Tips for Broadening Your Profit Horizon: Self-Storage Talk Members Share Secrets of Add-On Sales
|Copyright 2014 by Virgo Publishing.|
|Posted on: 08/26/2011|
By John Carlisle
Even though renting space is the core of the self-storage business, operators are always looking for ways to enhance their revenue through additional product and service offerings. Because self-storage is closely tied to moving, packing and shipping, certain retail items such as boxes or packing materials are logical items to sell in a facility office. Likewise, partnering with a provider to sell tenant insurance can also net extra income for the business.
But one the best ways to brainstorm ideas for ancillary products and services is to talk it over with industry peers, which is exactly what people have been doing on Self-Storage Talk (SST), the industry’s largest online community.
On the SST discussion threads “Top-Selling Side Product,” “Which Add-On Product Is Most Effective at Your Facility?” and “Which Add-On Profit Center Generates the Most Revenue?,” members have bandied around several ideas, sharing what sells and what doesn’t. Respondents have also weighed in on multiple polls to give their take on the issues.
In an Inside Self-Storage online poll conducted in August, 44 percent said locks were their best-selling retail item, an unsurprising result. Thirty-two percent cited boxes and crates as their best-selling add-on, while moving kits garnered 8 percent and tape/adhesive snagged only 2 percent. In a similar SST poll, the results varied slightly (50 percent and 38 percent), but locks and boxes were still No. 1 and No. 2 respectively, with nothing else gaining notable attention. The reason locks are top of mind? Possibly because they’re the only retail item some facilities have onsite to sell.
“Apart from locks, we don't sell much of anything else,” writes SST member DeeStorageUK, who works at a facility in Rochdale, England, near Manchester. “Apart from making a point of asking customers if they need any of the products, what else do people do to get those sales up?” she asks. It’s a great question. Just how can managers upsell, and what sort of items are logical suggestions?
Member and moderator Bob Taylor, also known as astro, manages a facility in Cashiers, N.C. He shared these strategies: “Tell everyone you talk to on the phone and who walks in your store that you sell boxes and other packing supplies. Be absolutely sure to [tell this to] everyone who rents a space.
“Have bundles of boxes and packing supplies at a discounted price on display in your office. Example: several small boxes, a few medium, a couple of large, tape, bubble wrap. Tie a ribbon around this bundle and offer it at, say, 10 percent off of retail, and promote the dickens out of it.
Do you have a reader board out front? Can you get one of those inflatable box displays to put on your lawn? Can you advertise in your local paper? If so, promote boxes and other packing supplies.”
Beyond Locks and Boxes
One natural business pairing with self-storage is moving-truck rental. Self-storage tenants are often are in transition, moving from place to place, and have a temporary need for a truck. Some facilities have started to use trucks as loss leaders, throw-ins to coax new business. Yet results from an ISS online poll many show facilities are still making money off truck rental.
When asked with add-on profit center generates the most revenue for their facility, 61 percent of respondents cited rental trucks. Cell-phone towers came in at about 18 percent, while business services (faxing, copying, scanning, etc.) came in with approximately 5 percent. “Other” picked up nearly 13 percent, proof that many facilities have unique, niche ways of generating side cash.
A regular SST poster and long-time facility manager, Lisa T, indirectly spoke to the benefit of business services via offering shipping services. “Here, our biggest profit center by far is UPS shipping—not only the UPS fees themselves, but all the boxes and packaging materials we sell to the customers so they can pack their stuff up to ship it; and best of all, it's not nearly as much work or aggravation as truck rentals.” Because most run-of-the-mill consumers, including Joe Storage Tenant, aren’t familiar with UPS drop-off points, a self-storage facility is a logical place to do that, especially if it’s closer and less expensive the nearest UPS store.
SST member FHARumRunner echoes the effectiveness of locks, boxes and tape but adds mattress and furniture covers to the mix. Member JamestownStorage#8 agrees with selling covers, also pointing to wardrobe covers and a product called Damp Rid, a mineral salt that absorbs moisture and prevents mold and mildew.
Other less common revenue-boosting ideas mentioned on the forum include selling advertising space, especially on unit doors that face the street or on billboards; eBay sales; and opening self-storage combination businesses, where entities such as car washes or golf driving ranges are part of the facility. In an increasingly competitive environment, operators will turn to whatever resource to get ideas on how to diversify.