How does the pawn business model work?
Unlike other retail business models pawn shops offer two services rather than one. However, the pawn shop model is still a simple one and offers customers a unique service that no other business can. Pawnshop services include both a retail store and lending services.
Pawnbrokers discriminate against no one no matter which service you need. A pawnbroker’s retail service is on previously owned goods. Unlike other secondhand stores pawnbrokers purchase the merchandise rather than relying on donations. This means you are getting higher quality goods that have been carefully picked over by a qualified and knowledgeable buyer.
You are looking for higher end items in a pawn shop including diamond jewelry and luxury watches. Pawnbrokers offer sellers prices that allow them to mark the price up only slightly to buyers and remain well below retail prices.
The bulk of a pawnbrokers business is in collateral lending. Pawnbrokers offer small dollar loans that help customers get cash quickly. You don’t need good credit. In fact, all you need is collateral. When you take out a pawn loan the loan is backed by the value of your collateral and the pawnbroker does not care whether or not you have good credit. These two services are simple, straightforward and unique in the world of retail and lending. Pawnshops offer consumers low prices and a safety net in times of emergency.