How Online Auctions are Changing Collections, Delinquencies and Auction Day

Self-storage unit auction day is typically one of the most dreaded events an operation endures. Often there is a lack of a process or system for managers to follow regarding the scheduling of auctions (how often and when.) Then there is the chaos surrounding hosting a public storage auction. Having a number of bidders (if you are lucky) with their pickup trucks and trailers could lead to a crowded parking lot and potentially scare off consumers who were coming to rent a unit.

Other live auction pain points an operator may endure include poor weather and holding off on scheduling an auction until there are number of units in default - to ensure a decent bidder turnout. Not having enough units to draw a big crowd lowers the bidding on some of those units. And if an owner waits a few months to accumulate a few delinquent units for a single live auction event, you can image the needless loss in revenue.

Lonnie Bickford, owner of Appletree Storage for 20 years and now with three locations, was skeptical of online auctions, especially since his stores were not in a big city. But, he also knew live auctions needed improvement, especially with the Storage Wars buzz wearing off. So he delved into online auctions and saw his self-storage business improve in many areas as a result. The benefits were so great, that the once nay-sayer launched his own online self-storage auction site, StorageAuctions.com.

Regularly Scheduled Auctions lower Delinquency

By confronting tenants with the possibility of losing their belongings sooner in their delinquency, you have a better chance to collect. However, starting the lien process on a regular schedule, and not waiting for enough units to make an auctioneer or the bidding crowd happy enough to show up on auction day, operators have seen a 30% decrease in the total number of units sold over the course of a year at live auctions - compared to waiting a few months to have a robust auction. In both scenarios the operator is losing needless revenue.

Online self-storage auctions give owners the confidence to create monthly auction schedules. Because there is no need to wait for multiple delinquent units, you can auction a single unit off online as soon as you have completed the lien protocols. Tenants are less likely to string you along on past dues knowing their stuff will be up for auction sooner rather than later.

Online Auction Garner More Bidders

The shear volume of online bidders can’t be touched by a facility’s live auction. Bidders assume less risk because they do not have to drive out to get a better idea of what is inside those units. Online auction listings show numerous photos to entice bidding. And the bidders needn’t venture out unless they win the bid. Many are also willing to drive a little further than normal because they already won a bid with a gem inside - versus driving out to a facility with hopes of finding the treasure behind a few closed doors.

Lonnie explains, “online storage auctions have given us the ability to draw hundreds, and sometimes even over a thousand viewers to units. Since the bidders don’t have to drive to your store (which helps them save on gas) we can schedule our local storage auctions when our collection reports say it’s time. Additionally, they are successful with even one unit, and weather never forces poor turnout or a cancelled event due to no bidders showing up.”

Streamline the auction process further by using self-storage management software, like SiteLink, that integrates directly with online auction services. Managers save valuable time by automating the listing process.

Article Contributions by: Lonnie Bickford - Owner & Developer at StorageAuctions.com

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