January 30, 2020 - Pawn Resources
Like all businesses, a pawn shop will try to make a profit on the sale, so they make sure that they understand the value of the product they purchase. Pawn shops determine the value of a product in a number of ways and they mostly rely on research and experience to set the right price tag. This is how they largely determine the value of items:
Experienced pawn brokers are always aware of the market values of certain products. They know the current values of regular products like gold, silver, precious stones, watches, musical instruments, etc. and can set the pawn shop prices based on just experience and industry knowledge.
They don’t need to consult specialized files or databases in such cases. Of course, if something truly unique comes along, they’ll adjust the price accordingly. For example, an antique gold ring worn by a famous person would be worth more than its weight, simply because it’s an antique and unique. In such cases, the pawn brokers will research the merchandise and find the right price.
The pawn brokers will research unusual or rare items that they’re unfamiliar with. There are some online databases that provide information on rare books, stamps, prints, etc. Brokers will also use merchandise networks like eBay and Craigslist for information.
They’ll perform advanced search on eBay and look beyond the first few results to get the right information. Brokers actually look at eBay auction bid prices rather than the buy-it-now option as it gives them a clear idea of what the product is worth, in the buyer’s eyes. Brokers usually spend hours of research on rare and potentially valuable items before they decide on the pawn shop prices.
This doesn’t happen often because despite what’s shown on TV, experts on merchandise don’t just sit around the corner and appear whenever pawn brokers need help to determine the price of a product. However, there are some times that they do need an expert opinion.
For example, if a customer comes in with a firearm, or a painting, or even a vintage car, they need to get expert opinion on the value. In such cases, the pawn broker will call someone with the right expertise to help them determine the value.
Some merchandise doesn’t have traditional value, but has sentimental value. The value of such merchandise isn’t easy to establish. A book that’s autographed by the author might sell for exorbitant prices or be valueless based on who the author is. For example, a signed copy of J.R.R. Tolkien’s Lord of the Rings would be of immense value.
Similarly, a pawn broker will also consider personal sentimental value. If you want to pawn your mother’s earnings for some urgent cash, a pawn broker might offer a bigger amount because of the sentimental value. Smaller pawn shops usually do this for clients they’re familiar with.
David Stiebel is one of the cofounders of PawnGuru. David was educated at MIT, where he studied Math. He subsequently worked at Bain as a data scientist before starting PawnGuru in 2015. He started PawnGuru to build a better tool for pawn shops and consumers to connect.More Articles