Personally I'm not a huge fan of the online variety of auctions. I find some facilities use poor pictures, sometimes pictures are mis-leading and make a unit seem smaller or larger than it is. Also, you can't get quite as good a picture what is in the unit as being up close and personal in person and not online. Despite my lackluster attidue towards online auctions however many people love them and they are as popular as ever.
The increase in industry awareness driven by TV shows like “Storage Wars” is generating a wave of online-auction platforms that offer different benefits, price points and opportunities. Sellers and buyers can now choose a provider based on their own priorities. Here’s a look at how online auctions work, the benefits to storage operators, and tips for choosing a platform that’s right for your business.
How They Work
Most auction websites explain in detail, through text and video, how simple it is for sellers and bidders to open their account. Essentially, these online platforms use an eBay-style format in which storage operators can post pictures and videos of units available for auction. Each auction listing must contain the unit number and size, a description of the contents, start and end dates/times for the sale, the starting bid, and the facility’s contact information.Potential buyers can bid on these units via their computer, tablet or smartphone. The system allows them to participate in auctions outside their immediate area and pick up the items in the days following the sale. When an auction closes, the seller and winning bidder receive a written confirmation.
Dependent on state legislation, the auctions only take place after all legal notifications to delinquent tenants have been completed via newspaper, e-mail and registered letters. Many state lien laws specify that a public sale must take place at the storage facility. The online auction satisfies this requirement, as the physical transaction takes place at your site. It’s still highly recommended that you review the online-auction process with your legal counsel and state self-storage association before proceeding.
Benefits
Online auctions offer many benefits to storage operators. First, they come with none of the headaches that often accompany onsite auctions. For example, you might get a crowd of people at an onsite sale when, realistically, only a few regulars will bid on units. Some tenants complain about the crowds or not being able to find parking. In addition, there’s an increase in noise and garbage, and operators often find themselves in need of extra staff or security. An online auction makes all of these problems disappear.Storage operators who sell online benefit from decreased costs compared to using auctioneers, who typically charge 15 percent to 25 percent. The process is also much faster. With onsite auctions, operators sometimes have to wait months before they have enough units to justify an event. The cost to hold those delinquent units adds bad debt directly to the bottom line. The bad debts continue to grow, eroding the profitability of the storage business. With an online platform, operators can list a single unit at any time. For example, you could list a unit today, empty it by next weekend and rent it to a new customer by the following week.
Storage operators also benefit from having their logo visible on an online-auction site 24 hours a day for several days to a week, which promotes the facility, draws traffic and is less expensive than newspaper advertisements. Partnering with an online-auction company actually complements a facility’s marketing efforts in a high-visibility, strong impact manner. Many bidders rent from facilities they discover through online listings.
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