Business might be on the rise again, but it can always be better. Here are some options for other profit centres in self-storage.
Self-storage is a growing market, and profits for businesses are increasing accordingly. However, what some self-storage operators don’t realise is that there are a wide variety of ways to increase revenue that aren’t just classic rental and related administrative services.
Look At What Works
Before trying to provide other add-ons, make sure you’ve thought about how the new services will integrate into your existing business and the pros and cons of the services. Make sure your company has enough time and resources to make the investment in another service, and ensure that they will be easy to integrate alongside your existing products. Further things to note are that you should make your new product just as good as your base service so that it doesn’t seem like an afterthought, but rather a well-thought-out product that benefits your consumer.
Additional Self-Storage Revenue Options
While your main service will remain unit rentals, here are some other avenues to explore if you’re looking to diversify your revenue stream.
The first thing most self-storage companies do to expand and diversify their revenue streams is offer packaging supplies to their customers such as boxes, locks, bubble wrap, mattress bags, etc. These can be displayed and stocked at the entrance of your facility or in your management office. Make sure you source high-quality supplies, as your brand's reputation depends on how good your actual product is. You should also be getting the boxes and other supplies printed with your branding which helps build brand awareness in and outside your facility. Consider offering packages of a few different-sized boxes with tape and bubble wrap included to make it an easy sell.
A major new trend in the self-storage industry is the inclusion of a valet storage service. This means your customers don’t have to travel to the self-storage facility. Instead, the customer’s items are collected, categorised, and stored by the valet storage operator, providing a hassle-free storage service for the end client. The client can then manage their stored inventory online, add photos to what they are storing and order back items on demand when needed. While already a growing subsector, valet storage has seen a sharp increase since the coronavirus pandemic, with social distancing measures in place and many avoiding contaminated or densely-packed areas. Customers have proven that they will pay a little extra for a lot less stress, and a valet storage option fits perfectly in your model for extra services. On top of that, it helps maximise space utilisation at your facilities and broadens the geographical reach your storage business has.
Trucks and removal services
Another logical additional service to include is removal services or truck rentals. If living through the pandemic has taught us anything, it’s that a service that gives a stress-free and contact-free experience is something that customers will always gravitate towards. There are two main options here: launching your own service or partnering with a local moving service. While partnering is generally cheaper, you will be relying on the partner to ensure that the customer experience they provide is in line with your own brand’s customer service levels and you run the risk that if they don’t perform as expected it can be damaging to your business. Launching your own service is more expensive, having to include startup costs, vehicle maintenance, and staffing needs. But you are able to control all aspects of business, add to your overall brand as a full-service solution and all the revenue stays in-house. If you decide to run your own vans and trucks, get them wrapped in your brand with an eye-catching design to get free advertising while they are on the road.
Specialty storage options
The growing market for self-storage means customers will start to want more services when storing particular items. Climate-controlled storage is increasing in popularity rapidly, with items like wine, old antiques, electrical appliances and much more being suitable for this type of specialty storage. If you foresee strong demand for wine storage, consider also equipping some smaller units with wine racks specifically for wine enthusiasts. Changing the sizes of your leasable units also opens the avenues for a more niche customer base that might just want to store a small number of items. For the most part, including these options will require an initial expense, but generally are a good investment.
Cost v. Revenue
As mentioned in all the options listed above, these expansions of your service will always require an initial expense, and it’s up to you to find the most suitable allocation of your financial resources. To keep costs down, make sure to shop around and find the best deal if you’re outsourcing your products, such as packaging supplies or removal services. Another option to consider when buying external packing supplies is to try getting a small batch first to see how customers react. If it goes well, you can then buy in bulk or pursue a longer commitment.
Ancillary profit is always great for your business. Not only does it improve your bottom line, but diversifying the revenue streams also makes your business more stable. As we’ve seen over the course of this year, anything can happen.
Related Article: 10 Metrics Every Self-Storage Business Owner Should Be Tracking