Your funds are running low, and you are in dire need of money—ASAP. The payday loan wants a 400% annual interest rate. So what is left? You have a gold pocket watch from your great-grandfather Chester. What do you do?
You head out to your local Brisbane Pawnbrokers. You can pawn it for a loan or sell that gold pocket watch to the dealer for cash. Still, you take the same item to four different pawnshops, and the offers vary by a few hundred dollars.
Why? The fact is that everything you can pawn will be pawned from gold rings, electronic devices, luxury watches and more. The purchases, loans, and sales pawnbrokers make on most small items can add up to $6B per year.
Yet, not all offers are equally created. The fact is that your gold watch can bring you offers that differ up to 200%. But why? Typically all pawn shops work the same. You take your gold watch either as collateral or to sell.
The dealer examines your watch to offer you if taking a loan 40% to 70% of the resale value. So, if that watch costs $200, you may get $150 as an example. Hence, your watch is kept as collateral against the loan.
You get up to 90 days to pay it back with interest between 2% and 25% per month. After that, if you do not repay the money, your watch is sold for $150 plus profit to compensate for the lost money. Furthermore, you can also take the money offered and walk out the door without taking the loan.
So, your average pawn loan is about $150 with interest fees. Still, you can get more when selling your gold pocket watch without paying interest. Hence, you need not pay double the amount borrowed. Another reason you may get different offers, especially with loans, is that the interest rate varies from one to another.
Yet, seeing what comes through a pawn shop door is pretty amazing. You find people selling vintage firearms, rare guitars, Rolex watches, gold jewellery, coins, and more. But it all comes down to assessing the resale value of that item and if it will be easy to sell.
Hence, for this reason, the offers can differ from one pawn dealer to another when selling unique items like a designer watch or ring. For example, you can have a one-carat diamond with a resale value of $2,500.
You can visit up to four Brisbane Pawnbrokers, and your offer will look as follow. You can get an offer ranging from $900 up to $2000. But why is there so a considerable variance? It all comes down to the net profit margins, capital, and specialization.
Each pawnbroker has different profit margin goals; they operate at different liquidity levels and specialize in different items. For this reason, it helps to determine what the pawnshop specializes in before paying them a visit.
So, suppose you have gold jewellery, coins, or other precious metals you want to sell. In that case, it helps to go to a Brisbane pawnshop that specializes in precious metals compared to one with more knowledge about firearms.