If so, can you give me some opinions of the business?

Opinions of your particular business.

Would you do it again?

Did you have your FFL for sales/transfers?

quote:

Originally posted by Edmond:
Did you have your FFL for sales/transfers?

You have to have a FFL if you're buying and selling guns as part of a business.

There's even a specific FFL for pawnbrokers, the 02 FFL.

quote:

Originally posted by RogueJSK:

quote:

Originally posted by Edmond:
Did you have your FFL for sales/transfers?

You have to have a FFL if you're buying and selling guns as part of a business.

There's even a specific FFL for pawnbrokers, the 02 FFL.

But you don't need to accept firearms to open a pawn shop so the FFL is not required for the pawn shop itself.


I worked part time as need for a good friend in his pawn shop. He had a FFL and we took guns in.
It was 20 years ago so I am sure the business has changed a lot since then.

It is a tough business to master (and he never did) since you have to be able to properly value anything that comes in the front door. Firearms, tools, electronics, lawn equipment, musical instruments, cameras, jewelry was the killer. There were books that helped and I am sure the internet is helpful now but the value of an item is ultimately set by what someone is willing to give you for it.

For example, you bring in a nice circular saw that is worth $100.00. At best we will offer you 25% of that on pawn because we expect to sell it at 50% of it's value. Except we have a shelf of 12 circular saws from $10.00 and up. the odds of someone picking up the $50.00 saw instead of one of the 6 $20.00 saws means that your $100.00 saw is really worth around half of that.

It is an inventory heavy business. along with the storage in back of all the items on pawn that you cannot sell yet, you have to have the front stocked with enough crap to keep the customers coming in to look around. You end up with things that will never sell which you have money tied up in.

It had a lot of paper work. Record keeping was a pain and copies of every pawn ticket had to be turned over to the police dept.

You are not a friendly neighborhood business that is a pillar of the community. The people who are trying to pawn items are in a bad place and want more money for their stuff then you are able to give them and the people who are buying want it cheaper then you are able to sell it for.

I saw enough of the business to know it is not something I would want to run. I also met owners of other pawn shops in the area and never cared much for most of them.

quote:

Originally posted by SpinZone:
But you don't need to accept firearms to open a pawn shop so the FFL is not required for the pawn shop itself.

True. But a large chunk of a pawn shop's business is usually with guns, especially in the South. So I'd be very surprised to come across a pawn shop that didn't deal in guns. (At least in gun-friendly states.)

I had a buddy who ran a pawn shop before he got burned out and sold his business. Guns were the biggest sellers in his store, especially once he started listing them on GunBroker, which allowed him to reach a larger customer base with his guns. All the other items relied on potential customers physically walking into his store.

Unless you really enjoy dealing with unwashed masses of the middle to lower end of the population, I wouldn't do it.

I would work in one for at least 6 months before deciding if you want to invest in one.
You'd learn more about the business and might even find a struggling business as an opportunity if you decided to go forward.
Buying a pawn shop at a discount.

quote:

I would work in one for at least 6 months before deciding if you want to invest in one.

Almost every job I had was for this specific reason. It's a great way to investigate potential opportunities without any monetary risk.

quote:

It is a tough business to master (and he never did) since you have to be able to properly value anything that comes in the front door. Firearms, tools, electronics, lawn equipment, musical instruments, cameras, jewelry was the killer.

Your money is made at the time you buy or loan money on it. Too much, and you're done.

When I worked in the pawn business I was their jewelry/coin guy. They had a few other guys that were professional musicians that handled the instruments. We all shared doing everything else. Guns/electronics/tools were pretty easy to figure out because we sold enough to know what they would bring.

The pawn business is no longer what it once was. Now that you have check cashing and payday advance options, many of your previous potential customers will use them instead.

This part may be different from state to state, but around here you have to meet minimum financial requirements, undergo background investigations, and jump through a few other hoops that other business owners don't have to.

I didn't find our customers to be the scourge of the earth. Probably no different than a group of people randomly plucked out of the local Walmart. I also believe that pawn shops served a valuable public service. There are people out there with truly horrible money management skills. Were it not for our loans, some of those people wouldn't have food to eat until their next pay check.

The guy I know who is very successful with a pawn shop is a pawn shop/bail bondsman combined. He does very well, and ironically, he says that the bail seekers are his most reliable customers. Go figure. He says he has a lot of frequent flyers who want to stay on his good side.

I don't know if the business made him this way, or if it is a prerequisite for the business, but his personal demeanor exudes "I'm a badass, don't mess with me."

A lot of pawn shops now use Ebay as a reference for pricing a lot of items customers bring in.

Pawn shops came to the area along with the casionos. They were here in a small way before, but many more at the present. A certain portion of the population do not qualify for markers.

On the other hand, the one large pawn shop here sells more guns than the big box stores. They have a good selection of firearms. If you find the right guy behind the counter it is a pleasant experience.

It is entertaining to watch the customers haggle with their old CDs and cheap jewelry.

My local pawn shop is the first place I go for guns or tools. It's run by a smart guy who prices appropriately. They also do my transfers for me. $20. Good people.

If you decide to get into the business do not hire anyone named Chumlee.

Perhaps the regulations by state vary but in Ohio you had to have a ridiculous cash reserve. I guess that makes sense because you are a lending institution. The consortium that I knew decided to pass.

quote:

Originally posted by RHINOWSO:
Unless you really enjoy dealing with unwashed masses of the middle to lower end of the population, I wouldn't do it.

I could definitely see that side of it. I mean, it seems it would be a place for people to go when they need cash and they don't have time to spare. Sort of like a quick sense of desperation.

quote:

Originally posted by satch:
A lot of pawn shops now use Ebay as a reference for pricing a lot of items customers bring in.

I've noticed that. I've also noticed that if they get in a higher end item, it will go on eBay, presumably to get them more money without dealing with tire kickers, rather than go into the shelf where it can sit for months before selling.

quote:

Originally posted by ArtieS:
My local pawn shop is the first place I go for guns or tools. It's run by a smart guy who prices appropriately. They also do my transfers for me. $20. Good people.

One of the guys in the same unit and I have been talking about doing something like this in a few years. He's in Tampa, though so I'm not sure how we would work this. He's great at appraising items, especially guns. He quit his job and sustains himself by buying from garage sales to sell on eBay. Much less stress for him and the pay cut wasn't much.

A pawnshop really just wants to loan money on collateral. That's the real business model. Selling the items flaked on isn't the prime reason.

quote:

Originally posted by braillediver:
A pawnshop really just wants to loan money on collateral. That's the real business model. Selling the items flaked on isn't the prime reason.

And a high percentage of their clientele are repeat customers, or regulars if you will. Pawning on Thursday and back to pick it up on Monday.

I have 2 family members who each owned a pawn shop.

Both made piles of money and retired very comfortably.

You'll need a lot of reserve cash for your personal and family use, as you may not draw profits out for awhile.

You'll need a lot of reserve cash on hand strictly dedicated to the business. You can NOT be out of cash when running a pawn shop. It's equally bad to not be able to loan when you're out of cash, as well as not having the cash on hand to jump on great bargains to purchase inventory to sell.

If you are interested you should go work in one for a full year before moving forward.

You'd be surprised what it costs just to open the door on the very first day, before even the very first customer walks in. Building rent, utilities set up, shelving, tables, benches, computers and software, safety and security, licensing, permits, possible bonding, etc etc etc. the list goes on.

Having said that, you can make a LOT of money.

This message has been edited. Last edited by: OKCGene,

just get a TV show to film it all to subsidize the losses