How to make money from pawn shops reddit

No «Sales Numbers» post without a full write up. Screenshots and photos only will be immediately deleted. If your post is asking about what to do about an item take-down request or legal notice, we’ll remove it. Follow the advice. Complete Beginners Guide to Ebay. Beginner’s guide to flipping books with FBA. Flipping Central Discord Server. Discussion I wanna open a pawn shop. As the title states, i «want» to open a pawn shop.

No «Sales Numbers» post without a full write up. Screenshots and photos only will be immediately deleted. If your post is asking about what to do about an item take-down request or legal notice, we’ll remove it. Follow the advice. Complete Beginners Guide to Ebay. Beginner’s guide to flipping books with FBA. Flipping Central Discord Server. Discussion Any success at Pawn Shops? I have been thinking about checking out pawn shops near me but don’t even know if it’s worth my time. Anyone have any good stories from them? I can usually get into things super cheap and flip them really quick for a pretty big mark up. We have a very good network of people and very rarely do I have to resort to putting an item online.

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I thought you could be ebaying the pawned stuff and it benefits the shop in general. Thanks. Slim pickins. I’m sure some have had more success, but I’ve only ever found a handful of things worth flipping from pawn shops. They are resellers, after all. Some prices are good, some are horrible. I have had how to make money from pawn shops reddit luck with one near me that has TONS of dvds.

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Make sure to read the rules! This subreddit is for asking for objective explanations. It is not a repository for any question you may have. LI5 means friendly, simplified and layperson-accessible explanations — not responses aimed at literal five-year-olds. Perform a keyword search, you may find good explanations in past threads. You should also consider looking for your question in the FAQ. Economics ELI5: How do pawn shops work?

Pawnshops make money by providing personal loans, reselling retail items and offering auxiliary services, such as money transfers or cellphone activation. Earning interest on loans and profits on retail sales are the principal income sources for the standard business model for a pawnshop. The first revenue source for a pawnshop is income derived from making loans and earning interest on the loan balances.

A pawnshop makes a loan to an individual who turns over custody of an item, such as a television or a computer, that serves as collateral for the loan. The amount a pawn shop is willing to lend is based primarily on the value of the item, but it can also be substantially affected by the pawnshop’s current inventory at the time of the loan. For example, if a person is looking to borrow money using a television as collateral and the pawnshop’s inventory is already overflowing with similar televisions, it will generally offer to lend considerably less money than if it were low on inventory for televisions.

Pawnshops make loans at substantially higher interest rates than banks typically charge for personal loans. The risk of loan default is much higher, and many individuals seeking loans from pawnshop cannot qualify for traditional bank loans. State law governs the amount of interest that a pawnshop is allowed to charge, and regulations vary widely from state to state. Loans are generally made on a monthly or day basis. By the end of the month, to avoid forfeiting the property he has put up as collateral, the individual must either pay back the loan in full, plus the interest charge or simply pay the monthly interest charge, which allows him to extend the loan for another month.

Pawnshops are generally willing to extend loans indefinitely as long as the interest is being paid, as they may eventually collect more in interest charges than the amount of the loan itself, while still holding the loan collateral against default. The pawnshop owner also has to factor in potential costs of storage, cleaning, repair, and advertising, as well as covering general overhead expenses. The second primary source income for a pawnshop is retail sales. Merchandise includes items that the pawnshop has purchased outright from individuals and items that were pledged as collateral by loan customers who then subsequently defaulted on their loans, thereby forfeiting the pledged collateral property to the pawnshop.

Items that the shop eventually acquires through loan defaults may offer them higher or lower profits in the end, depending on the items and the length of time the loans were carried prior to default.

If a loan was maintained for a lengthy period of time, the pawnshop may have already made a profit just from collecting the interest payments made prior to default. However, the length of time may also mean that the item has deteriorated in value to the point where it has little or no resale value.

Pawnshops commonly supplement their income by offering auxiliary services for which the shops charge fees. Typical extra services offered by pawnshops include check cashing, cell phone activation, Western Union or other money transfer services, and bill payment services.

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Compare Investment Accounts. The offers that appear in this table are from partnerships from which Investopedia receives compensation. Related Articles. Partner Links. Related Terms Collateral Definition Collateral is an asset that a lender accepts as security for extending a loan.

If the borrower defaults, then the lender may seize the collateral. The Inner Workings of Asset-Based Lending Asset-based lending is the business of loaning money with an agreement that is secured by collateral that can be seized if the loan is unpaid.

Hard Money Loan Definition A hard money loan is a short-term loan based chiefly on the value of the property used as collateral and not creditworthiness. Personal Interest Personal interest is interest that individuals pay on personal and consumer loans. Some types of personal interest are tax-deductible. Understanding Credit Facilities A credit facility is a type of loan made in a business or corporate finance context, such as revolving credit, term loans, and committed facilities.

Pawn Shop Owners, What Useless/Worthless Things Do People Try To Sell? (r/AskReddit)

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