The pawn industry is a very lucrative business that has been helping people who need extra money for many years. Owning a pawn shop is a reliable way to earn a living because there will always be customers who need this services. However, pawning is not the only way that pawn shop owners earn a living. These are some of the different ways that pawn shops earn money.
Pawnbrokers allow customers to borrow money against various items such as jewelry, hunting gear, electronics, and musical equipment. The pawn shop holds the items and pays the customer a percentage of what the pawnbroker thinks he can sell the items for should the customer not come back to pick the item up.
The length of time a pawn shop holds a pawned item depends on what state the shop is located in. This is often between 30-90 days. A fee is charged for interest and holding the item in the shop. When the customer returns, he must pay the original loan amount plus the interest and holding fee to retrieve his item.
Buying and Reselling
If a customer has certain items of value that he no longer needs, he may be able to sell them to a pawn shop. If the pawnbroker thinks he can resell the item and make a good profit, he may buy the item straight out from the customer.
The pawnbroker will then place the item up for sale in his shop and price it for more than what he paid for it. Pawnbrokers also buy certain items at auctions for below retail value costs and resell those items at more profitable prices.
Even with the best of intentions, many customers cannot afford to pick up their items within the time frame they are given by the pawn shop. If the customer does not return to pay for and pick up his item by the deadline date, the pawn shop keeps the item and can resell it for any amount he chooses.
If you cannot afford to pay the full price of your pawned item when it is time to pick it up, many pawnbrokers will allow you to renew the contract for another month. This will require that the interest payment and the holding fee be paid at the time of the renewal.
Often pawn shops will allow you to do this for several months until you can pay the full price to retrieve the pawned item. With every month that the pawn shop holds you item, you will have to pay the interest and holding fee again to prevent the item from being sold.
Some pawn shops even do pawns with high dollar items such as automobiles, boats or motorcycles. Larger loans can be obtained against these items, but the fees are normally much higher as well. Contact a local pawn shop, such as Desert Jewelry Mart & Coins, for further assistance.