Friday, March 26, 2010

Make Money at Storage Facility Auctions

Buying and selling is a time honored way of making a living. However, like any profession, success in merchandising requires following some fundamental rules. The most basic of these is to obtain items of good quality that people will actually want to purchase, and to acquire them at a low enough cost to ensure adequate profit. Once this challenge is met, the entrepreneur’s success is largely assured.

I am not talking about raiding dumpsters, joining wholesale clubs, or fencing stolen merchandise. I am discussing public storage buildings, which you can find in virtually any community coast to coast. Millions of individuals and businesses use these facilities to store all sorts of goods. Many of them eventually fall behind on their monthly rental bills. After an extended period of non-payment the storage building owner can legally claim the items. He or she will often hold periodic public auctions to sell off the goods in order to recoup a portion of their lost rent.

The result of all this financial fickleness is that large quantities of perfectly good things end up in rented storage buildings. Then death, financial hardship, or just plain apathy or forgetfulness kick in, and the items are forgotten. This is where the real opportunities for you come in. The units range in size from twenty five square feet up to several hundred. Some are even climate controlled, and may contain freezers full of fresh meat or other perishable goods. Chances are, there is such a place near you right now, packed with all sorts of treasures waiting for you to claim them.

The first step in taking advantage of this opportunity is learning when the auctions in your area take place. Get a copy of the local Yellow Pages directory and look under “storage facilities.” Contact the offices. Make sure you do not call storage building dealers, the people who actually sell the little sheds you see in back yards nationwide. You want the businesses that rent their own units on their own property.

Ask for the owner or manager, and tell them you want to know when the next auction is going to be. Some places hold them on a regular basis, and can give you the exact date and time. Others hold them “as need arises,” but do not currently have one planned. Put these on a call back list, and check with them once a month or so. Still others put a notice in the newspaper when the time for the auction

Bidding at auctions is an art form unto itself. You may wish to just watch others at the first two or three you attend, just to get a feel for how much items go for. Keep in mind that your primary goal is resale. Don’t bid $300 on a building full of goods that you can only make 50 bucks on.

The auctioneer will open the buildings one at a time to let the bidders see what they contain. If most or all of the goods are in boxes, then he or she will break these open and display their contents to the crowd. Bring a pad and pen and try to estimate the approximate resale value of the merchandise. Then place your highest bid at no more than 50 percent of that amount. If in doubt about the profitability of the contents, then don’t bid; there is always another day, and you don’t want to get stuck with tons of unwanted junk filling up your storage area.

You want to look the stuff over as thoroughly as possible to make sure that rain has not leaked in and destroyed things. If you smell mildew or see evidence of water damage, then pass that building up. Mice and other rodents sometimes get in, but they rarely do much damage, except to clothing and stored food. (Speaking of clothing, check the pockets and linings of any you get. Old people hide money in them. Wads of cash have been found stuffed in shoes and mattresses). Storage buildings with shingle roofs and heavy, tight-fitting doors do the best job of preserving stored items.

Yard or garage sales are another way to rake in the dough. If you have a home with a good sized yard or a carport or garage, this option can work for you. Make sure you have plenty of change for your customers, as well as bags for their purchases. Advertise the upcoming sale in your local paper, put up signs in the neighborhood stating the day and address of the sale, and be outside early, ready to do business—yard sale fans are early risers. The old pros at this business set their merchandise out the night before, and cover it with tarps, so they do not have to set up the morning of the sale.

You can make a hefty profit by selling at these auctions, but you need to know what you are doing. Find out when and where they are held by checking your Yellow Pages, local papers, or just asking around. Go several times before you decide to sell. Watch the bidders and the auctioneer. Talk to the manager and find out what the terms are; usually the house will get a portion of whatever money you make. Retail auctions can be great fun as well as lucrative.

In many parts of the country it is legal to set up an impromptu store front along the roadside, in front of abandoned stores or in the hinterlands of large parking lots. Cops will not hassle you as long as no one complains. In the south it is common to see people selling produce, clothing, decorator rugs, stuffed animals, or other goods right off the back of their trucks or out of a van. The rule of thumb is this: if you see others doing it without being persecuted, then you can do it too. Gas stations and convenience stores that have gone out of business are great locales. Bring your stuff and set it out for customers to see. Leave plenty of parking room, and expect many people to drive past your setup while checking out the goods.

Other venues include pawn shops, web pages, and collectors. It is amazing what people will collect. Campaign buttons, old books, walking sticks, teddy bears, shaving razors, beer mugs, and even prepaid calling cards have their enthusiasts. Read a few books on antiques and collectibles to become conversant on the subject. Internet sites like E-bay are great as well.

No matter how great a sales person you are, you will eventually end up with some goods that just will not move. You can often sell these in bulk to other dealers at a low price. Charities like the Salvation Army and Goodwill will give you a receipt for donated items that you can use to reduce your taxes.

America is a fantastic place to live, with wealth literally overflowing its containers. It is quite possible to live off the fat of the land, even in these days. Storage building auctions offer fantastic opportunities for the entrepreneur.

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