Online Auctions: Click, Bid, Collect

For many operators, online auctions have emerged as a smarter, more efficient way to deal with bad debt from defaulting customers and abandoned goods.

In the 2024/25 financial year alone, self storage auction platform iBidOnStorage hosted over 8,000 auctions, helping operators recover more than $2.5 million in bad debt. “That’s real money going back into the hands of operators who would otherwise be writing off these losses,” said IbidOnStorage’s Brennan McLoughlin.

The way operators dispose of goods from defaulting customers has changed significantly over the past 10 to 15 years. Previously, many operators relied on second-hand dealers or local auction houses, others tried platforms like eBay or Gumtree, and some simply discarded the goods altogether. Today, the process is far more streamlined with solutions that are tech-enabled and customer-friendly.

So, what’s the formula for a successful online auction? According to Brennan, it all starts with transparency. “Buyers may be influenced by shows like Storage Wars, with dramatic finds in unopened units, but that’s not reality,” he explained. “Clear descriptions and honest photos of the unit contents build trust with buyers. Low opening bids attract more attention and allow the market to determine fair value – reducing risk for the seller.”

While most on the platform operate ethically, there have been rare instances where sellers or buyers have tried to exploit the system by misleading buyers or misrepresenting goods.

Here are the top three complaints from buyers and how to avoid them:

1. Misrepresentation of goods – Examples include stacking empty boxes at the front to obscure rubbish, hiding damaged items, or failing to disclose issues such as mould or water damage. “Always be honest with how you are presenting the unit. Even though buyers are purchasing “job lots” in a second-hand market, this doesn’t give sellers license to deceive,” Brennan said.
2. Lack of clarity about the origin of the items – Implying goods belong to a defaulting customer when they are business-owned or a collection of abandoned items. To avoid misunderstandings, it’s important to be clear about the origin of the items. While 99% of listings involve goods from defaulting customers, the remaining percentage come from storage businesses selling their own equipment or items left behind by multiple former customers. These sales are allowed – but transparency is key.
3. Cancelling the sale after the auction has closed and payment taken – Sellers sometimes find themselves unable to remove a listing in time, especially if a buyer pays after hours. While iBidOnStorage does allow for this in certain circumstances, sellers must also consider any out-of-pocket expenses a buyer may have incurred when trying to collect the goods. This clause helps protect buyers under unfair contract laws, and ensures sellers act in good faith if they need to withdraw a sale.

Auction Dos and Don’ts

DO’S:

1. Be honest – it’s important to be transparent about what you’re selling. Don’t try to disguise or exaggerate the contents of the unit.
2. Inventory everything – Ensure you’ve thoroughly inventoried all the items in the unit before listing. Clear documentation will help avoid confusion.
3. Take high quality photos – Take clear, detailed photos of the unit. Include an image with the door open, so buyers know exactly what to expect.
4. Be transparent about the contents – Be upfront about what’s in the unit – the good, the bad and the ugly. If it’s a mixed lot, with items from different sources or random leftovers, make that clear.
5. Address buyer issues directly – As the seller, you’re the first point of contact. If a buyer raises concerns, respond promptly and try to resolve the issue before escalating it to the platform.

DON’TS:

1. Don’t use brand names unless verified – Avoid naming specific brands unless you can prove authenticity (e.g. with a certificate).
2. Don’t remove items after posting – If there are personal items that aren’t for sale, remove them from the unit before listing it, not when the buyer arrives.
3. Don’t discuss unit history – Respect privacy. Never share personal details about the previous tenant or the backstory of the unit with buyers.
4. Don’t comment on sale price – Refrain from commenting on how much the buyer paid (e.g. “We can’t believe someone paid that much!”). Let the sale speak for itself.
5. Don’t sell prohibited goods – Make sure you’re not listing any prohibited items and always comply with regulations.