“Price is Always the Issue.” Brandi Passante
About two weeks ago I came across a show on A & E called Storage Wars. It is said that one man’s trash is another man’s treasure; or in the case of Storage Wars, one man’s repo is another man’s financial profit. Storage Wars on A & E displays the business of buying and selling storage lockers after the owners have defaulted on payments, and the storage lockers have been repossessed.
There are four regular personalities on the show Storage Wars and they are all in the business of buying storage lockers for different reasons. However, they all bid against each other on the same abandoned storage lockers in hopes of finding some hidden profitable treasures.
The business of Storage Wars
Dave is the veteran of Storage Wars. He owns a higher end Thrift Store in California that sells second hand jewellery, furs, and antiques. Dave’s business strategy on Storage Wars is to eliminate his competition by bidding on lockers that he doesn’t want just to increase the price for his competitors.
This makes other storage locker bidders spend their money quicker, which allows Dave to purchase his storage lockers at a lower price because his competitors have already spent all of their money. Dave once bought a storage locker for $275, not because he wanted it, just because he didn’t want someone else to have it. After rummaging through the contents of the storage locker he found a box full of precious rocks and sold them for $5000.
Darryl is also a veteran of Storage Wars; he is currently teaching the business of buying and selling storage lockers to his son. Storage Wars is about the win for Darryl; he is often in bidding wars with Dave, and as a result he often over pays for his storage lockers.
I don’t understand the financial side of continuous bidding. If we only want to pay $500 for a storage locker, why would we continue bidding and overpay for something just to win the bidding war? If I was Darryl, I would let Dave continue bidding to raise the price of the storage locker. Then at one point I would stop bidding, this would leave Dave with an overpriced storage locker full of items that he didn’t want. I would never overpay for something just to win a bidding war. Every single dollar that the bidders on Storage Wars overpay for a storage locker is a dollar less of potential profit.
The important thing to remember about Storage Wars is that these men are blind bidding on abandoned storage lockers. They have 5 minutes to examine the contents of the storage locker from outside, and they aren’t able to touch anything. Sometimes they find hidden treasures, and sometimes they find boxes full of trash. I saw an episode of Storage Wars when Dave paid $750 for a storage locker full of newspapers. It turns out that the newspapers were from the week that Elvis Presley died and the ending up being worth $60,000 to $90,000 USD.
Jarrod Schultz and Brandi Passante are a young married couple who own a lower end thrift and second hand store. They look for storage lockers filled with everyday household items such as furniture, appliances, and home decorations. Jarrod and Brandi are the rookies of Storage Wars and it shows in their bidding style.
Brandi manages their business, and Jarrod is responsible for bidding on storage lockers and finding items to fill the shelves in their store. They are in the storage locker business because that is what pays their bills. Brandi accompanies Jarrod on the storage locker bidding wars because Jarrod tends to get carried away and spend their rent money on unprofitable storage lockers. Brandi tags along and puts a bidding cap on each locker to make sure that Jarrod doesn’t overspend. This is the number one rule of business, don’t expand too fast, and don’t spend money before we make money.
5 Valuable Financial Lessons Learned From Storage Wars
- Don’t Be Pressured into Buying Anything. Spending money we don’t want to or need to is a big financial mistake.
- It’s Ok to Make Mistakes as Long as We Learn from Them. Never make the same (financial) mistake twice.
- Always Go With Your Gut It, Can Be Rewarding. They told us this in school when we are writing tests, always go with your first instinct. The same rule applies to our finances; if your gut tells you not to spend the money then don’t spend it.
- Know what you are Investing in before you Spend Money. These guys have to know about everything. I watched 4 episodes and saw everything from patio furniture to Levis jeans and old antique telephones to flare guns.
- It’s Smart to be Competitive but not Aggressive. Being too aggressive can be costly. It’s good for business to have a healthy competition but we have to be inancially smart. Remember, it’s always about the bottom line. At the end of the day, the profit has to be more than the cost.
Photo by Pink Moose