We are constantly asked how do pawn shops determine what to pay for stuff or how much to loan on an item. Before we can determine what to pay for something or loan on it we first have to determine what the item is worth. The truth is that there are several sources to determine the true market value for an item. The source or sources we use depends upon what type of merchandise we are dealing with. Jewelry, firearms or electronics each of these very different items require the use of a different source of information. We thought we might put a post together giving some information on how we go about it. We will divide this up over a series of posts at least two and possibly three.
Part I
Back in the day if you were going to be a successful Pawnbroker you had to have a well rounded knowledge about many different types of items. Things are much different today because like every other industry in the world the internet has changed everything. Now there is no need to be an expert on the value of everything. You can find whatever information you want on the internet. You just have to know where to look.
Electronics, Tools and General Merchandise
Well no real shock here, the best source for the value of one of these types items is eBay. Many people walk into our shop and say well this item I need a loan on is selling for $400.00 on eBay and I need to get a $200.00 loan. Well on the surface that probably seems reasonable, but is it?
Most people go to eBay and enter in the name of their item or a description and check out the items that come up look at the prices and think wow look what they are selling for. I should be able to get what I need no problem. This is the first of several mistakes. The prices that come up on eBay when you do a search is not what people are paying. These prices are what people are asking or what a current auction is at that moment in time. What we need to look at is not what these items are selling for but what people are actually paying for them.
Fortunately, eBay makes this very easy for us. Over on the left hand side of your browser window is a whole series of check boxes. These are there to “refine” your search the one we are looking for says sold items. You want to check that box to see what this particular item actually sold for. If you are using an app on a smart phone or tablet you may have to do some digging to find the option to look at sold items, it is in there somewhere, usually under the search refinement options.
Once you are looking at sold items you can then begin to look at other factors. Condition is always important, do you have the original box and/or paperwork? If it's a TV or DVD player do you have the original remote? If it is a notebook or tablet computer do you have the charger? How clean is the item? All of these factors effect the final value of the item.
The general idea is to find something as close to what you have as possible. This will give you an indication of what the item is really worth. You also want multiple examples, that way you can see what the item constantly brings. If you find five examples and one sold for $350.00 and the others all sold around 150.00 you can't really expect to get a $200.00 loan.
This is just one example of how pawn shops determining the value of certain types of merchandise. So the next time you are heading to the pawn shop to sell something or get a loan, before you go, do some research yourself. This way your will have an idea of what the item you're bring in is really worth. While this won't tell you what the pawn shop might pay or lend you, it will let them know that you've done your homework and know the value of your merchandise.
Typically, the pawn shop is going to offer about 1/3 to 1/2 of the average selling price you might find on eBay. There are a number of reasons for this and the person behind the counter should be willing and able to explain in detail why they are making you the offer that they are. If what you're hearing from them doesn't go along with the research you've done or make sense to you then be polite and move on to another store.
Our next post will be about firearms and how you can determine market value for them.
Part I
Back in the day if you were going to be a successful Pawnbroker you had to have a well rounded knowledge about many different types of items. Things are much different today because like every other industry in the world the internet has changed everything. Now there is no need to be an expert on the value of everything. You can find whatever information you want on the internet. You just have to know where to look.
Electronics, Tools and General Merchandise
Well no real shock here, the best source for the value of one of these types items is eBay. Many people walk into our shop and say well this item I need a loan on is selling for $400.00 on eBay and I need to get a $200.00 loan. Well on the surface that probably seems reasonable, but is it?
Most people go to eBay and enter in the name of their item or a description and check out the items that come up look at the prices and think wow look what they are selling for. I should be able to get what I need no problem. This is the first of several mistakes. The prices that come up on eBay when you do a search is not what people are paying. These prices are what people are asking or what a current auction is at that moment in time. What we need to look at is not what these items are selling for but what people are actually paying for them.
Fortunately, eBay makes this very easy for us. Over on the left hand side of your browser window is a whole series of check boxes. These are there to “refine” your search the one we are looking for says sold items. You want to check that box to see what this particular item actually sold for. If you are using an app on a smart phone or tablet you may have to do some digging to find the option to look at sold items, it is in there somewhere, usually under the search refinement options.
Once you are looking at sold items you can then begin to look at other factors. Condition is always important, do you have the original box and/or paperwork? If it's a TV or DVD player do you have the original remote? If it is a notebook or tablet computer do you have the charger? How clean is the item? All of these factors effect the final value of the item.
The general idea is to find something as close to what you have as possible. This will give you an indication of what the item is really worth. You also want multiple examples, that way you can see what the item constantly brings. If you find five examples and one sold for $350.00 and the others all sold around 150.00 you can't really expect to get a $200.00 loan.
This is just one example of how pawn shops determining the value of certain types of merchandise. So the next time you are heading to the pawn shop to sell something or get a loan, before you go, do some research yourself. This way your will have an idea of what the item you're bring in is really worth. While this won't tell you what the pawn shop might pay or lend you, it will let them know that you've done your homework and know the value of your merchandise.
Typically, the pawn shop is going to offer about 1/3 to 1/2 of the average selling price you might find on eBay. There are a number of reasons for this and the person behind the counter should be willing and able to explain in detail why they are making you the offer that they are. If what you're hearing from them doesn't go along with the research you've done or make sense to you then be polite and move on to another store.
Our next post will be about firearms and how you can determine market value for them.
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