As you know, we love the pawn industry. A few weeks ago, we presented and exhibited at the NPA Convention in Las Vegas I heard something very disturbing. I must have heard at least 200 owners talk about how they are not making money the way they used to in this industry. What is more disturbing is at least half of those, when asked why not, immediately responded” because gold is down from $1,856 at its highest to $1,230 an oz. now… It amazes me that so many of the people we spoke to had this as their main reason for down profits. I hate to be the bearer of bad news, but the price of gold is only one of the many challenges you face right now that is causing less profitability in your pawn shops than in years past.
In the past seven years, in addition to the price of gold going down to a more normal level, pawn shops have also faced many other challenges. Those challenges are things such as competition moving in that didn’t exist before, more savvy customers, online competitors cutting into retail sales, and banks and other institutions not loving us as much as they used to. Additionally, many of us decided to grow at this time and bought larger pawn shops or opened more locations and stretched our resources to the maximum. We assumed that the profits we were seeing would always be that good or better. I think most people find out the hard way the error in that thinking. This industry is constantly changing and we believe that it will continue to change drastically. So what can you do about it?
Great question. We believe in this industry, you need to be the best of what we used to do well back in the day, and incorporate all the new things that are happening around us in the world as well as anticipating the change that is to come. If we aren’t better than our competition and we are only being reactive, not proactive, to the changes going on around us, how can we ever be successful? Remember BlockBuster? Remember Macy’s? Those companies and concepts were once considered too big and too successful to fail. Let’s face it as good as we are we are not a Macy’s and we do not have the love and respect that they did.
At Devoted Business Development, we specialize in helping pawnbrokers make more money in just this manner. We will help you discover what is preventing you from making the money you used to help you create and execute a plan for success get you back on track. We like to say that problems create opportunities. The good news is that there isn’t anything in this industry that is unfixable. In fact, most challenges can be addressed easily with proper planning and execution. To find out more about what we do, please visit our website for more information or take our free Pawn Health Assessment.