Bidding is arguably the most influential element in determining the success of a buy-sell storage auction business. If you overbid on units that contain few-to-no valuables, you won’t be able to sustain a profitable business. On the other hand, however, bidding the “right” amount on valuable units can yield huge returns, which is exactly what you want to achieve on each and every auction.
So, how do you know what to bid at a storage unit auction? Unfortunately, there’s no simple answer to this question. Due to the nuances between the different auctions, you’ll need to develop a general understanding of the bidding process and how it works to increase your chances of success. Whether you’re a first-time storage unit bidder or if you’ve been doing it for years, we have some tips that are sure to help.
Sizing Up a Storage Unit
The first step in bidding on a storage unit is to size up its contents. When the auctioneer cuts the lock, you and the remaining bidders will have a couple of minutes to peek inside to see what it contains (without touching, of course). Assuming you have a flashlight on hand, shine it inside and begin calculating the depreciated fair market value of the items you can see. Remember, you want to determine how much you can actually sell the items for, not the retail price of the items.
Knowing When To Pass
One of the most common mistakes beginners make is bidding on every storage unit. There’s no rule — written or otherwise — stating that you must bid on every unit up for auction. On the contrary, this type of practice will send you down a path to failure, as some units will have minimal value. This is why it’s critical that you size up the unit before placing a bid.
If you’ve been in the storage auction business for a while, you’ve probably come across two or more bidders getting into “bidding wars” with one another. As the name suggests, this occurs when bidders raise their bids in at attempt to knock the other out commission. There’s no clear winner when this happens, as the winning bidder is forced to overpay for the auction. The bottom line is that you don’t want to get sucked into a bidding war.
Have any other bidding tips that you would like to share with our readers? Let us know in the comments section below!