How do you start a pawn shop?

if I were starting a clothing store, I’d find some clothing supplier? But what about a pawn shop? Things from the attic, garage?

Some start out by having a well advertised event and/or offering slightly less usurious than normal interest rates to get an inventory built up. I also imagine the sorts who would go into the pawnbrokering buisness would be wheeler dealer types who would have at least some miscellaneous junk lying around.

A new pawnshop opened around here not to long ago and for the first few weeks it was indeed pretty empty. In general, though, pawnshops often don’t have a lot of inventory or their inventory will fluctuate a lot. Around here, the older established ones act more like antique stores and are usually full (including stuff that’s been there for decades), but the newer ones out by all the big box stores are often pretty empty. I think this is because they focus more on the financial aspect of it and so more people actually repay their loans and reclaim their stuff. Since the actual selling of stuff is only a sideline for them, it doesn’t really matter if their inventory gets low.

What state are you in?

There are legal requirements for pawn shops in most states and some require licenses because of the loans and fact that many people want to pawn hot merchandise. My family used to own one and it is a hassle. You have to deal with the absolute scum of the earth who can’t manage even their simplest of finances or who want to steal from anyone to get the next crack rock. You don’t see many pawn shops in nice areas for a reason. You have to deal with paperwork and police inspections for stolen merchandise as well. If you loaned money for something hot, it sucks to be a pawn broker. You just have to turn it over and you get nothing.

The flip-side is that you get to sell inferior merchandise to the same brand of really dumb people for greatly inflated prices once someone forfeits their loan (see Rent-A-Center for a business model). However, you can make money at if you flunked the used car salesman ethics test and want a second chance.

I’ve gotten really good deals in pawn shops (as a retail customer, never as a loan-seeker). And then, there are things that are over-priced. And then, there are things that are kind of a wash.

My favorite pawn shop finds: high-quality power tools at just under craigs-list prices, without the hassle of running all over the tri-county area.

[QUOTE=Shagnasty;12774763If you loaned money for something hot, it sucks to be a pawn broker. You just have to turn it over and you get nothing.

There have been a lot of threads on this site, to indicate just the opposite. If you’re stolen stuff is at a pawn shop it’s quite difficult to get it back.

Both of them may be true. It is possible that it can be fairly difficult to prove that the stuff is stolen, but if it is, then you do indeed need to hand over the stuff with no recourse. Still sucks when it’s not your fault. But I could be wrong :slight_smile: