In the Pawn Shop: General VS. Specialty Stores

In The Pawn Shop_General VS Specialty_Header

I’ve been asked many times, “Why do you carry all this stuff in your store”? I know they’re referring to what many would call “junk”—collectibles, clothing, kids’ toys, etc. I always answer the same way, “Because it makes me money and brings in a larger clientele”.

There’s a reason that people go to flea markets, resale stores, and Goodwill—they enjoy finding good deals on unique items. This secondary market has been estimated at $30–40 billion per year and is expected to double over the next few years. This is much larger than the pawn shop market share. Your retail clients want to see more of a variety on the shelves and in the cases when they take time out of their day to visit.

The more eclectic, unique items that I took, the more varied my clientele was and this allowed me more options to lend and/or sell. I have always been big proponent of keeping my aged inventory under 6 months, so I had to sell this “stuff” quickly. And we did. We used online auctions starting at 99¢ and let them run, had crazy weekend sales, etc. I truly believe, that in order to get to people’s treasures, you first have to take their junk. It worked for me, but others may like a different approach.

The “specialty store” is another story. Let me start by saying there is absolutely nothing wrong with running a store this way. In many cases, it has advantages. I know several brokers that like to keep a very neat, tidy, and unit specific store. They stick with what they know best and will turn away anything that doesn’t fit their store model. It simply makes their life easier. THIS WILL LIMIT YOUR TRAFFIC. Your door will not swing quite as much, but does it need to? Not if you’re one of the best at what you do and you can adapt. You can maximize your profit off what you carry, probably save on payroll, build a unit specific “go to” in your area, and ultimately streamline your cash flow.

Then we have what I call the “Specialty Superstore”. An owner may have started with this “unit specific” model in mind, but more often than not, their surrounding community, their passion for particular products, drive the business this way. We all have broker friends that started out with a small pawn shop taking all sorts of merchandise, and five years later they’re running the largest firearm, music, or jewelry specific store in their area. It happens and when it happens naturally, it can be a very profitable venture. And when you’re one of the best around, your traffic will not be limited.

The beauty of this business is that it can be run many different ways and they can all provide success. I believe the important thing is to stay alert with what is going on around you and adapt as needed. Don’t be afraid to “look around the corner” and be the change that is coming…it can be very profitable. The pawn business needs this type of leadership. Set out to be GREAT everyday no matter what role you play.