaning products. Old English polish works on just about every kind of wood furniture. Jewelry cleaner and silver polish can make a huge difference on metal items. It all adds up to a for a higher sale price for you.
Be sure you look through everything – every drawer, every box. One time after a long, hot day, we headed back to the warehouse to start sorting our load. It seemed to be nothing but a load of garbage. I was so tired and frustrated thinking that I had a total loss of a day. I was going through some old box that looked like the contents of a kitchen junk drawer and couldn’t take it anymore so I kicked the box across the floor. My partner picked it up and found a handful of 14K gold jewelry in the bottom among the junk. It paid for the entire unit and then some.
Most of the stories I relate in here are the good ones because those are the ones that stick with you.
Remember it takes a lot of junk to get your own good stories. Stick with it. It’s a numbers game. You may buy 50 bad units before you hit the one that pays for them all!
Sometimes the tenant has more than one unit in the auction. The auctioneer will usually announce it if they do. If you buy one, you may want to buy the others or at least “deal with” the other buyer because there may be missing parts of something that are in the other unit. For example, a chair may be in one unit, and the matching couch or pillows in the other.
PROS & CONS
Like any job, there are definitely pros and cons in the storage auction business. It’s a lot of hard, dirty work digging through other people’s junk. On the other hand, it really is fun. Almost like a treasure hunt at times.
One day, the door was opened and as we looked I noticed a beer bottle bank showing and about six very neatly stacked boxes all the same size. I bought the unit for $200 and everyone thought I was crazy. The change total from the bank was more than the unit cost. The boxes were full of all new goods: tabletop display cases full of jewelry, brand new in the package Harley Davidson kids’ clothes, watches and more.
BID RIGGING IS A CRIME
While you can make some good money at storage auctions, make sure you do it legally. Bid rigging is a crime and auctioneers will ban you from future auctions. Don’t do it.
Bid rigging usually involves an arrangement among several bidders to eliminate the competition by making the bid go their way. The most common types of bid rigging include the following.
1. Bid rotation is when bidders conspire to take turns being the winning bidder.
2. Bid suppression is when some bidders covertly agree not to bid so that one of them can successfully win the unit.
3. Subcontract bid rigging is when bidders conspire together to not submit bids or to submit bids that they know will not be successful in exchange for the winner bidder subcontracting to them. They are sharing the winnings among themselves without bidding against each other.
See part 4