3 Tips For Successfully Getting Started!
I often hear people complain about the reality of reality television. And I can understand the frustration to a degree.
But it’s important to remember that these shows, while informative and interesting, are for entertainment purposes! And yes, they always show the units that are full of treasure, but what you don’t see are the countless units that they buy that contain nothing but trash. The shows wouldn’t be very watchable if they highlighted those units constantly.
The shows also often focus on professionals with years of experience, so you don’t get to see their growing pains as new buyers as they begin their business, struggle to gain a customer base, learn the tricks of the trade, learn to value units and obtain knowledge and become experts in various niches that allow them to buy with confidence.
From more seasoned veterans, I’ve heard this complaint, or a variation more times than I can count; “The shows makes it look so easy and like units are always full of treasure and that’s just not the case. It’s unrealistic to what I actually do for a living and they overbid on all their units and overvalue what they’ve won. Because of the show, now more people show up to auctions and drive up the price and I can’t make as much money as I used to!”
From newbies I hear similar complaints. “The show makes it look so easy. Those guys always find valuable treasure and make tons of money. But I’ve gone to a few auctions and it’s not realistic. I never seem to be able to win the units I want, the veterans push me around and I always end up overpaying on the units I do win because they end up being full of junk! I’m not making any money and I can’t sell what I win!”
You can see that there is frustration on both sides of the aisle in terms of paying a fair value for units. Everybody gets frustrated with the other guy sometimes!
Well, I’m here to officially stat that there is room for everyone at auctions! This business in no different from any other business in that everyone has to start somewhere!
I believe that much of these complaints and concerns all come from the same place and that is a new buyer’s lack of knowledge. This causes the new buyer to over spend, which is no good for them, or the experienced buyers.
Below, I’ve compiled a list of 3 Steps For Getting Started in the business succesfully!
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Bring Limited Funds and Sell Everything!
One of the main issues a new buyer faces is how much money to bring to an auction. They want to be prepared and they want to be able to buy any unit of their choice. They often get caught up in the thrill of the auction and bidding against other buyers. Don’t fall into this trap. As we’ve already talked about, this isn’t in anybody’s best interest or bottom line. Instead, bring a limited amount of money with you to auction. Set a reasonable limit based on your budget.
As a new buyer, you may not have the same knowledge level that some vets have, but everybody has hobbies, or things that they love, and more than likely, you aren’t the exception to that rule. So if you’re just getting started, hold off on bidding on the mystery units, and try to purchasethe units with merchandise that you can see and that you’re familiar with. This ensures that you can at least make an educated guess on the value of the unit. As a rule of thumb, review the unit for items that you’re familiar with. Based on items that you can assess, determine the value of the unit, then take that amount and divide it in half. The divided amount should be your maximum bid. This ensures that you at least break even on each unit.
You may be tempted to keep items you win in the unit, but remember that no matter how interesting an item is, you are in it to win it. In this instance, “it” is money. So unless an item appreciates with age and will sell for more money down the road, it’s gotta go! Keeping items is a bad habit to get into in terms of making money.
You may not be able to afford renting a unit with the money you’ve made at auctions, in the beginning, so then you’re eating into profit you don’t yet have and you’ll never make money like that.
It’s also not great for your sanity. Sure, at first it’s just one or two items, but then it’s more, and soon you’re either having to rent your own storage space (profit loss) or your friends and family end up submitting your name to Hoarders. (We all know how that ends and it isn’t so pretty.)
If you’re just starting out, you may be tempted to buy larger units with the mind frame that the larger the unit, the more opportunity there is to make money. This isn't necessarily untrue, but there are many factors to consider when purchasing a larger unit and as a rookie, it may make more sense for you to buy smaller units.
Just remember, it’s all about baby steps! In this scenario, you’re Bob. If you bite off more than you can chew by purchasing a larger unit right off the bat, then you’ll wind up like Dr. Marvin. Boy, did that guy not know what he was in for! Bill Murray + Richard Dreyfuss = Comedy Magic
For one thing, emptying out a larger unit takes manpower and time! If you’re new to attending auctions, you may be a one man show and may not have anyone to help you with the process of emptying the unit. In most cases, when you win a unit, you are required to pay a cleaning deposit that is refundable only if you clean out the unit within 24-48 hours. You don’t want to end up in a situation where you lose your deposit and eat into your profit.
While larger units can mean larger profits, they can also mean more trash. Again, taking trash to the dump costs you money and eats into your profit.
Finally, smaller units usually go for less money and are more likely to sell within your price range. You may be able to get the unit at a steal, and avoid bidding wars with bidders with deeper pockets than yours.
Unit sizes vary and traditionally range anywhere from 5’ X 5’ spaces to 10’ X 30’ units. Until you’re better acclimated, stick to buying units no larger than 10’ X 10’ units, that are roughly the size of a large bedroom and can be emptied into your truck or SUV in one load!
In terms of value, the possibilities are unlimited, from electronics to jewelry to furniture, these units can turn an amazing profit for their size. Eventually, this will allow you to begin buying larger units with ease.
Soon you’ll be buying in bulk and will no longer be the new guy!