A pawnshop is a store that lends money in exchange of a valuable item that they can sell if the owner leaving it does not pay the agreed amount of money on time
A pawnshop is also called a pawn broker
Services offered
They offer personal loans
They resell items in case the loanee doesn’t pay back in time
They also perform money transfers
Activation of phones
How pawn shops make money
Basically, pawnshops brokers make money in a very simple way. They earn interest from the loans they offer and also from the sales they make on the retail goods. Those are the two major sources of income for the business
Items that are commonly pawned
Pawn brokers accept anything that is valuable but of course, there are those items that are pawned most. They include;
Television sets
Jewelry (whether gold or diamond)
Electronics
Household items
While some lenders may pawn huge items that are of high value, most of them offer small loans
Advantages of pawn shops
They are a good option for those who need a small amount of cash
Pawn shops do not have to follow up much on the loan payment because they already have the items to sell. Therefore, the loaner needs to be careful so as to repay the loan on time and take back their property
It does not require any special skill or knowhow apart from capital and the ability to deduce the possible profit that can be made from the retail items
Disadvantages
The main disadvantage is actually about the high interest rates. The rates per month may seem okay but from the annual point of view, the interest rates are almost at 100%
A few things that many people don’t know that they can be pawned
Power tools such as;
- Garden forks
- Rakes
- Shovels
- Garden hoes
- Blowers
- Edger’s
- Trimmers
- Pressure washer
- Hand gloves
- Lawn mower
- Chainsaw
- Logging tools
- Table saw
- Circular saw
- Miter saw
- Jig saw
- Compressor
- Die grinder
- Router
- Circular saw
- Table saw
Camping gears
Handmade items such as
- Painting
- Woodwork
- Crafts
Collectibles
Pet supplies
Hunting equipment
Items that pawn shops don’t buy
- Refrigeration
- Baseball cards
- Jordan shoes
- Pearls
- Dresser
- Motorcycle helmet
- Old phones
- Crutches
- Alternator
- Basketball cars
- Mirror
- Hospital bed
- Desktop computer
Mistakes to avoid at a pawn shop
you should ensure that you research about the price of the item you are going to surrender at the pawn shop so that you do not give away an expensive thing for less money in return
Conclusion
Pawn shops are the best place to visit and solve your agent financial needs. But you should only opt for it only if you have done enough research about how various shops work