Like millions of people, Jacques Stambouli watches reality TV shows about bidders at auctions who buy the contents of self-storage units. But unlike most viewers, Stambouli takes a professional interest in the shows. As chief executive at Via Trading, he runs a wholesale warehouse in Lynwood that specializes in selling returned goods. As he watched the number of bidders on TV grow, he realized he could attract the storage-unit crowd. So now, once a month, he holds an auction to sell off individual pallets of returned stuff. Normally, he sells them at a fixed price per pallet.
Stambouli started the auctions about two years ago after A&E’s “Storage Wars” and TruTV’s “Storage Hunters” debuted. “For the first few episodes, there were maybe six bidders, and now I look at the screen and see 500 people,” he said. “We are picking up a lot of new customers as these storage unit buyers segue into buying and selling pallets at fixed prices from our warehouse.” Brandon Bernier, a professional buyer of storage units and a star on “Storage Hunters” who lives in Castaic, attended Via Trading’s auction earlier this month with his wife, Lori. He said the popularity of the reality shows has made it increasingly tough to make money on storage unit auctions.
In the last year, the number of people typically showing up at these auctions has more than quadrupled to about 100 bidders. As a result the price to buy the contents has more than tripled, Bernier said. “A year ago, you would pay $300 to $400 for a bin, now you’ll pay upwards of $1,200,” he said. “For me and other professionals, we are buying fewer bins, but the more expensive ones. The goal is still the same – to find that one overlooked item of high value that no one else saw.” Stambouli said the monthly auction accounts for only 2 percent of his business, but it brings in new customers. He has taken specific steps at his auction, such as TV monitors that show the pallets for sale, to attract people familiar with the format of the storage TV programs. “We definitely see more interest in the auctions and volume has spied,” he said.
A spokesman for Glendale-based Public Storage, the largest self-storage operator in the country, declined to comment for this article. He said the company did not want to glamorize the auctions as the contents are their customers’ lost property. Another operator did not respond to requests for comment. Storage facilities auction the contents of units when a renter either stops paying the monthly rent or abandons the unit. While TV programs show people how liquidation auctions work, Stambouli believes the high unemployment rate is what makes it attractive as a business proposition.
“People are exploring how to start a new business on a shoestring,” he said. “If I’m an unemployed guy spending my days watching TV, I might give it a try until something better comes along.” He said the monthly auctions give him the opportunity to get high bids on unusual items such as industrial equipment or very expensive electronics that don’t appeal to his regular customers who typically resell the goods in flea markets and thrift stores, or online. Every month he auctions about 300 lots at an average price of $250, but some pallets go for as little as $1.
Bernier has spent about $40,000 at Via Trading in the past three weeks. He also buys on the Washington, D.C., website Liquidation.com. He resells the goods on eBay or Craigslist. “The new strategy is to go to these liquidation companies and get inventory,” he said. “It’s a crap shoot at their auctions because a lot of times the price is a better deal, but sometimes people get excited and bid way above what they could have paid at a fixed price.” Donna Wilson, operations manager at website StorageAuctions.com in Brentwood, Northern California, said storage facilities in California hold about 800 auctions every month. For facility managers, the auctions are a legal requirement not a profit center. The law requires a public auction before a unit is cleaned and rented out again. Auction proceeds go toward paying the rent due on the unit and auctioneer fees. Any remaining money has to be returned to the former tenant by law.
Wilson also works as an auctioneer; that business is booming. She and her business partner conduct between 50 and 60 auctions a month at storage facilities in California, with a typical sale cleaning out 25 to 40 units. “Sometimes the crowds are so huge we have to split the auction into two days,” she said. “As for prices, I’ve seen units that people used to pay $50 for that go for $1,000 now.” Bernier, the bidder on “Storage Hunters,” said about 80 percent of the contents of an average storage unit goes straight to a landfill, while 20 percent is fit for resale. The escalating prices have made it harder to recover his costs with that 20 percent. But he believes once the crazy fades, he can get back to making good money. “Since these two shows came out, it has gone from an unknown profession to a household word,” he said. “Eventually I think the business will go back to the way it was, but it will take several years at least.”