By Jon Fesmire
Today’s self-storage facilities are much more than just a place for people to stash their stuff. Storage units have become an extension of many tenants’ homes and even their businesses.
Although renting space remains most operators’ main focus, there’s an opportunity to bring in more revenue and offer customers greater options through ancillary products and services. This article explores some of these profit centers.
Finding the Right Fit
An ancillary profit center allows a self-storage operator to sell products or services related to his primary business. Note that this “center” doesn’t have to be a separate location. In fact, most of the time, these products are sold right from a facility’s management office.
The first profit center that usually comes to mind is a retail store that offers moving and packing supplies such as boxes, bubble wrap, locks, mattress bags and packing tape. However, there are a host of other services that can complement a storage business. These include mailbox rental, propane sales and truck rental. You can also offer various types of specialty storage including records and wine storage.
It’s in the best interest of a self-storage business for its ancillary products to be of the highest quality. They may cost customers a bit more, but when tenants see how well the boxes hold up, how strong the locks are and so on, it will engender greater trust for your company.
So, why should tenants buy their supplies from your facility rather than shopping around? Simply put, convenience. It’s so much easier to get the things you need where you store your belongings, even if the prices are a little higher. Your customers could buy elsewhere, but that takes time. It’s often worth buying with you to avoid an extra trip.
Since your main business is ordinary self-storage units with or without climate control, other flavors of storage are often put under the ancillary-products umbrella. These include document, vehicle and wine storage. Your facility may have specific sections designated for one or more of these, or you may have separate facilities for each.
- Wine storage is just what it sounds like—units for storing wine. Few collectors are able to have a wine cellar, and this serves the same purpose. This storage requires specific climate and humidity controls as well as increased security measures. However, it can be lucrative in markets that have a demand for it.
- Record storage is specifically for storing business records and paperwork. To that end, the self-storage facility might also sell banker’s boxes, which are sturdy and made for storing files. Records storage also requires just the right sort of climate control.
- Vehicle storage is ideal for anyone who needs to store an RV, boat, trailer, jet ski, motorcycle or vintage car. This sort of storage ranges from gated parking lots to fully enclosed individual units for each vehicle. In northern states, you may see a surge in vehicle-storage rentals as people winterize their cars until spring.
Cost vs. Revenue
How can your business make the most from its ancillary sales? As with anything else, it’s a matter of calculating cost vs. revenue.
If your facility currently only offers standard storage, start by looking into the cost of offering moving and packing items. Shop around and find out how much less you might spend if you buy in bulk. Large self-storage businesses are able to purchase items for cheaper because they’re able to stock multiple locations. If you can do so, it’ll save money. Even a small retail store will offer customer convenience and bring in a new revenue stream. If you’re still unsure, consider adding just a few items to see how well they sell before purchasing a big order.
It also helps to keep an open mind when it comes to profit centers you might offer. Think about the needs of your community. Are you in an affluent area in wine country? Then wine storage could be a great business addition. Are you perhaps in a region with lots of recreational drives or bodies of water? Then you might add RV or boat storage to your business. A secure parking lot doesn’t have to cost much and could be the perfect addition to draw new customers.
Adding ancillary products can allow your self-storage business to thrive even when rentals are slow. Plus, customers like being able to get all their storage needs met in one place. Renting units will always be your first money-maker, but consider how these add-on products and services can bring in new profit.
Jon Fesmire is a copywriter at Storagefront.com and writes articles for the company’s blog, “The Renter’s Bent.” In 2011, he earned a Master of Fine Arts from Academy of Art University.