Selling your diamond to a Pawn Shop
When people talk about Pawn Shops, the idea that comes to mind is a small, shady shop that deals in lending out small amounts of money in the form of loan. The most important feature being very low requirements of credit history as pawnshops usually lend money based on collateral – which can be in the form of any item from watches to jewelry items.
However, some of you may be surprised to know that pawnshops do purchases as well. For example, if you need some extra cash and looking to sell your diamond ring you can go to a pawnshop and get some extra income by selling it to the owner – without the red tape that is.
Benefits of ‘Selling’ over ‘Pawning’
Many would agree that selling could be a better option than pawning your item at a pawn shop. There could be many reasons for this, but some of the important ones are highlighted below:
- When you pawn an item, the pawnbroker is more concerned whether you will be able to return the borrowed amount. Hence the pawnshop owner may offer you a lesser value for the item in order to mitigate the risk of a default. On the other hand, if you are selling your item the pawnshop owner will not have to deal with the hassle of collecting their money back from you. Hence they may be able to give you a higher price for it.
- When pawning your item, you are bound to return the money and hence have to worry about your future cash flow to repay the loan you have taken from the pawnbroker. On the other hand, when you sell your item to a pawn shop you have no other liability towards the pawnbroker. You can then focus your energy on making the best use of your money that you have earned through selling your item.
- When you sell an item you are relieving yourself from unwanted inventory creating space for newer purchases and getting rid of an item that you genuinely do not require any more.
Why sell your Diamonds to a Pawnbroker
Although many of us would believe that jewelry stores are the best place to sell diamonds, people are sometimes surprised when they get a higher price at the pawn shop for the same diamond that they were about to sell to a jewelry store.
The reason behind the effective pricing at the pawnshop is that jewelry stores will purchase your diamond in order to sell it to a walking customer. However, if the jewelry design they bought from is proving difficult to sell they may have to hold it for a certain period of time.
On the other hand, pawnshops may offer you a higher value because of the options they have of reselling that jewelry. The first option that they have is to sell it to a walk-in customer and the second being to sell it to another jewelry store. It is quite common for jewelry stores for entering in such trades with pawnshops rather than with other jewelry stores.
Steps in selling diamond at a pawnshop
Now that you know the benefits of selling rather than pawning at a pawn shop, you can work on how to get the best deal out of your sale. Below are some steps that you can follow to complete your homework before you take your item to the pawnshop.
It is very important to do your own research before you enter the pawnshop.
- Visit a couple of jewelry stores to find out the current price and trends in the jewelry market. This will give you an idea of how much your diamond is currently worth in terms of price and demand.
- You can also visit an online website such as eBay & PawnGuru to see how much people are bidding on items such as yours. This will give you a fair idea of what to expect from the buyer at the pawnshop.
Determine how much money you need
You should have a fair idea of how much cash you currently need. This helps you identify the assets that you wish to sell if you have more than one diamond jewelry that you wish to sell. The best bet would be to earn the maximum value from the items you do not need anymore and save the ones that you will need for future use.
Look for the perfect pawnshop
- You should have a fair idea about the pawnshops in your area and should select the pawnshop that suits your needs best. For example, there could be a pawnshop near you that deals mostly with items other than jewelry. Selling to such shops may not provide you with the right price you are looking for.
- Read online reviews of how people rate those pawnshops in terms of how flexible they are in terms of price and negotiation.
Negotiating the best price
Once you have done your homework you are in a good shape to negotiate the right price for your asset. You should appear confident in your product and have a strong pitch in order to sell it to the pawnshop owner. You should convince the pawnshop owner about the demand and resale value of your item as that is the main concern that they would have while buying it from you.
Many suggest that ‘Diamonds are a woman’s best friend’. However, sometimes it is all about how much cash it can generate. The article above highlights few important steps in gaining maximum value while selling your diamond at a pawnshop. If you have done your homework right and prepared a good pitch you might be surprised as to how much you can earn from selling your diamond at a pawn shop.