They call him the Wholesaler...

[BBush]

I have a friend that was the manager of a pawn shop for a number of years. He told me the first question that they are going to ask the person that wants to pawn an item is...what do you need for it? He is wanting the person to say a value that is lower than what he is wanting to pay. He told me that the absolute most that he would loan it 10% of the value. What this means is the if the value of a gun is $500, the most that he would loan is $50 and no more. There was no exceptions to this unless there was some item that he specifically wanted and he may go a little over that, but not by much. This would explain how a "wholesaler" could come in and buy the entire inventory of used guns for a great deal and the wholesaler and pawn dealer are both happy. The pawn dealer could "triple his money" for instance and get thirty or even forty percent of their worth and the "wholesaler" is getting a good deal on them and he could even double his money with ease at the gun show.

 

[Double Naught Spy]

I have a friend that was the manager of a pawn shop for a number of years. He told me the first question that they are going to ask the person that wants to pawn an item is...what do you need for it? He is wanting the person to say a value that is lower than what he is wanting to pay.

There is a lot of reasons for this. First, if you can make the person happy on THEIR terms, the transaction goes a whole lot better. The pawn industry is a service industry, first, sales, second. So you want the customer to feel good about the deal and if they call the shots (and it fits what the broker is willing to loan) then everybody is happy.

Second, there is generally more money, quicker profit, and more repeat business from the pawn side of the transaction than trying to selling.

Third, generally speaking, you want to make a loan on an item not a purchase. If you loan too much, you may be making what turns out to be a long term purchase (taking much longer for the property to belong to the pawn shop than via a flat out purchase). This is because you may end up loaning more than the person can or is willing to pay back for that item.

Say you loan $50 on a deer rifle. The customer doesn't want to lose his deer rifle for a measly $50. He will definitely try to get it back. You loan him $350 on that $500 deer rifle and customer then may decide that he doesn't need it so much anymore. After all, it was only worth $500 and his $350 plus interest might be better spent on other things right now.

Fourth, customers that pick up their pawns are more apt to be return customers in the future than customers who lose items.

The real money, day in and day out, is in the repeat pawn aspect of the business.