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The auction gamble
Companies like Storage Auctions USA (www.storageauctionsusa.com) and Storage Auction Solutions (www.storageauctionsolutions.com) put their schedules for upcoming auctions online. Here are some upcoming scheduled auctions (remember, these are subject to change):

Thursday, Feb. 10, at noon, at Newmarket Storage, LLC, 133 Exeter Road, Route 108, Newmarket, 659-7959
Tuesday, Feb. 22, at 11 a.m. at Extra Space Storage, 1 Chestnut St., Nashua, 881-3011
Tuesday, Feb. 22, at noon, at Extra Space Storage, 551 DW Highway, Merrimack, 424-0378
Wednesday, Feb. 23, at 10 a.m., at Uncle Bob’s, 11 Integra Drive, Concord, 225-5627
Wednesday, Feb. 23, at 11 a.m., Uncle Bob’s, 1902 Wellington Road, Manchester, 644-1502
Monday, Feb. 28, at 3:30 p.m. at M & M Francoeur & Sons, LLC, 220 Derry Road, Hudson, 889-2169
Wednesday, March 2, at 10 a.m., U-Haul Center South Willow, 515 S. Willow St., Manchester, 668-1762
Wednesday, March 2, at 2 p.m. at U-Haul North Manchester, 442 Hooksett Road, Manchester, 668-7520





Treasure or Junk
The true story of storage unit auctions

02/03/11



Without advance warning, the storage auction on South Willow Street in Manchester was canceled — just a hand-written note taped inside the office door. This infuriated the buyer from Massachusetts who climbed out of his Cadillac to read the sign for himself. He didn’t trust his competitors. But for the trio of gruff veterans, guys who have been buying storage units up and down the East Coast since the ’70s, it was no surprise. Happens all the time, actually.

As snow swirled, the men huddled around their Geo Metro chain-smoking cigarettes and swapping stories about the good old days when storage auctions were unknown but to a niche group of die-hards.
My, how the times have changed.

A smooth black BMW rolled up and the window rolled down. A cute blond in her 20s with a bright pink winter cap asked if the auction had been canceled. In response to the answer, the car glided away. One last drag of his cigarette and then the oldest guy in the group said what was on the others’ minds:

“Those are the people who watch the [bleeping] reality TV show.”

What is it all about?

The television show in question is A&E’s Storage Wars, a real-life series that follows four California men who buy storage units. The show’s popularity, and to a lesser extent Spike’s Auction Hunters, has brought mainstream America into what was once a hidden community. The radio show This American Life also did a piece on storage unit auctions, which reran last weekend.

The premise of Storage Wars, and storage auctions in general, is simple. People have stuff. They keep that stuff in storage units. For that privilege they must pay a monthly rental fee. If after about 90 days they have failed to pay their rental fee, all the stuff inside the unit goes up for auction.

At the auction, the storage unit door is opened and buyers get a few moments to peek inside. It is only long enough to see the stacks of boxes, upended furniture and overflowing Tupperware. There is no way to know exactly what is in the unit. Then an auctioneer begins taking bids. In the end, the highest bidder gets the storage unit and all the junk or treasure inside. The process is half detective work, half gambling and entirely addictive.

“It really relates to a lot of people,” said Mike Jaglin, an associate producer for Storage Wars. “There is great competition, and the American public loves to compete.”

The show, which premiered on Dec. 1 to 2 million viewers, is billed as modern-day treasure hunting. And, if what it portrays is accurate, then storage units were what Robert Louis Stevenson was writing about.
In one episode, a character named Dave bought a storage unit for a few hundred dollars. It was filled with old newspapers. After bringing these newspapers to a specialist, Dave found out they were from the days immediately following Elvis’ death. Each paper was worth $5 or $10. Dave had 6,000 of them. In another, Darrell’s unit was filled with nothing but trash until he found close to $10,000 worth of coins.

With visions of lucrative scores dancing in their heads, Storage Wars has been averaging 2.3 million viewers per episode since its December premiere and after its first month was already renewed for a 20-episode second season. (New episodes air on Wednesdays at 10:30 p.m.; see www.aetv.com/storage-wars/ for more.)

It should be no surprise then that the success of Storage Wars has trickled down from cable ratings to storage facilities around the country.

From Hollywood to your back yard

Glenn Chaloux, the general manager of Fast Cash Trading Center in Salem, has seen a boom in business. Chaloux said people used to come in once a month to sell items from storage auctions. Now he’s getting two or three a week. Justin J. Manning of Storage Auctions USA, an auctioneer company based in Yartmouth Port, Mass., said a few years back his company did auctions at 35 to 40 sites per month. Now they’re easily doing 100, primarily in New England.

The success of the show has been most beneficial for companies, like Manning’s Storage Auction USA, which consists of seven auctioneers who travel to different storage facilities facilitating storage auctions. The auctioneers are either paid a flat fee by the storage facilities for their time or 10 percent of what the units go for, if that is higher. The more bidders, the higher the price is driven up, the more money the auction company makes.

“If you only had 10 auctions you wouldn’t make any money,” Manning said. “With all the driving and manpower you need at least 100 to make it worthwhile.”

To get the word out, a company must advertise. Manning said, while some is done to storage facilities, most of the marketing is meant to attract potential buyers. Storage Wars is essentially working as their promoter.

“At a typical auction we may have eight bidders,” Manning said. “Now the crowds have more than tripled.”

Before the show, Manning said, there were four typical buyers: auctioneers who had their own auction barns, people who sold at flea markets, eBay resellers and interested consumers. It is this fourth group, the interested consumer, that has exploded and in many ways turned the game onto its head. This has upset many of the long-time buyers who don’t look kindly upon new people driving up the prices.

“Everyone thinks they’re going to get rich,” said Todd Cimma, who has been attending storage auctions since 1999. “That’s not how it works. Now a unit that would have gone for $1,000 is going for $1,700. I’m thinking about lying low for a while and waiting for this fad to blow over.”

America is changing

The popularity of Storage Wars is not based solely on entertainment value. It also has a great deal to do with timing.

You see, getting rich is as much a part of the American narrative as picket fences and dogs named Spot. And with the U.S. Bureau of Labor Statistics reporting a national unemployment rate of 9.4 percent in December, the traditional economy is changing.

“The old days of working for the same company for 30 years are gone,” said Jeffrey Klenotic, an associate professor of Communication Arts at the University of New Hampshire at Manchester. “People have to think about new ways to generate money. More are becoming entrepreneurs in the new economy.”

Storage auctions are capitalizing on this new business model. With a stagnant economy and high unemployment, people are looking for alternative ways to make a buck. Hence a greater interest in storage auctions. With a stagnant economy and high unemployment, people are unable to pay their storage unit fees. Hence more storage auctions. To steal from Sebastian Junger: it is the perfect storm.

But it isn’t smooth sailing for everybody. In fact, it is a fine line for Manning and other auctioneers to balance upon. They must enjoy the moment (an extra $700 for a unit is beneficial to them) but remember the American attention span is short. A new television show will capture its imagination or the economy will blossom and there will be fewer people defaulting on their units. When this dust settles, there will be the regular buyers remaining — the ones who were involved before the show — and it is bad business to alienate them.

Real reality

This is because, despite what the show depicts, the profit margins are rather slim. With more people bidding, especially rookies, the price can be driven up and profit can be lost. The reason, according to seasoned buyers, is there aren’t typically huge, life-changing scores.

That isn’t to say there isn’t money to be made. People wouldn’t keep going to auctions if they weren’t financially beneficial. Lighting does strike. Chaloux at Fast Cash Trading Center said a woman came in recently with just under $10,000 in gold. More typically, it provides a very nice business for many. But, like most businesses, it takes work. An episode of Storage Wars is condensed to 23 minutes (without commercials), which clearly doesn’t illustrate all the hours of loading up a truck, hauling it home, unloading and throwing away trash. What is left, typically, are items that can be sold. Parker Brodrick, owner of Trillians Treasures (stores.ebay.com/trillians-treasures), recently had a successful storage auction. He made money on eBay selling a Zippo lighter, a Camel lava lamp and a Smith Ski Helmet. Brodrick is not going to retire on these sales.

“People think they’re always gonna find gold,” said one long-time buyer. “Ain’t how it works. There ain’t a huge market for second-hand [sex toys].”

Compare that to the episode where Darrell finds thousands of dollars worth of coins. In real life, this is unlikely to happen.

“If someone had thousands of dollars worth of coins, why wouldn’t they pay the $65 storage fee?” asked Cimma. “What happens far more often is if someone is not going to pay, they go in and clear out all the good stuff and leave the junk.”

Unless of course, the person has died or gone to prison, but then there are different problems that arise. Cimma said going into an unknown storage unit can be dangerous. He knows people who have found used drug needles, a blood-stained noose or hazardous waste materials or had chemicals spilled on them.

When Brodrick went to an auction at a climate-controlled storage facility outside of Boston he was amped. Items that need to be climate-controlled are usually quite valuable. On this day, he found much more than he bargained for.

“When they opened the door to the storage unit there were three people living inside who stunk to high heaven,” Brodrick said “I think they must have had food in the unit because they didn’t seem malnourished, but it was quite unbelievable.”

While this is rare, Brodrick wasn’t the only buyer to have a horror story of someone being found inside a storage unit. But typically, a buyer is much more likely to find junk.

Aric LeClair often attends auctions to help his father, Rod, who owns Fair Trade Antiques in Swanzey.

“We recently bought a unit, it looked pretty good from the outside — it had some furniture, some electronics, and we could see a freezer in the back,” LeClair said. “After we bought it we started to go through it, everything ended up being broken and there was mouse poop in the boxes. We opened up the freezer and everything inside was covered in mold and boy did it stink! We paid like $450 because it was a big unit and it looked decent. We didn’t make any money at all.”

“The thing they don’t show you on TV are all the trash runs to the dump, having to pay to get rid of old TVs, box springs and mattresses, computers, etc.,” LeClair continued. “We put in a lot of time and money hauling all of this away.”

According to the Derry Transfer Station website, it costs $5 to get rid of a mattress or box springs, couches or stuffed chairs, $10 to get rid of a refrigerator or air conditioner, $15 for a 13- to 25-inch television or computer monitor and $25 for a 26-inch or larger TV or monitor.

These costs can add up, yet they often don’t outweigh the excitement of the risk.

“It is like gambling, but instead of getting more chips or money, you get ‘stuff’ and that is the addictive part because you never know what you’re going to get,” LeClair said. “It is like Christmas morning with every box you open.”

But this stuff belonged to someone else first. A storage unit that sold for $125 recently in Nashua was overflowing with children’s toys, a shadow of perhaps happier days. This is why there are some who believe storage auctions exploit other people’s hardships. Naturally, Manning is not one of those people.

“The sale is going to happen one way or the other,” Manning said. “If there was no third party the storage facility would make a $1 bid and then would throw most of the stuff away.”

Trying to avoid them

Storage auctions are not big business for the storage facilities and, in fact, most facility owners do not want them to happen. They notify the renters many times and the back rent can be paid up until the last minute. This was clear at that recent auction in Nashua, which was supposed to have 20 units but only 13 went to bid because the other seven were reclaimed. However, an auction is unavoidable if people don’t pay their bills.
“They’re trying to get rid of a person who is bleeding them and put in someone who can pay,” Manning said.
This is understandable business, yet it is something most storage facilities don’t like to promote. Manning said the news program Nightline contacted him for an interview on storage auctions but none of the facilities wanted to participate. This was validated by Joanne Fried, director of media and public relations for U-Haul International, who said her company does not participate in any television shows or newspaper articles.

“We are in the business of storing our customers’ goods, not selling them,” Fried said. “We don’t feel it is good for our customers to see their items being auctioned. It is not a good time for them when it comes to that point.”

Manning said regular buyers understand the delicate situation many people are going through and take pity. He said they collect personal items, like wedding photos or personal documents — items with no monetary but extreme sentimental value — and leave them at the storage facility to be returned to the rightful owner.
Unfortunately, the human heart is not always so pure. Sometimes reptilian characters are drawn to storage auctions. Most storage units must be bought in cash and cleared out within 48 hours, which doesn’t leave much of a paper trail. If an auction has an unusually large crowd, it can be difficult to pre-register everyone and accountability can be difficult, according to Cimma.

He said he attended an auction once in Connecticut and, when he peeked in, saw a checkbook inside a clear bin, stacked high with blank checks that included the woman’s home address.

“Identity theft can be a huge problem,” Cimma said. “It would be easy for a grifter to blow a grand on that unit knowing he could make it back and more in 24 hours. I think the auctions need to be regulated better. Someone shouldn’t be allowed to bid unless he pre-registered online. There are too many people not following the rules.”

This isn’t the only place corruption can rear its ugly head. Several seasoned buyers said that storage facilities must itemize each unit before they go to auction. This means someone knows what is inside. They said in Boston, not so much in New Hampshire, this information will be leaked to a buyer who may split the profits with the storage facility employee. Such accusations are difficult to verify.

“I know they do it,” said one old-time buyer, who like many people participating in the auctions did not want to give his name, “I know because I used to do it back in the ’70s. Made some good money back then.”

Tips to become a pro

Manning said Storage Wars nails many of the elements of storage auctions: the cast of characters, the animosity between rivals, people bidding just to drive up the price on a competitor. But there is a difference between the stock market and roulette. And that is Manning’s only knock on the show. Smart buyers set limits and make their money only over time and with discipline. Manning thinks the show glorifies the scores — the diamond in the rough — and undersells the hard work it takes to succeed.

But when you only have a few moments to look at a room cluttered with boxes, what skills can you really use? Turns out there is a strategic element involved and which units you’re attracted to depends a great deal on what you intend to do with the merchandise afterward.

For example, Brodrick sells everything online, so if a unit is stuffed full of furniture, he isn’t interested. When he looks into a storage unit he is quickly calculating how long it would take him to move the merchandise. Everyone is looking for precious metals, which have skyrocketed in value in recent years. The same goes for Cimma, although he isn’t afraid of larger items. As his full-time job is as a vocational school teacher, he knows a great deal about machines. So if there is an old motorcycle in a storage unit, he’s going to bid.

This brings up another distinction between veteran buyers and newbies: knowing what to do with the stuff once it is yours. For example, many people may see an old motorcycle and not know how to fix it or how to obtain a title to make it street-legal. Cimma does, and so it becomes more valuable once it is in his hands. Of course, a storage unit with a motorcycle may go for $1,000 or more. Since he is knowledgeable, sometimes Cimma brings cash with him that belongs to other buyers. If a good unit becomes available he will call them and look to split the profits. Cimma said people’s expectations have lowered during the recession and they’re only looking for 10 percent back on their investment. He said when he first began they would want to at least double what they paid.

“Like everything in the U.S., these shows are just glorifying something — in this case, these auctions,” Cimma said. “This is what our country has come to?”

Just like/not like on TV

Storage Wars is not a documentary but a television show whose primary purpose is to entertain. Yet, many people believe the reality in “reality television.” And because of this these shows have great influence over people’s decisions.

“What’s really sad,” Cimma said, “is that people are using their rent money or grocery money to buy a storage unit because they think they’re going to get rich, because that’s what the show shows.”
In defense of Storage Wars, there are many episodes when some of the characters come up empty-handed.

“There is still a good deal of naivety in terms of viewers at this point,” said Klenotic, the UNH-Manchester professor. “I don’t think people are necessarily thinking critically about reality television.”

“Reality television shows don’t necessarily portray themselves as exaggerated non-fiction,” Klenotic said. “But many have writers and are very formulaic.”

In Storage Wars, each episode begins with the characters arriving at an auction. Then there is the drama of the bidding war, followed by the characters looking through their units. Just as it seems like all is lost, they discover something of value. How much is it worth? Well, stay tuned after the commercial break. The show ends with a numerical tally showing who is the winner and loser of the day.

“It is like a soap opera,” Klenotic said.

The clear structure and low costs make these shows easy to produce. Production companies can create tons of shows and throw them against the wall and see which ones stick. While Original Productions has produced many hits, it also produces Verminators, Dog Brothers and Ocean Force: Panama City Beach. Even if these shows aren’t widely successful, they don’t really hurt the production company because they weren’t a huge investment to begin with.

As that auction in Nashua began at 2:30 p.m., at least 75 people marched out of the swirling winds and through a maze of doors inside the storage facility. As they shuffled along, hoping to find treasure amidst someone else’s junk, there was no glitz and glamour. There were no Hollywood cameras. Monty Hall did not pop out and ask what is behind door number one.

“The show builds up drama that is not always there,” Manning said.






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