What You Need to Know Before Opening a Pawn Shop
The popular new television series, "Pawn Stars" is a very entertaining reality show about a family owned and operated Pawn Shop business. Pawn Stars is not far from the truth, if at all, as to what takes place in the operation of a Pawn Shop. The one exaggeration might be all the very interesting and valuable artifacts brought into the pawn shop to be pawned or sold. Fact is, for the most part, many of the items may not be all that interesting, and at first glance, may not appear to have any value.
Other items brought in for pawn may appear interesting and valuable, but in reality, may not have any real pawn value. And that's what we're talking about: Pawn Value. First and foremost you must know value, that is re-sale value, on just about everything anybody could own in your area of business. From TV's to Diamond rings to construction tools, and everything else that can either be brought into the shop or parked in your lot. You will have to know how to look through a loop and determine the 4- Cs' of a diamond. Before you can give a price you must know the Carat size; the Color; the Clarity, and the Cut. You must know, almost at a glance real from fake Gold, and also know how to scratch and conduct an acid test for further analysis.
You have to know value because it's vital that you're fair in all your dealings. Successful Pawn Shops have a solid customer base. Customers come back if treated fairly. You cannot be so tough in your dealings that everyone who walks through your door gets taken advantage of, because that would be easy to do. Many folks go to Pawn Shops as a last resort, they need money quickly. Be fair and the customer will be back again and again. And the customer will also be back to take advantage of the bargains, pawn shops are known for, in the retail section of the shop. You also don't want to overpay. If you do, it becomes a retail item. The retail arm of the business is a business born out of necessity because the primary business of a Pawn Shop is loaning money at a high interest rate with the property as Collateral.
Loaning money is regulated and there are laws that you must obey, and procedures you must follow in order to loan money. As a Pawn Shop you will have a close working relationship with Law Enforcement. Every item taken into the shop whether for sale or pawn has to have a history with it including picture identification of the individual pawning or selling the property. Be prepared to be in court at times to testify against individuals police are prosecuting for selling the shop stolen property.
You must use common sense whenever buying property. If the deal is too good and it many be stolen, you also may be prosecuted. As a Pawn Shop owner you are an expert in what you buy. If what you buy amounts to a deal that could only be so if the item were stolen, even if you are not aware of the theft - you deal, and maybe go to jail. Yes the Pawn Shop business can be full of many traps, and it takes an individual with a lot of savvy in many areas of business. If that's you, then get into the Pawn Shop business now because it just may be the brightest star in this gloomy economy.