A couple weeks ago my friend invited me to go to a storage locker auction that was very close to my house. He used to attend the auctions in North Carolina and even bought 5 or 6 units with some success. I have seen some episodes of the A&E show “Storage Wars” and always thought it might be fun to see what it’s all about. The experience was surprisingly close to the TV show, only with no valuable antiques or rare mannequin phones.
We arrived a few minutes before the auction was supposed to start. My friend registered at the desk and received a bidding number. We then waited, and waited some more. The auctioneer was apparently running late, trying to make it across town from another property the storage company owned. It is typical for the auctioneer to follow a prescribed route and many of the “professionals” follow him (or her) to each location throughout the day. The auctioneers generally take a 25% cut from each winning bid.
While waiting, we mingled with the locals. There was an eclectic mix of other people there: a mother-daughter duo, several guys that looked like they just left a job site, a portly guy in his mid-twenties that could double for Big Hoss from Pawn Stars, and a middle-aged guy that looked like he knew a thing or two about buying junk (don’t ask me what that looks like, you just know). There was also me and my friend, dressed in business attire on a humid, triple-digit day. Boy, were we sweating…and it wasn’t from the intense bidding wars.
We spoke with an older gentleman that knew the scene very well. He was retired and this seemed like his hobby for the last three years. He told us where he sells his goods after a winning bid and how to make a quick flip. He had buyers that specialized in items such as leather goods, baby clothes and large furniture. He postulated that he would sell his items to resale shops for about 10 percent of the new price and they would mark it up from there. He also told us that if one of three individuals was present, there was no reason to bid because you will lose every time. This sounded reminiscent of Dave (“yep”) Hester from the TV show.
We evetually were taken to the first locker where a large line formed and each person had the opportunity to peer inside with flashlights. As is custom, no touching or entry is allowed. The locker was about 10 feet wide and 15 feet deep. You could tell it was from an apartment cleanout. There was big screen TV (the gigantic, worthless kind), an adjustable bed, various furniture pieces, a nice stainless steel smoker/grill, a bunch of clothes and boxes, and some nice hand tools. The auctioneer quickly opened the bid and after literally about 3 minutes it was sold for $175. Considering all the items in there, my friend and I both saw enough value to make about $125 to $250 of profit. Not bad, but there was a fair amount of work there. You have 48 hours to clean out the locker, which would require a truck and another place to store the items before you managed to sell them. Many people have to lease back their unit which dips into profits. Large items with no value, like the big screen require you to go to a dump or recycling center, which could cost you money as well.
You might think by the way things are done that there are laws or rules that the storage company must follow. This is not the case. Many storage comapnies go through the units before they are auctioned and take the good stuff. That is why most guys like to see the original lock cut off the unit. If word gets out that a particular storage company is skimming the lockers people will start to stay away. Some storage companies will also employ another tactic by putting something really valuable into a unit (like a car) and setting a rediculously high reserve on it so it never gets sold. They will then post pictures of their auctions online showing previous units so people think they might hit the jackpot at this particular lot.
We saw a few more units including one which included a full DJ outfit with many large speakers and some digital mixing boards. It also included some professional painting equipment. We spotted a few guitar cases, which after the sale, were found to be empty. This unit sold for $1400. There was certainly cause for bidding this type of money, but it was a bit risky. This was the only unit bought by someone other than a man that bought the other five units.
Overall, I thought the winning bids were fair and left a fair amount of “meat on the bone”. Some of the regulars mentioned that when the reality TV shows came on it boosted the going rate of a locker sky high. The interest from the show apparently drove a bunch of would-be buyers out to the auctions and they would naively overpay for their treasure (junk).
So the question is, can you make money doing this? The answer is yes, but like most things it takes work. For one, the job is more like running a moving company than anything else. You need to have trucks, trailers, dollies and muscle. I lack all of those things. Also, I personally hate moving. So moving someone else’s dirty stuff does not intrigue me very much. Additionally, you might get stuck with some toxic chemicals that are costly and annoying to dispose of. However, I do like selling things on Craigslist and the thought of finding some buried treasure has a certain draw to it. So the bottom line is, unless you own a resale shop or like it as a hobby, going to storage auctions is probably not worth it from a financial perspective.