When we wrote our first article about buying storage units at auction, little did we know that the whole field would soon be engulfed in scandal.
Recently, Dave Hester, one of the stars of the popular A&E reality show “Storage Wars” alleged the show is fake, that valuable and exotic items are planted in some of the lockers to make things more interesting for viewers, and that the bidding is also rigged. A&E has fired Hester and he’s filed suit against the network.
There’s no doubt the show has contributed to a surge of interest in buying abandoned storage units. But if “Storage Wars” is “a fake,” as Hester says, should that discourage resellers from sourcing items through storage locker auctions? Is the bloom off that rose?
The storage auction business is ultracompetitive, with many high-volume buyers happy to lose money on an auction just to discourage someone they consider an amateurFor the straight scoop, we turned to Glendon Cameron, who with his 600 YouTube videos with more than 2 million views, successful books, podcasts and years of experience buying storage lockers at auction, is as much of an expert on the topic as anyone.
‘Recovering storage auction addict’
A self-described “recovering storage auction addict,” Cameron has consulted on shows that compete with “Storage Wars.”
He brought to his storage auction business 15 years of management, marketing and outside sales experience. He’s also a “serial entrepreneur,” who had about five businesses that failed before he hit it big with his storage auction business, he says.
“Hit it big” makes it sound too easy, though. He’s the first to admit the path to riches was anything but easy. Glendon got into the business around 2001, working part time at first. He was in the business of buying storage lockers at auction for about nine years, working full time most of that period.
From garage sales to storage auctions
Glendon tells us he got into the business after a “great” garage sale experience.
A good friend, who loved garage sales, thrift stores and the like, started the ball rolling. The partners held a garage sale and made $1,700.
“The profit margin was tremendous,” Glendon notes. They had “maybe $50” into it, he adds.
In a scenario that’s familiar to eBayers, after that first adventure, Glendon decided he wanted to find more used stuff to sell. That’s when he went to his first storage unit auction. But it didn’t take long before he “found he was pissing people off,” he reports.
It turns out the storage auction business is ultracompetitive, with many high-volume buyers happy to lose money on an auction just to discourage someone they consider an amateur.
“There’s a lot of downtime during auctions. It’s hurry up and wait”Learning the tricks of the trade
But Glendon kept at it, treating buying storage units at auction like a business from day one. Although the business was never easy, “it wasn’t as exposed to the public the way it is now,” he says.
Shows such as “Storage Wars” naturally got a lot of people thinking they, too, could buy units and resell the contents at a nice profit. Still, there was plenty of savvy competition. He found that experienced bidders would note his bidding history, and that set him up for failure.
If you are ultraconservative and always top out at a certain point—say $300—people will go $5 above your limit, he discovered.
Glendon may have been duped by more experienced bidders at first, but he caught on. In his first year, he bought 10 to 15 units per month. That eventually grew to 25 to 40 units. He earned $90,000 that year. He had learned how to bid wisely and stay busy.
“There’s a lot of downtime during auctions,” he continues. “It’s hurry up and wait.”
Often the actual auction itself would only last 15 minutes. So Glendon took his laptop and was in his car working during those downtimes researching items on eBay.
Many times storage facilities would try to reach tenants up until the very last minute. Glendon learned to call a couple of days before the auction to see how many units they would actually be auctioning offHunting for sales
Finding auctions wasn’t difficult, but it did require some legwork and follow up to make sure he didn’t waste time. Storage locker facilities must place notices in local newspapers if units are going to auction.
So Glendon checked the papers for these notices. He also called every storage unit facility in his native Atlanta to ask about upcoming auctions.
As they became available, he also used online listing sites like storagetreasures.com, storageunitauctionlist.com and auctionzip.com to scope out other upcoming auctions.
On the surface, these sites make life easier for the storage auction hunter. But listings go out of date quickly. Many times storage facilities would try to reach tenants up until the very last minute to collect overdue rental fees. Glendon learned to call a couple of days before the auction was scheduled to see how many units they would actually be auctioning off.
The bidding strategy
Glendon paid an average of $280 to $350 per unit. He found that spread yielded the most profit.
“If you buy in volume, you can make a lot of money,” he says. When you’re deciding whether to bid on a unit, you have to make a decision based only on what you can see.
You’re not permitted to actually go in the unit itself and poke around.
“Maybe two or three chairs, a nightstand, 10 to 20 things can tell you a story,” he notes. He adds that people spend less money on big units than on small ones because the “big ones are more work.”
Auctions filled with strikeouts, homeruns
One of his best scores was for a unit that “looked like hell,” our expert tells us.
In the front of the unit was a beaten up roll-top desk with lots of cobwebs. There was little else that made it worth bidding on from what he could see. So he paid a just a dollar for it. Tucked far inside was a safe with Kuggerands, “estate quality jewelry,” a coin collection and more, yielding a total value of $62,000!
“Sometimes people store actual trash mothballs and nothing of value”Of the 1,300 units or so he bought over the years, maybe 35 have been of that caliber, he notes.
Yet Glendon’s had his share of disappointments. Very early on he lost $1,000 on a unit that looked good from the door. It turned out there was nothing there of any value. He learned that a unit can look great but you can still lose money.
“Sometimes people store actual trash mothballs and nothing of value,” he tells us.
Selling items takes time
Glendon estimates that it takes from six to 18 months to turn a profit if you’re building a storage auction business from scratch. He firmly believes that with any business you reach a point when it begins to work.
But with this business, you definitely need an infrastructure in place. That means a truck to haul stuff away, but most importantly space to store what you buy.
To resell items he says that everyone uses Craigslist for the most part. For certain items he found eBay was a better option. Not an eBay expert himself, and lacking the necessary time to list, Glendon would take truckloads of stuff to experienced eBayers who would sell the items for him. He’d pay a commission of 20 percent (much lower than what eBay trading assistants usually get), because of the volume he was offering.
By 2009, Glendon was ready to take his knowledge and parlay it into another career as a writer and content provider. His first book, Making Money A-Z with Self Storage Unit Auctions, sold well enough to encourage him to write others.
He claims this book “pissed people off.” His website was hacked and he was attacked in Internet forums. He can only surmise that competitors were angry with him for giving away too many trade secrets. Such is the price one pays for success!
