What is the good locker to average locker ratio?

This is an effort to DEBUNK the tv shows view of the storage auction business which is basically that
almost every locker holds valuable items. Each of the two series makes these assertions though Auction Hunters has a disclaimer (in print on screen, not verbalized) that the filmed segments represent the best of the hundreds of lockers they buy.

So, what is the ratio? Is it 1 in 1, 1 in 10, 1 in 20, 1 in 100 or 1 in ?

I realize that people will have different experiences with this, so you should probably indicate roughly how many you have bought to make your point valid.  In other words, if you've bought 1 and it was great, that's not much to go on. Likewise, if you've bought 1 and it was trash, that's not much to comment on either.

I've bought just short of 400 and my ratio would probably be about 1 in 50 as I can think of 8 super-deluxe lockers. Of course there is an entire range of "treasure to trash" values, so that complicates it too.

Anyway, I think you get the idea. It's just to give a ballpark idea.

Movieman,  Not to get off topic here but I would like to see one bit of additional info here as well. That would be that whatever your ratio is, has it caused your overall business to be profitable?

As you stated, success and treasure are relative terms...so for example with your ratio of 1 in 50

did you only break even on the 49 in between, double your money on average on the 49 or?

and on the 1 in 50 that you consider super deluxe, was it a 5X's your money return, 10X's or ?

I know I am in this game to make coin and to see a return on my investment in lockers so I am very interested in seeing the "success ratio" from an ROI perspective

Because if you even double your money, to me thats a winning locker?

 

TreasureHawk...all your questions are valid and fall into the - variables- I mentioned.
To design a fully scientific study of this question would involve a lot of time and categorizing and of course I'd rather be buying lockers and selling goods than doing that !

In brief though let's say that if I say I get a super-deluxe locker 1 in 50 times, it DOESN'T mean the other 49 are losers; it WOULD mean that maybe the bulk of those 49 would be AVERAGE. Or maybe 1 would be a total loser, 45 would be average and 3 would be break even.

Too many variables to consider in this short conversation and thread. Just looking to debunk the EVERY LOCKER IS A SUPER-DELUXE promoted by the TV shows.  

I have always aimed at 2x the money as the general guideline for success. Sure, 5x and 10X are nice and they fall into super-deluxe territory. Five times the money on a $50 locker is good, but 5x the money on a $1000 lkr is great !

Hope this answers some of your questions.

Thanks for the details!

So based on your "example" above ....where you say 45 of the lockers out of 50 are "average"

You consider average to be roughly a 2X's return on your money......

Not saying you exactly "double" your investment on all 45 but you do make "some" profit on all of the 45 and on many of them you do in fact see 2X's investment

Is this "fair" to say?

 

Thanks for the details!

So based on your "example" above ....where you say 45 of the lockers out of 50 are "average"

You consider average to be roughly a 2X's return on your money......

Not saying you exactly "double" your investment on all 45 but you do make "some" profit on all of the 45 and on many of them you do in fact see 2X's investment

Is this "fair" to say?  

Yes, I would say that is fair. I keep a running tab on expenses and income and the bottom line figure uses a formula to show the ROI.  For 2011 I am currently at 2.18x the money.  The best I did in the last 7 years (at year's end) was I think 2.68x the money. The worst (at year's end) was 1.99x the money. This factors in everything in the way of expenses and income. I also have individual tracking on each locker to see when it has cleared and how much ahead (or behind) it is.

Nice!

I'd say that is a successful business for sure!

If you don't mind me asking...In your "business expenses"

I'm sure you factor Fuel but do you have insurance on a truck factored in as well? Or a truck payment?

In addition, do you have a facility that you own or rent to sort and store items? OR do you pay to park your truck somewhere?   

I'm not at all trying to pry into your "personal" situation...just trying to model a successful business plan and be realistic about costs and profits

Thanks again!

If it's an expense it's accounted for.
If it's income it's accounted for.

Unlike the feds and most states, I don't spend more than I've got.

I understand....and thats good for you...haha....I'd love to be able to keep borrowing with a few trillion owed

But, I was trying to ascertain just how hearty your expenses are

do they include truck, facility, labor and the like  or is this more of a 1 man out of the trunk of his car in a spare bedroom kind of operation

I understand completely if you are not comfortable answering

I'm just trying to determine how "balls deep" I want to go from the start, while still have a shot at 2X's average profits   

I understand....and thats good for you...haha....I'd love to be able to keep borrowing with a few trillion owed
But, I was trying to ascertain just how hearty your expenses are
do they include truck, facility, labor and the like  or is this more of a 1 man out of the trunk of his car in a spare bedroom kind of operation

I understand completely if you are not comfortable answering

I'm just trying to determine how "balls deep" I want to go from the start, while still have a shot at 2X's average profits   

It's not that I'm uncomfortable answering, it's that it is not good business to answer those specific questions.
As to your situation, start out small...out of your bedroom ?....and then grow if it works for you, or give it up. Many will start out small and give it up.

And incidentally, I DO account for my time spent doing this. As I said if it's an expense it's accounted for.  The unaccounted for expense is the dedication, persistence and knowledge gained from experience.

Hey thanks for your insight!

I know starting "small" is the most prudent strategy and makes the most sense for most, but for me, after running a 7 person warehouse operation for so many years...I'm just not an "out of the bedroom" type of guy...haha

Not only because I don't want roaches, lice, bed bugs and rodents in my spare bedrooms, but I prefer to think of a business as a separate entity and desire to have all of the resources necessary in order to ensure it is a success and so that "giving up" isn't an option.

Being well enough capitalized to withstand some bad buys and noob mistakes at the onset will be paramount and staying persistent and consistent over the long haul will be absolutely necessary as well ....but the way I play the game, failure is not an option!

Hey thanks for your insight!

I know starting "small" is the most prudent strategy and makes the most sense for most, but for me, after running a 7 person warehouse operation for so many years...I'm just not an "out of the bedroom" type of guy...haha

Not only because I don't want roaches, lice, bed bugs and rodents in my spare bedrooms, but I prefer to think of a business as a separate entity and desire to have all of the resources necessary in order to ensure it is a success and so that "giving up" isn't an option.

Being well enough capitalized to withstand some bad buys and noob mistakes at the onset will be paramount and staying persistent and consistent over the long haul will be absolutely necessary as well ....but the way I play the game, failure is not an option!

You already have major expenses accounted for in your current facilities. This biz would be an adjunct or possible replacement.

Best way to see if it works for you is to just start and of course make reasonable decisions.

Failure certainly isn't an option, but of course we have to make changes in our plan as we go along. Nothing wrong with getting out of something if it isn't your cup of tea for whatever reason. Look at statistics on the "failure" rate of new businesses. Even big companies "fold" after 20 years. I don't consider that a failure nor is quitting after a few months or a few years a failure in my book.

Oh I agree with you on that 110%  when I say failure, I mean invest 20K into buying lockers...loose your ass and go running with your tail between your legs...haha

I agree that making reasonable decisions will be key and based on every thing I am reading and hearing, that I am going to have to attend a ****ton of auctions in order to find solid lockers at the right prices.

I was at one recently where some old guy (looked in his 70's) and could barely walk paid $1,100 for the biggest pile of **** in a locker I could have ever imagined seeing....LOL

I would not have been a buyer at $300 on that locker...you would have better odds in Vegas!

I asked him if he had labor to assist him with it and a truck or something and he gave me the "deer in the headlights" look  This was a week ago and hes still probably schlepping that **** around...

Based on that and other stuff like it, I don't know weather to laugh at these people or cry for them

I bought about 50 lockers in the last year

3 were super great one retuning over 100 times the investment

About 10 made about double the investment

About 20 broke even

About 7 lost my butt on.

Overall made a little for the year

My experience so far -

1. Break even on all lockers, haven't lost yet (but eventually I will I'm sure)
2. 1 in 4 - I double plus.
3. 1 in 18 - I make 5 times the money on average.
4. 1 in 53 - is a grand slam ten times plus the money.

Thats taken from my spreadsheets (see my other posts) so its as accurate as I can be....................

On the last 10 units (memphis) i have done.

2 lost money. ( including costs like dump fee and hauling)
1 has was brake even
2 has double my money
2 has tripple my money
3 has 5 times or more on my investment.

Last 10 units i got in Knoxville

1 lost money
1 was brake even
1 was double my investment
rest of them is around 8-10 times my investment.


From buying around 140-150 units i have only had 2 that has been super duper crazy good ( like you see on tv )

Best locker ever was in Knoxville, where i got one for $395.00 and when all was sold i had 8000.00 in total sales. But the best part about it was that everything sold within 3 weeks. Normally things is slower then that.