A pawn shop is an establishment that primarily offers secure loans with personal valuables taken as collateral. Aside from the ability to pawn off items, an interested individual can also sell items of value to pawn shops. While you may see one or two on your way to work or head around town, there may be a chance that you won’t be seeing them in the near future.
Surveys done have reported that the number of pawn shops have been dwindling over the years. This can be due to a number of factors such as easy access to other loan options. Just like all other businesses in history, everything has to evolve – including the humble pawn shop. Here are some things to consider when discussing what the future may hold for pawn shops in general.
Surveys show that there has been a steady decline in loans being taken in pawn shops. However, this is inversely proportional to the amount of sales being done. This is because more and more people have been going to pawn shops recently with intent to sell instead of getting loans. While this may seem detrimental to the business at first, especially because pawn shops initially exist for pawning, this shift in the business paradigm pushes pawn shops more towards the retail side of things.
Having these pawn shops lean more towards retail gives them a unique advantage over other retail establishments – inventory diversity. Unlike other retail stores that typically cater to selling a specific line or category of products, it is expected that pawn shops carry a wide array of items in their inventory. From jewelry, to technology, and even firearms, pawn shops attract a certain demographic.
In the 21st century, pawn shops have generated a specific appeal – a different one than it used to have. In this modern age, pawn shops are great places to sell jewelry. Most pawn shop brokers are trained in evaluating jewelry and precious metals, making the sale of these valuables quite profitable to both pawn shop and customer alike. Furthermore, pawn shops are usually willing to purchase these valuables, regardless of condition – especially gold. Regardless of condition, the weight of gold remains valuable by itself.
Speaking of jewelry, pawn shops are great places to browse pre-owned jewelry. Either a person wasn’t able to pay their loan or someone directly sold it to the pawn shop, these pre-owned pieces of jewelry are sold much more affordably compared to brand new versions of the same items. Buying pre-owned jewelry makes sense because these items are usually easy to restore and polish to look brand new, without having to pay for the premium of owning it brand new.
Another appeal of pawn shops to today’s market is the ease and speed in making a transaction. Pawn shops generally accept to buy almost anything from customers as long as the items have value. This makes pawn shops a convenient source for quick money. While it is true that you might be able to get a better deal using an online marketplace, there is no guarantee when a sale can be made through that platform.
One of the greatest challenges of pawn shops in the 21st century is competing with online marketplaces as a venue for selling items. One appeal of pawn shops back then was the fact that you could take mostly any item of value that you have and probably be able to sell it to a pawn shop for an appropriate price.
This practice has become challenged by the fact that people can conveniently sell their items online from the comfort of their home.
Fortunately, pawn shops are able to survive by using the same online marketplaces to make profits. These pawn shops have also been using these platforms (e.g., Ebay, Facebook Marketplace etc.) to sell wares from their inventory.
Utilizing Online Platforms
In this modern age, utilizing online platforms has already become such a prerequisite to a successful business. Unfortunately, not enough pawn shops are grabbing this opportunity to maximize their effectiveness.
A survey reported that in 2017, 84% of pawn shop owners used Facebook. While this is a good step, it is essentially one of the first steps of several. These days, having a social media account is not enough. A successful business would have an active account – this means that the account posts regularly and interacts with people using the platform. An active account would be able to generate leads (potential customers) more effectively this way.
Furthermore, Facebook is only one of many social media platforms available today. It is suggested that the demographics actually differ from one social media platform to another. This means that having accounts in multiple social media platforms (e.g., Twitter, Instagram, etc.) would be akin to casting a wider net.
The same survey also reported that more than 25% of those pawn shop owners did not operate an official store website. This is also an important aspect of the modern business model as a website can be seen as a form of legitimacy to potential customers, creating a trust between them and the shop.
Just like the social media account, it has to be effective as well. The store website is more effective when it is functional by today’s standards. This means that the website should have features that people expect from official store websites nowadays (e.g., message portal, inventory catalog, online purchasing, etc.).
While it may seem that the advances in today’s lifestyle and culture would create hindrances for the survival of pawn shops, the evidence shows that pawn shops can indeed exist in the future – especially if they adapt and make the necessary changes to remain relevant. There are still portions of the population that would rather go to a physical pawn shop than get a deal through an online platform, and pawn shops themselves are embracing the technology.