This post originally appeared on the Louisiana Technology Park blog.
Entrepreneur Lonnie Bickford says that when he participated in a pilot program for an online auction for abandoned storage units a few years ago, he didn’t expect it to work very well. But when a person two hours away outbid local bidders in the first auction and followed through to pick up the merchandise, Bickford was intrigued. When it happened two more times, he saw an opportunity.
Bickford, who owns several storage facilities in Louisiana and Texas, started researching the space and found the existing auction sites weren’t meeting the needs of the industry. “There was no one with storage experience and none of the sites had functionalities that were specific to storage units,” he says. “They were like mini eBay sites, but that was not what we needed as storage people. We decided that we had to build our own platform and proprietary software from the ground up.”
The result was StorageAuctions.com, which launched in July 2016 and has grown significantly over the past two years to become a leader in the space, completing more than 1,000 auctions a month across 42 states.
Spotting an opportunity in a huge hassle
The U.S. self-storage industry has grown steadily over the past decade, climbing to more than 45,000 facilities generating $38 billion in annual revenue. Predictably, the number of abandoned units has jumped along with the industry boom, creating an industry on its own and a pop-culture phenomenon documented in the television show “Storage Wars.” By law if a customer abandons a storage unit, the facility’s owner must follow a lien process that ends with a mandatory auction.
While such auctions may sound like a financial boon, Bickford says they can actually be a burden on facility owners, creating messes that have to be cleaned up and requiring time and resources for managers to host the auctions on-site. “It’s just a disruption to the operation of the business,” he says.