Monday, December 24, 2012, AM | 3 Comments
As another year passes, many people will start the new year with resolutions for finally meeting their personal goals and making it the best year yet. One of the most important goals that many people make is to make more money or to get out of debt. Finding ways to create additional income is one easy way to do just that.
Storage auctions have become increasingly popular with the rise of shows like Storage Wars and Auction Hunters. They are a great way to make additional income with relatively little effort, and with a little luck and a little practice, you might even be able to make enough to retire or to get out of debt completely.
Here’s what you need to know about how to make money in the new year with storage auctions:
Do Your Research
Not everything you buy in a storage auction will be worth something, and not everything that is worth something will have a ready outlet for sale. You have to do your research to get a good idea of what is valuable, what some going rates are, and where you can sell them.
There are so many items that can turn up in a storage auction that you can never be fully prepared for everything you might be able to buy and sell, but you can at least get a good working knowledge of some of the most common and most valuable items so that you know where to start. Over time, with enough experience, you can become your own reference guide.
Attend Numerous Auctions
One of the best ways to get your feet wet is to jump in. You can do all the research you want, but until you start attending auctions, you don’t really know what to expect. You don’t have to bid on the auctions right away, but you should attend and get a feel for how they are run, what items get the most bids, how people strategize, and so on.
The more auctions you attend, the more you can learn. Make sure you attend several auctions before you place your first bid so that you are comfortable with the process and have a good idea of how to bid successfully.
Take Mental Inventory
When you bid on a storage auction, you do so mostly blindly. You can see what’s inside only from the entrance. You cannot go inside to inspect items, and you cannot open boxes. Therefore, if you can only see stacks of boxes from the door, you may never know what’s inside, and your bid would be based solely on a hunch.
However, there are tricks you can learn to make a better judgment call about what the value of a storage unit might be. For example, you might see designer labels on the boxes or other products you can see. The unit might be neatly packed and cleaned, suggesting that the owner took care to protect what was inside. You might see antique furniture stacked near the back. Learn how to quickly scan a unit and assess its potential value. You may only have a few minutes to make a judgment call that could make you or break you.
Set a Budget
Once you have a rough idea of what the estimate of a storage unit might be, set a budget to guide your bidding strategy. If you don’t, you may get caught up in the frenzy and excitement of bidding and bid too much — cutting into your profits or costing you money. Set a bidding cap for 50 percent of what you anticipate the value of the unit will be, and don’t go over it.
Have Outlets Ready for Sales
You don’t have to own your own store in order to sell the items you purchase at a storage unit, but you do have to have an outlet for selling these items. These can include online vendors like eBay or Amazon, local flea markets and trade shows, or even classified marketplaces like Craigslist. The key is to develop a strategy for sales after you have won the auction. Otherwise, you’ll be turning your garage into a storage unity of its own.
Storage auctions are a great way to make additional income — or to replace your job entirely. As with any new investing strategy or business venture, it is important to do your research to make sure you are successful. These tips can help you to start making money from storage auctions this year to meet your financial goals.
Do you have any experience with storage auctions? Share your tips for success in the comments!
Tara Spenser is currently the resident writer for workingcapital.org, where she researches the most affordable business working capital available. In her spare time, she enjoys blogging, swimming and being a mom.