In recent months, many of our
managers, buyers and followers have been asking about “the latest" thing
to pop up in storage auctions - “Online." Due to the variety of questions
and myths surrounding the issue, we decided to give you our opinions on the
pros and cons.
Storage Auction Experts is in a unique position to offer some
advice on the subject. Why? It's because we are one of the very few companies
to offer both types of storage auctions. A few businesses offer online storage
auctions exclusively. Naturally, when advertising them, these companies make
their service sound most modern and convenient. These companies show only the
benefits of online services versus live auctions, and none of the negatives.
On the other side of the coin, the vast majority of storage
auction companies offer only live auction services. Like the online companies
they only give the value in live auctions.
Storage Auction Experts has conducted thousands of live auctions;
however, because of the demand, we have recently expanded into the online
auction business. Our company offers the best of both worlds, giving our
managers the best information on the best type of auction for their unique situation.
One of the arguments for online auctions from a competitor is
there are “no crowds to deal with.” This can be a positive or negative
depending on the situation. If a manager does not like crowds or is intimidated
by having people on their facility then an online auction may be the way to go.
The same competitor discusses “liabilities” in having large crowds
on the facility. However, in researching the issue, Storage Auction Experts has
not found one instance of a storage facility being sued by an
injury occurring during an auction in California. This “liability" is
nonexistent and therefore NOT a “benefit.”
One of the positives of a large crowd is the intensity of the
bidding that often takes place. Buyers are competitive and often battle with
each other in an effort to gain control of the storage unit. Others often get
caught up in the frenzy of the bid and excitement of the auction. Here's the
proof in the pudding: would buyers rather have small crowds or large crowds? All
buyers know that they would rather have a small crowd rather than a large crowd
because they can get better prices. With large crowds the prices are often
driven higher and faster. Online may have lots of “views,” but this doesn't
equate into lots of “buyers.” One online company brags of “thousands of
bidders.” That's not quite true. Thousands of watchers are closer to the truth.
If a bidder lives in Utah, what are the chances he's bidding on a unit in
Florida? The true bidder number is determined by the distance, convenience and
the value.
Another argument is that online auctions have a start and stop
time that is guaranteed. This is true. Although other companies have had issues
with “lateness,” Storage Auction Experts auctioneers pride themselves in an on time
schedule. That's not to say we're not sometimes late. But, with our scheduling,
contacts with managers and relationships with our buyers, they realize when we
occasionally do run behind schedule they know the reason.
One of the fun things about live auctions is the “unknown
factor." This is the treasure hunt aspect of buying storage units. Buyers
will often bid higher anticipating the hidden treasure possibility. Ask any
buyer who has seen a partially hidden safe. With online auctions photographs
are often taken of opened containers, jewelry boxes, totes and other sealed
objects in order to try and obtain the highest price for each storage unit. By
opening containers this removes the unknown possibilities and actually hurts
prices. Buyers will bid on a closed jewelry box not knowing what is inside. If
the box is opened, the mystery is removed as well as the gamble.
In addition, some buyers are an extremely suspicious breed. It is
their common belief that if someone was to open a jewelry box and see a
valuable piece of jewelry, this jewelry would “vanish” before the inventory
pictures were taken. This is a common suspicion with no finger-pointing at any
business or competition. Buyers would rather gamble with the unknown (and
untouched), than trust someone they don't know.
Buyers also know that if you want to sell something, you show it
in its most favorable light. On eBay, vendors show multiple photographs of
individual items to show the good, bad and ugly. With online auctions, a
missing dresser leg, or a huge tear in a picture may not show up in their area
photographs.
At Storage Auction Experts we obtain the names, ID numbers, resale
numbers, addresses and phone numbers from the person, in person.
If and when a problem arises, Storage Auction Experts is able to deal with
these people directly. Although there's a remote possibility of false
identification, this is greatly reduced when dealing with a person
face-to-face.
Most of identity theft and stolen credit card issues occur online.
How do we know? Before becoming an auctioneer, I was in charge of the Identify
Theft/Fraud unit at Modesto Police Department in California. He's seen more
than his share of these issues and has conducted seminars and lectures about
Identity Theft. Online theft extremely exceeds “in person” identity theft.
Let's suppose a purchase was made with stolen credit cards or a
stolen ID, online auction companies have very little recourse. Who are they
going to investigate? What Police or Sheriff’s department has jurisdiction? A
year and half ago, Storage Auction Experts was defrauded in Kingsburg.
California. We took the suspect and his wife to small claims court and were
awarded $1850 settlement against him. It was only because we had had
face-to-face contact with this person (who provided us with a false name) that
we were able to follow up and win a judgment against him for the Kingsburg
facility and for Storage Auction Experts. [Fresno County Superior Court case#
12CESC00785]. This would not have and could not have happened if the auction
was conducted online.
Here's a another reality in the online world. Who are you bidding
against? Is it a “robo-bidder,” or a real person? If you ran an online company
and after inventory, knew a unit was worth $500.00, why would you let it go for
$20.00? You could have an automatic bidding set up to drive the prices. Or,
maybe you would have your cohorts bid it up. If you lose it, your price was
met. It you win it, you got a bargain. A win-win. Don't kid yourself into
believing this doesn't happen. At a live auction, an auctioneer could have a
cohort, but that person sees everything the other bidders see. There is really
no advantage.
What happens to those garbage units that every facility has on
auction day? I can't count the number of $1.00 units I've sold to the extreme
delight of the management. Will online companies take pictures of this unit and
try to sell it? Of course not. Their only option is to tell the manager it's
their problem.
How about the simple problem if an online buyer doesn't clean out
the unit or abandons it? Storage Auction Experts deals with this situation in
several different manners. Online auction services don't have the same options
open to us. We personally guarantee satisfaction on unit clean outs. If Storage
Auction Experts sells a unit at an auction, we will clean out the unit if the
buyer doesn’t (except hazardous materials).
Another important issue regarding online auctions is the
settlement of the bill. An online competitor of ours took over a site in the
Central Valley of California and conducted an adequate auction. At the
conclusion of the auction, the managers (and later the owner) realized they had
a dilemma The online auction company would not settle up on the outstanding
account until they received their payment at the end of the following week. The
issue? Who is now the lawful possessor of the storage unit that had been
through the lien process, but not paid for? The management did not want to
continue to bill the previous tenant, as the unit had been sold. And, they
couldn’t take it off the books either, as the account was not settled. After
two auctions of paperwork “nightmares,” the facility came back to us.
Online is not all negative. Occasionally a storage facility can
benefit from these services. One is isolation. A facility in Susanville, a
small community located several hundred miles away from other towns and cities
could benefit by showing units to potential buyers that would not travel those
distances for a live auction. Most facilities however, are located near
populous areas, making it easy for buyers to follow the auctioneers throughout
the day.
Another benefit with online auctions is if the facility encounters
a unique situation. Recently a small foothill facility opened up two storage
units containing piano repair equipment. The uniqueness of this equipment may
have found additional bidders with proper online networking. Instead, this
equipment went to the highest bidder in the area.
Storage Auction Experts believe that online auctions do have a
small niche in the world of storage auctions. Online auctions (as a competitor
claims) are not the “future of the storage unit sale industry.”
Some things are just better suited for being done in person. Here's an example:
Would you rather buy a car in person or online. As a seller, you get more views
and potential buyers, when it comes to the sale, very few buyers’ trust 100%
what they see online. In the end, buyers need to lift the hood, kick the tires,
smell the interior and then fire it up. It's the same with storage units. If
you don't trust what you're seeing in photographs, you probably will spend
less.
We hope this offers a brief look at the benefits and negatives to
both types of auctions. Storage Auction Experts is continually looking for the
newest and latest ideas. While online auctions have their place, for maximum
return, live oral storage auctions are still the BEST way to go!
Craig Plante, Auctioneer
Storage Auction Experts
