Tips for setting up a container self-storage business

Self storage sites are becoming increasingly popular. With less and less storage space available in newly built houses and with many smaller industrial operations and offices needing to squeeze every penny from every square foot, self-storage using shipping containers has become a very attractive option both privately and as a business. Increasingly, individual who trade online e.g. on eBay, are also using shipping containers to store their products.

In this article we share some hints, tips and secrets that we’ve discovered from working with a lot of self storage operations over the years. So if you are thinking about setting up your own container self-storage business using shipping containers then please read on!

1. Self-storage is an excellent investment if you own land

Based on current costs and rental prices we estimate that buying a new 20ft shipping container and having it delivered to your site will cost you the first two years worth of rental income, after which for the remainder of the 10-20 year lifespan of the container it will nearly all be profit. In addition, at the end of this period the container can still be worth about half its original price if resold.

Most of our customers report that once their self-storage facility is established, whilst some customers come and go, they have never yet experienced any major dips in trade as those customers that do stop using them are easily replaced with new customers.

2. Choose your location carefully and check out the competition

Choosing a location with lots of passing trade is important. In particular, prominent locations may help you promote your business more quickly without having to spend a fortune on advertising.

Check out your local competition. Where else can people store their goods in your area? Are there other self-storage container operations? How much to they charge? Is your site closer, more visible or more convenient for the local population? If so you’re probably onto a winner!

Also consider who is going to use your facilities. For example, often areas with lots of new build houses are a good choice as new homeowners may be short on additional storage space. If you are near a lot of small industrial units or offices your customers may largely come from these guys. So take some time to investigate who your potential customers will be in your area.

3. Use new (one trip) shipping containers

10ft new containerUsing one trip shipping containers made from Corten steel ensures you have a product that will last 10-20 years with minimal maintenance. Using new containers ensures you have a nice clean appearance to your facility – very important if you don’t want to put off a large section of your potential market who might like a clean and tidy yard. It’s also worth mentioning that if you are already trading as an established business then new containers may be a lot easier to finance.

Note: You may be interested in a previous article we wrote on choosing a new, used or refurbished shipping container for storage use for some additional information.

4. Use one trusted supplier and range

There are actually many different ranges of 20ft shipping container, so for the cleanest appearance we strongly suggest you use a single range. This way, when you order your 2nd or 3rd batch of containers in the future, you know they will all come in the same shade of green or blue, have the locking bars in the same position, and the same number of vents in the same places etc…

Note: When working with us, we try our best to make it as clear as possible exactly what you getting, how often the stock refreshes and how competitive over time a specific supplier is. At times when one supplier may be out of stock or suffering delays receiving stock, few other traders have the scope that we do to get in replacements from different suppliers in near identical specs.

5.  Invest in good container padlocks

With our padlock range, we can have padlocks individually keyed and numbered with a master key system. Once we have your lock and key setup recorded we can add further individual padlocks at a later date making it much easier to buy in both containers and padlocks as you fill up. Adding numbered keys and the master key system will add approx. £10 to the price of your padlocks, or in percentage terms that’s about 0.05% onto the price of your container and padlock, but in terms of making your operation smoother and more efficient in the long-term it’s definitely worth it.

Some sites ask their customers to provide their own locks. This can work well for many, but it’s worth mentioning that if you need to get into your customer’s container for any reason (the police have a warrant?) then if you don’t own the lock the container itself will incur damage if you need to then break the lock and get into the shipping container (or the customer loses their keys) as you will need to cut off the lock box that shrouds the padlock from attack.

6. Use standing orders or direct debits for rentals

Plenty of our self storage customers tell us they have customers who either never visit their containers or rarely if ever store anything inside. Many smaller businesses may write the container storage off as an overhead and never again question it. Many individuals may just never get around to cancelling it. Automatic payments also mean you are not constantly chasing customers.

7. Consider condensation treatment for containers

damp stick in containerGrafo-Therm Container Condensation Treatment is very popular and prevents condensation from building up and dripping onto the goods stored inside. Containers will certainly be more attractive to rent with this treatment, and you may also be able to charge a little more for rental if it’s used.

However, we do need to mention that as using this treatment holds moisture against the inside of the container roof it can possibly shorten the overall lifespan of the container; although to be honest evidence of this is still scarce. If this is a concern then an alternative option would be our Bone-Dry Dampsticks, although this is an expensive option as a long-term solution. At the top end of the quality scale would be a full plywood lining, but this will add significantly to any outlay (whilst asking our yard to do Grafo-Therm treatment of a 20ft container will come in around £200, a good quality plywood lining and insulation can come in over £1000 per 20ft container).

We would expect that some customers will be prepared to pay slightly more for condensation treatments in their containers, and some self storage yards use the dampstick treatment setup to help generate ongoing additional sales.

8. Design the layout of your self-storage facility carefully

We recommend that you make a scale plan of your site and your containers and play around with the best way to set up your yard and use the space. Make sure people and vehicles can get in and out and that you’ve fitted in every possible container. This might take up a fair bit of time but it could save you considerable sums of time and money down the line.

In some cases you can use 20ft and 40ft tunnel containers in any ‘middle strips’ you may have on the site. These are slightly more expensive than their equivalent sized containers with a single end door, but a lot less than 2 half size containers. A 40ft tunnel container can also have a partition added inside to allow it to be used as 2 separate 20ft containers, and depending on your customers needs, this setup can give you the flexibility to offer 30ft and a 10ft container storage options.

You may be able to fill in any smaller spaces or corners with 10ft and 8ft containers, but be aware these cost a very similar price to the 20ft containers. Alternatively, we offer a range of ‘multi-bay’ storage units where we take a 40ft shipping container and split it into 8 compartments.

We do know of some self-storage facilities who have double stacked smaller containers on top of the base container to increase their storage capability. And, to ease access for their customers they’ve fitted a gantry/platform system with safety rails and steps for access to the upper containers. Whilst it might not be suitable for all, if you do have a forklift, you could lift your customers’ goods on to the upper deck and let them use a pallet truck etc. to move their goods to their container.

This looks like an ideal solution if your depot is full and you want to expand without taking the need to find an additional yard. However, the cost of the gantries may be expensive.

9. Keep it clean and tidy

A lot of your potential customers may be put off by a dirty, messy or untidy yard. Making sure you have a clean, welcoming and smart site is likely to attract more customers in the long run. We suggest focusing especially on the entranceway, any reception office and any signage.

Make sure all your containers are clean, well painted and presentable. If you do have some older used containers then keep them at the back of the yard and out of sight. It may be that you offer these as a budget option, but a lot layout will vary depending on the space available, ground rent costs and the local competition as to what would work best for you.

10. Think about the floor

20-foot-HC-tan-RAL-1001-shipping-container-006The vast majority of shipping containers come with an inch thick marine treated plywood floor. Some suppliers add varnish which helps protect the floor and makes it look smarter, although some self storage customers have commented that these surfaces get scratched very easily and thatt hey do not want varnished floors. The container floor can also get stained over time if anything with oil is being stored. With replacement floor panels costing upwards of £100 + VAT each and with minimum 5 floor panels per container, replacing the floor regularly is an expensive undertaking.

An alternative to the traditional plywood floor in a shipping container is to use eco-friendly bamboo flooring. As well as being kinder to the environment by utilising very fast growing bamboo, the flooring is also extremely tough as well as being non porous. Our recommendation would be that for a wide variety of self storage uses the bamboo flooring will win out on most occasions as the better long term flooring material to use.

Unfortunately at this time only a small percentage of shipping containers are being built with bamboo, so availability at the time of any order may dictate what option is best for you.

11. Don’t buy containers direct from China

While it may sound like a good idea to cut out the ‘middleman’, when it comes to buying shipping containers it’s the middlemen that do a lot of work sourcing and quality checking the containers to cover a lot of risks for you without you needing to worry about you investment going astray.

Firstly, the minimum factory order will be for 100 units. Firstly, you will likely have to pay the full cost of the order in advance, which is about 3 months before anything arrives in the UK.  Do you really know this outfit in China that you will be sending US$200-400k? That’s the sort of value order where people may well be trying to con you, and trust us when we say we do see this happen far too often.

Let’s assume your order is dispatched without hiccup, they 3rd party freight gets loaded and shipped without a problem, they clear customers in the UK without fuss and get delivered to the customer and returned to your depot without any delays. But of the 100 you ordered only 92 arrive as 8 have gone astray and been delivered by mistake to someone else possibly in another country. In addition, some of the 92 you have received have dinks, dents or even worse – some major damage.

A heavily damaged container won’t be of use to you, and you can’t order just one more container as the factory will have a minimum order of 100 units. You may not even be able to move the damaged container out of the port without specialised transport for unstable loads, and if you leave it in the port you’ll get hit with anything up to £60 per day per container in storage charges. You may be waiting 6-9 months for the containers that were mistakenly shipped elsewhere to be returned to you

Essentially, if you know what you are doing you have a fair to good chance of your job going fine, but also a small chance it will turn into a nightmare. The less you know of the process the higher the risk that you may encounter issues or that someone may take advantage, so we genuinely believe you are better off spending a little more buying from container stocks in the UK. There’s no waiting, no currency speculation, very limited risk, and in many cases you can even go and view the containers in person prior to purchase.

This guide is far from the gospel on how to run your own container self-storage business. We have seen many people take different routes to the ones we suggest and still do well. In our view these are the main considerations that most new yard owners may want to know about. We hope you have found these tips for setting up a self-storage business useful but still have some questions please contact us.

Here at Budget Shipping Containers we supply containers to a large number of self storage yards across the UK. Whilst price is always a consideration we also take pride in our transparency and we look to build up long term relationships with our self storage yard customers. Please feel free to contact us if you would like a quote for a new setup or if you have an existing operation let us know what containers you have (or who you buy from now) and we can look to try to source in identical units for you. You can also browse our online catalogue to get an idea of the ranges and options available.

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