Thanks to “Storage Wars,” every self-storage operator or manager probably has experienced the herds of new and delusional bidders who’ve crowded storage auctions since the show’s inception. We’ve covered the topic extensively on The Storage Facilitator–what can operators do to lessen the negative effects on storage auctions of shows like “Storage Wars” and “Auction Hunters”?
StorageBattles.com may be the answer.
“We were tired of all the people showing up because of the auction reality shows,” said Jim Grant, president and CEO of StorageBattles.com. “They make messes and overcrowd, which is really frustrating and dangerous. We went from having just five people attend an auction to over 100 people showing up. Tenants were telling us that they couldn’t get into the facilities.”
This scenario is certainly not exclusive to Grant. Countless other facility managers from across the U.S. have complained of the ridiculous crowds who flock to auctions hoping to score a vintage car or a mint-condition comic book.
Fighting an ‘Impractical’ Model
To eliminate the hassles of auctions in the “Storage Wars” age, Grant, along with other members of the Self Storage Association, created StorageBattles.com. The site lets storage facilities post their auctions online and promises a more efficient way to hold lien sales, thus eliminating the frustrations that come with hosting live on-site auctions. Facilities still must follow state laws, but posting a unit on StorageBattles.com provides an impressive advertising reach and a streamlined auction process.
In an era when you can do and buy almost anything online, storage auctions remain an exception. For many storage operators, the legal requirements involving lien sale procedures feel outdated and unfeasible. For potential buyers, attending auctions poses a number of challenges, especially now that more and more first-timers are raising bids to exorbitant amounts.
“Most of the time, you’re just wasting your gas to maybe win a unit,” Grant said. “We looked at that model and decided it was impractical.”
The ease and comfort of auction attendees wasn’t the only factor that fueled creation of StorageBattles.com, however.
“These TV shows depict people handling thousands of dollars in cash and give the impression that units have really valuable items inside,” Grant said. “What happens when someone sees an opportunity there to potentially hurt and rob people at the auction?”
There’s also the added worry that the pushing and shoving that in crowds would cause someone to slip, trip or fall. For any storage operator, that’s a safety and liability nightmare.
“We looked at everything from the buyer’s and seller’s standpoints,” Grant said, “and decided to find a way to make it easy for the manager, the sellers and the auction attendees.”
Creating the Site
Feedback from various facilities and bidders has been integral to the user-friendly design of StorageBattles.com, which merged earlier this year with SealedOnlineBids.com.
“We sent the prototype out to a multiple people in the industry and asked them to demo and critique it,” Grant said. “We know that we’re not eBay or Amazon, so if someone has suggestions, they can email us and we can try and make changes to better the site.”
One of these user suggestions resulted in the addition of an incredibly helpful feature–the ability to zoom in on photos. This allows all bidders to clearly see a unit’s contents, solving the problem that so many auction attendees have of trying to guess what’s at the back of a unit. Bidders now can feel confident that they’re making a reasonable and informed bid, rather than hoping for the mother lode.
The site is in its second iteration and boasts several new features, one of which is a map that lets bidders set a radius outside their searched location to view other auction options. Since launching last year, StorageBattles.com has been embraced by buyers and sellers, according to Grant.
“Most people say how easy it is to use, and they like the fact that they can be in two places at once,” he said. “Plus, they feel like they’re getting a really good price for the unit.”
How Does It Work?
Once a facility manager or operator posts a unit on the site, StorageBattles.com’s team of social media marketing professionals promotes the auction through networks like Facebook, Twitter, LinkedIn and Instagram. As the date of the auction draws closer, StorageBattles.com emails people who are in the same state as the auction.
“We are able to convince people from over 200 miles away to look at the unit,” Grant said. “We’ll have an average of 700 views on a specific unit alone and about 500,000 hits a month.”
There’s no denying that StorageBattles.com has grown incredibly since being introduced to the storage industry–it has amassed more than 3,000 facilities and more than 250,000 bidders.
How Will This Benefit Operators?
According to a 2012 survey by the Self Storage Association, the average storage unit sells at auction for about half of the rent owed. “If someone owes you $100 and you only get $50 from the auction of that unit, you’re losing money,” Grant said.
Conversely, the average ending bid on StorageBattles.com is 117 percent of what’s owed on a unit–which means a facility will get all of its rent back, and then some. In addition to the risk of losing money at an auction, facilities also may sacrifice potential tenants because of the delay in auctioning off a delinquent unit. This is another problem that StorageBattles.com solves, as streamlined auctions help reduce the turnover rate. Once an auction is scheduled, facility managers can rapidly rent an up-for-auction unit to another tenant.
“I like the fact that I can turn my units over quicker instead of waiting for the auction to take place. This way, I can facilitate the auction as quickly as possible–within the law–and start moving in new tenants,” Grant said.
What does the future hold for storage auctions? Grant thinks more facilities will move them online.
“I think it’s inevitable,” Grant said. “A lot of auctioneers are telling me that they reviewing the online auction process and are discussing using our website for their portal.”
Images courtesy of StorageBattles.com and bizjournals.com/phoenix