Long gone are the days when three people would show up to your facility for a lien sale, and your main goal was to get your units back. It was painful to watch a unit sell for $20 when over $1,000 was owed, but it was the nature of the beast. Get it sold, write off the debt, and move on to more important things. That is no longer the case with your delinquent units. With the growth of online storage auctions over the last several years, and the vast amounts of data now readily available to operators, we have learned that you CAN recover more debt from your lien sales if you follow a few simple, data-backed best practices.
Online Auction Platforms Offer Insights into Bidder Behavior
One of the most revolutionary things about online auctions is they allow both operators and auction companies to recover data that was not available with live auctions. Our database collects key data sets as auctions are posted on our website that, when analyzed by our technology, show trends in bidder behavior, auction performance and more.
StorageTreasures has collected many diverse sources of auction data since 2016, and we can not only show you how to prepare for a successful storage auction but also what you need to do to ensure you recover the most debt owed to you possible. Based on information from over 670,000 units sold, we have data-backed best practices that can help you reduce your bad debt and recover more revenue from your online storage auctions.
Storage operators typically ask two standard questions about switching to online auctions.
- What is your average sale price for a unit?
- What is your average debt recovery % for delinquent units?
StorageTreasures evaluates factors ranging from the number of units listed in a month to what day of the week a unit closes. See below for a list of our most common data sets.
- Average sale price by day, week, or month
- Average lien loss recovery per month
- Number of auctions per month
- Number of days a unit is posted online before the close of the sale
- The number and quality of the photos showing the unit contents
- The average number of bidders per month
- The average number of unit views per month
- The average price range of units sold
- Number of unique bidders using the site each month
StorageTreasures can also break this data down to specific states or Metro areas to further examine how to succeed in specific auction markets. We then take this data and determine what we call “sweet spots” for all elements of your lien sale. For example, see the chart below that shows how the amount of clean-out time you give bidders affects the sale price of your units.
You might think this part of your auction process would have little to no effect on the final sale price. As you can see, our data shows otherwise. Most interestingly, these results do vary significantly by state. The chart above shows the impact of clean-out time in all the United States. Look at the chart below for the results from the state of Texas.
Bidders in Texas bid more and spend more on units with a 24-hr clean-out time over those that offer 48 or 72 hours.
With data such as this, we have developed what we believe are solid data-backed best practices to help you have successful auctions, and we want to share them with you.
The most critical element of your online auction listing is the pictures. Good pictures can be the difference between a $300 unit and an unsold unit. It seems common sense to say you need to have good pictures for an online listing, but the data speaks even louder about the importance of quality photos. StorageTreasures’ data shows the “sweet spot” for the number of pictures is (at least) 10. While that may sound like a lot, especially for some units, do not forget, we have over 600,000 auctions sold to backup this data. The data shows, the more pictures, the higher the price. See the chart below for the correlation between pictures and the average sale price.
The orange vertical lines represent the average sale price. You can see as the correlating number of photos increases, so does the sale price. Understandably, there are going to be units for which you cannot get 10 pictures. Think of a 5×5 with a tiny box in the corner. That is ok. You do not need 10 photos of that unit. However, for most units, you can get ten pictures.
The most important thing to remember is even if the pictures are similar or redundant, MORE PICTURES STILL DRIVE HIGHER PRICES. Pictures are the bidder’s eyes into the unit. The more pictures, the more meat they have to chew on and consider. They like to zoom in on serial numbers and markings on boxes. They want to research the items to decide how much they should bid. The more pictures the bidders have, the more time they will spend looking at your unit, and the more likely they are to bid. So, you can see how even similar pictures can still pique a bidder’s interest.
Auction duration refers to how long your unit is available for bidding on StorageTreasures.com. Once again, the StorageTreasures “sweet spot” is 10. Ten days is the least amount of time you should have your units listed on the website. There are a few reasons for this. The first is so bidders can examine the unit and look closely at all the pictures. As mentioned above, bidders like to explore the contents of the unit.
Another reason to list units for at least ten days is to allow our Marketing team sufficient time to market the sale. StorageTreasures uses Google ads, Facebook ads, auction directory sites, email marketing, and many other platforms to drive bidders to your sale. One, two or even three days is not enough time to promote your auction.
StorageTreasures often has over 3,000 units closing on the same day. If you go to our homepage, you will see units are listed in order of those closing first. How can you make sure your units get seen and are not lost in a sea of countdown clocks?
Every auction listing on StorageTreaures requires a description of the items in the unit. A full description may seem like overkill with the many pictures you have already uploaded, but the search functionality on our website does not index images. Bidders will use keywords to search for units containing the items they want to buy. This search function is tied to the words provided in your description. For example, if someone searches for “furniture” and you have a unit listed full of furniture, you want your unit to pop up for them to bid on.
The more descriptive you can be, the more likely you are to get a match for your listing. While household goods might describe everything in your unit, none of our bidders ever search for household goods because that search would not narrow the results very much. If you have furniture, list the furniture types. For example, “couch, dresser, two tables, dining hutch, patio furniture, three lamps, entertainment center, baker’s rack,” instead of just furniture.
To further help you get your listings noticed, StorageTreasures provides categories you can select to indicate the items in the unit. On the auction search page, those same categories are available for a bidder to narrow their search. These categories are another way to potentially match your auction with an interested bidder. Since the start of 2020, bidders have conducted over 1,200,000 searches using the categories provided.
StorageTreasures tracks the activity on category searches, and the top ten most popular searches are listed below in order.
- Motor Vehicles & Parts
- Tools & Supplies
- Clothing & Shoes
- Household Furniture
- Cabinets & Shelves
- Sports & Outdoors
- New Merchandise
Auction End Times
The time of day your auction ends is significant. You do not want an auction to end at midnight or one in the morning. You have to keep in mind the clean-out time provided when you choose the auction end time. Your office should be open when a bidder’s clean-out time runs out, particularly if you collect a cleaning deposit. You may also want to take into consideration weekends and holidays.
Another essential part of your auction end times is the need to stagger closing times if you have multiple units listed at once. For instance, if you have five units, have the first unit close at 11:00 am, the second at 11:05, the third at 11:10, and so forth. These staggered end times allow your bidders to watch multiple units close rather than selecting one specific unit to focus on.
Data shows a bidder is more likely to buy a second unit from a facility if they will already be onsite to pick up a unit. A common suggestion is to close the auction that you think might be your best unit first, and then stagger your end times from there. If bidders are already committed to coming to the facility, they might pick up another cheap unit to supplement their trip. Staggered end times could be the difference between a $0 unit and a $10 unit.
Additional Auction Resources
The items listed above are just a small sample of things you can do to improve your auction sale prices. We have several more tips available for operators and facility managers in the StorageTreasures Help Center. You can find the section for Facility Managers here.
If you are interested in online auctions and want to learn more about auction trends in your local area, you can reach out to your Business Development Manager today to get more information and a personalized demonstration.