Going Once, Going Twice, Sold Online

Websites take storage unit auctions to Internet community.

by Sarah Brown
- Aug 28, 2013

When considering where to source new inventory for eBay, some may decide the gamble of storage unit auctions is worthwhile. There's just something exhilarating about what treasures you can find in an abandoned unit, a feeling you can liken to yard sales on caffeine.

Reality TV has made the concept popular, but the evolution of storage auctions has yet to reach its climax.

StorageBattles.com opened its virtual doors last year, providing storage unit auctions to the online community. The idea spawned in response to a growing need among storage facilities when members of the Self Storage Association looked for a better way to clear out unpaid units.

Generally, storage facilities have a legal right to auction off unpaid units after several months, depending on state lien laws, says Leslie Watkins at StorageTreasures.com. Since storage facilities aren't in the business of conducting auctions, however, a delinquent unit may take several more months before it becomes available for auction. But the Internet could be a game changer.

Online means smaller crowds, more buyers

Hosting unit auctions online eliminates many hassles associated with live auctions, or it reduces crowds and expands the buying market

The rising popularity of bidding on delinquent units to flip the inventory for a profit is good news for storage facilities that want to make up some of the expenses they incur from abandoned units. But it also increases the burden on them to manage large crowds and sometimes work under extreme temperatures, according to StorageBattles.com.

Hosting unit auctions online eliminates many hassles associated with live auctions or, at the least, it reduces crowds and expands the buying market.

"It saves the facilities the time and effort of having people at the facility, and it saves the buyers time traveling around to many auctions, and wasting the day and their gas," notes James Grant, president of StorageBattles.com.

VirtualStorageAuction.com took it one step further. With it, storage tenants themselves can auction off their belongings. Tenants may want to do this because their items have been in storage for a long time and they no longer want to pay rent for things they aren't using. In theory, somebody could also try to host a one-price-takes-all sort of yard sale on the site.

Online storage unit auctions can work well for both the storage facility and potential buyers. For facilities, there is the potential of garnering a bigger buying audience. Additionally, facilities usually have to wait months to host an auction when they do it on their premises so they can offer several units in one day. Online, units can be posted as soon as they become available.

Buyers can inspect units with less pressure from competing bidders, too, and they can be in two places at once. For instance, let's say you're at work and want to bid on a locker, or they live a few hundred miles away and don't want to travel for a unit you may not win. Now you don't have to, and participants like that.

"The online self-storage auction process has been greatly embraced by both the self-storage facilities and the buyers," Grant reports.

Most people who use storage units are not collectors of antiques and valuables, but are moving, cleaning the garage or storing personal items

Units not always glitzy

But before you go crazy buying lockers, keep in mind that in spite of TV's influence, storage auctions often aren't as they appear to be on those popular shows, reports eBay seller electrogames in his series of guides, The Real Truth About Storage (Unit) Auctions. The seller has participated in storage unit auctions since before their rise in popularity and says bidding on lockers is a gamble.

"Truth being told, most people who use storage units are not collectors of antiques and valuables, but rather people who are moving, cleaning out the garage, and/or storing items of personal value (not retail value)," he notes.

When looking for a good unit, electrogames usually finds them in facilities that are climate-controlled. The seller believes tenants with valuable items know how to properly care for their belongings.

A few obstacles to think about

The SEO and marketing team for StorageBattles.com is working to promote the viability of online storage auctions, but there are a few more bugs in the system that may need to be worked out.

First, online storage auctions still need to gain a wide-selling base, and buyers may find themselves bidding against live crowds in states that require a physical auction as well. Also, tenants who rent forgotten units have up to the very last minute to pay their overdue balance. That means you could think you have an auction to attend one day, only to find out it's off the next.

But one of the main obstacles these online auctions face seems to center around the issue of trust and fairness.

No matter how slick the bidding systems are, the success of online storage auctions will come down to trust in the process

StorageTreasures.com recently surveyed thousands of storage auction hunters. The full report has yet to be released, but executives noted a "surprising breakdown" of responses regarding the fairness of online unit auctions.

"No matter how pretty and slick the bidding systems are, the success of online storage auction bidding will come down to the level of trust the auction buyer has in the process," notes Lance Watkins, founder of StorageTreasures.com. "Transparent documentation and trust are key factors creating online storage auctions viability."

Be aware of the fees, procedures

If you decide to try your hand at online storage unit auctions, keep a few things in mind. StorageBattles.com informs bidders they are entering a legally binding contract and a credit card must be on file. Also note that this online host receives a 10-percent premium from both the winning bidder and storage facility.

Winning bids must be paid to the unit's facility within 72 hours and bidders should know that facilities might also charge tax, storage and cleaning fees.

VirtualStorageAuction.com is a fee-free platform, but the rules are generally the same. Bidders are responsible to the facility from which they win a unit. That typically entails a cash payment for the win, plus tax, cleaning and security deposit.

As of this writing, StorageBattles.com has several units on the auction block and VirtualStorageAuction.com is hosting only a handful. In this day and age, it's surprising the concept hasn't fully bloomed yet, but—on the bright side—it makes online storage auctions a great sourcing secret for eBay sellers reading this article.

About the Author

Sarah Brown is a freelance writer who writes about e-commerce and small businesses. She recently graduated from Chico State with a journalism degree and is also a budding online entrepreneur, having launched two Web businesses and her own line of handmade products.

Opinions expressed here may not be shared by Auctiva Corp. and/or its principals.

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