selling at a pawnshop.
April 26, 2011 1:25am CST
Has anyone tried to sell things or valuable at a pawnshop. I went to a pawnshop yesterday to try and sell my bracelet. I bought my bracelet for about 10,000 pesos and i thought i would want to have money to pay another debt. The pawnshop lady told me my bracelet was only worth 5,000. Is that really how they work, to purchase your valuables at half the price?
26 Apr 11
well its usually like that. But there are some pawnshop that will sell it near the original price but have a higher interest and depends on the valuable is. That is why the pawnshop business is really booming. But you need a big capital for it though.
28 Apr 11
Well you need at least a capital of 10m php a good auctioneer partnership( or make your own or something) and ofcourse a good reputation. Pawnshops are more reliable than loaning money because you have something tangible if the seller does not commit or runs away. But the only problem is how to sell the stuff.
• United States
30 Apr 11
I'm not sure of how it works in general but when I had started school, I did not have enough money to cover my tuition even with loans so I had to pawn a gold ring my aunt gave me for a birthday. It was made of solid gold and the money that I got for it definitely did not seem to be enough to cover the worth.
• Cambridge, England
26 Apr 11
You can usually reckon that, if you sell something to a shop, you will get only half or less than half of what you paid for it. It doesn't matter whether it's a pawn shop or a second-hand dealer. A pawn shop is really just a second-hand dealer who, in addition, lends money (at interest) on valuables. They will lend, usually, up to half of the new price and when you redeem the article, you will pay off the loan plus interest (usually at quite a high rate). When you buy something new, you have to remember that the price you pay is NOT the price that the shop will have paid for the article. They have to make a profit (that is what they are in business for) and so do the people who made the article in the first place. Especially in the jewellery trade, profit margins are quite high and (depending on where you are) they may have to add a sales tax as well, so what you pay is always considerably more than the wholesale value of the item and, if it is precious metal or gemstones, much more than the actual value of the metal and gems. That is the way it works and what you accept to pay in order to have something pretty to wear! In the case of jewellery, especially old jewellery, the value to a dealer is only the scrap value of the metal and the gemstones because many older items are no longer fashionable and will not sell. Although gold and silver are generally a good investment because the price of metal is always rising, you will always have paid more than the actual value of the metal (because someone had to make it and someone had to make a profit selling it to you). Over time, however, the value of the metal will rise so that the article may be worth more than you originally paid. If you only bought the bracelet relatively recently, then you did quite well to be offered half of what you paid for it. The pawn shop would probably expect to sell it for something like 8,000 pesos because their customers would expect to find a bargain and wouldn't buy it if they could go round the corner and buy one new for 10,000!. Out of that 3,000 pesos profit, however, the shop will have to pay for the rent of the shop, the wages of the staff and, effectively, the interest on the capital they have spent while the item remains unsold - maybe a month, maybe a year - (they could have put the money in a bank and earned interest instead of buying the item from you). They may also have to pay a sales tax. All of these things are a normal part of running a business, so try to understand that they are not ripping you off at all: that is the way that business works!