A Closer Look at the Retail Aspect of Your Self Storage Facility
When it comes to self storage, most people think of the basic service: providing units for people to store their extra belongings. However, that’s just part of the business model. Facilities also make a good deal of their income from what are called add-on services. In self storage, that means storage supplies you sell in your main office. In other words, the retail side of your business.
When you order supplies from a wholesaler, look carefully at the prices. Usually you can get more for your money by ordering in bulk. In other words, the more boxes, locks, tape roles, and so on that you order at once, the less they cost per unit. This can be prohibitively expensive for a small self storage company. For that reason, you may want to consider joining the storelocal co-op, which allows smaller, independent self storage facilities to save money on retail products.
When people are at your facility, they’re thinking about self storage. It’s much easier for them to purchase their supplies at your office than to drive to another store where the prices may or may not be less.Basically, you’re in a great position to sell them what they need. After someone has rented a unit, you can ask if they’ve packed yet, and point out the different supplies you offer. When you carry storage boxes made for specific functions, such as those for packing books, those for drinking glasses, and so on, you can point out how much safer they will keep your tenants’ possessions. In short, you don’t have to be sales-y to sell moving and storage supplies to your customers.
Keep Incomes Separate
This may sound obvious to many, but it bears mentioning. When keeping track of where your business revenues come from, keep rental and retail separate. Also, keep track of how much specific items sell. You can determine what sells best, which can help with future orders. You may also want to keep different types of income separate on your company taxes.
Once you have the retail side of your business running, with supplies displayed proudly, get the news out. Update your website with information about the products you have available. You may want to add “moving supplies available” on the sign outside the property. Offer coupons or other discounts on certain materials.
Yearly Income and NOI
How much can you expect the retail side of your self storage business to bring in? That depends on how many new tenants store with you over a given period of time, and how much each spends on storage supplies, minus how much you paid for the supplies.
Let’s say you get 30 new customers per month, each of which spends an average of $20 on supplies. Those items cost you $10. That’s $10 per customer times 30, or $300 per month. Over a year, that’s 12 times more, or $3,600 in profit.
That may not sound like a lot, and you may wonder if it’s worth the trouble of adding retail sales to your business. Consider this. Customers are more likely to rent a unit with you if you also sell the supplies they need. They’ll see that your business offers the convenience of boxes, packing material, locks, and more, and will know that they don’t have to get those items elsewhere.
Also, most self storage facilities these days sell all the supplies their customers need. If your facility doesn’t, it won’t appear as professional to people, no matter how great your security, climate control, and ease-of-access.That extra profit also increases your facility’s net operating income (NOI). The higher the NOI, the more valuable your facility is. If you ever sell the facility, that slight increase in NOI can mean a big increase in what you get for your business.
With the right sales touch, you may be able to sell much more on average as well. Over all, adding retail sales to your facility will increase its value, help bring in customers, and increase your revenue. In short, you really can’t afford not to have a retail side to your business.