Teaching Econ 101 to pawnshops (rant)

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I don't expect pawnshops to know any more about guns that Wal*Mart, I understand that their primary business is loaning money and charging interest.

But if they're going to theoretically sell hocked goods, you'd think they would apply some basic common sense. It's frustrating because not only can I not get a good deal on a gun I want, they're actually hurting themselves by sitting on a product for months on end, losing potential interest every month.



Today's exchange:
MV: Greetings, I see that you have a 1963 Nigerian Service Revolver in .32 Longue, which has sat on your shelf for 12 months at $299. I have here a BRAND-NAME HERE 9mm, which I understand you frequently sell for $325. I will trade you this more valuable, and much more popular, pistol for your dust-collector.

Pawnshop: I can loan you $50 on it.

MV: I don't pawn. I'm offering to trade my pistol for yours.

PS: I'll give you $75 cash for it, you can use that $75 cash towards the $299 for that one other gun. I just need $224 more in cash from you.

MV: My gun will sell for more than your gun, and will be sold in a few weeks. Nobody in Austin wants that revolver, except me. If you trade me straight across, you will come out $25 ahead, and will get a return on your investment almost immediately, rather than in the nebulous future.

PS: Look, I need to make some profit on items I take in. I can sell the BRAND-NAME for maybe $350, I can't invest any more than $75 in it [yes, he literally said that]

MV: The guy who pawned the Nigerian got $100 from you, you're still making $250 profit from the customer who buys my BRAND-NAME HERE from you.

PS: Look, I need to make a profit on items, I can't give you market price.

MV: (bangs head against wall repeatedly)

Just had to vent a little...
 
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he needs the lesson?

because he won't do the deal you want?
he knows you want his gun that was first mistake.
might be better to sell your gun ftf and then just buy his
 
Sell the gun in the local paper for $300-$325

Take the $299 cash and give it to him and after the transfer goes through tell him "If you'd have taken my trade deal you could have easily sold the Ruger for $350 so you just cost yourself $50 so :neener: "
 
He wants cash. What's wrong with that? He knows he has at least one person who wants a Nigerian Service Revolver.

Why not run an ad in the classifieds, sell your Ruger P95 for $325, and buy the Nigerian Service Revolver?

Telling a man how he should deal is not usually the best way to strike a bargain.

I hate to break it to you, but pawn shop owners really don't scramble for a $25-50 dollar profit.

It looks to me like Ruger P95s sell NIB for $325. What makes you think you can get that on a used one? Here's another one.
 
I wandered into one of the local shops today, saw a hi-point 995. I'll keep the conversation theme going....

me: "how much for the hi-point??"
"225"
me: :uhoh: :uhoh:

maybe I'll go in in a month or so and offer 100
 
might work

guns are their least negotiable product. but get some other guys together make a group buy might work. i'd try 150 you got a chance
 
Best yet: stop wanting the revolver.

Wait a good year or so.

Come back and offer $50 for it.
 
Point by point:


@ Xavier: I just used "Ruger P95" as a generic example. You are correct, a used one is not worth $350 (though local pawnshops ask $399 for used). I have changed my initial post accordingly.


@Kenneth:
Pawn shops are smarter than you. Most are millionaires already.
They don't care.

Very true, BUT they make their money on loans, not on selling guns. A pawnshop knows more about loans than I'll ever learn, but I know more about guns and guitars than 90% of them. But they don't care about gear, they care about loans.


he knows you want his gun that was first mistake.

Well, at some point I do have to at least mention what I want. I can't just loiter for four hours until he points out the "Nigerian Service Revolver". I do make sure to look at the tools first, then the music gear, and then "idly notice" the gun selection and browse in a cursory manner. I look at a few other items, ask to see what I really want, and then fiddle with it in a vaguely bored manner.


Anyway, I will end up doing what most of the thread suggests: sell my "BRAND-NAME" at a gunshow on THR, hang onto the cash and wait them out a few months.


Most shops don't have good deals very often. The best deals I get from the shops near my house where I've established a casual acquaintanceship with the manager and staff. I poke my head in, and someone will say "Hey MV, we just got this Rossi .38Spl in. It's marked $150, if you got your own trigger lock and cash-money, it's $100 OTD to you." That works way better. Even buying three $100 guns a year makes me a "steady customer"

It just frustrates me to work with a shop that really isn't that interested in selling the things that I want. If they're cool, they'll sell it for Cost +20% just to get rid of it and get back to loaning money. If they're not cool, they let dozens of guns sit on the shelf at MSRP prices until a dealer comes and makes a bulk purchase at Cost +10%.

Overall lesson: loaning money is _way_ more profitable then selling guns. I understand that "payday loans" are even more profitable...

-MV
 
pawn shops around here sell "Heuer" watches for $300, but they are only $60 watches. Didn't become an expensive name till they merged with Tag and became Tag-Heuer.

People are buying them and the shops are rolling in dough. they probably take in Heuer watches for $20 and then sell them for $300.

Don't know about guns. Got turned off on the "watches" thing. Never been back.
 
It wouldn't surprise me that if you go back that Nigerian Service Revolver will have a $350 price tag on it. You are dealing with a pawnshop not a gun shop.
 
Same situation...

It's frustrating because not only can I not get a good deal on a gun I want, they're actually hurting themselves by sitting on a product for months on end, losing potential interest every month.

But with junkyards. This JY owner just will not budge on a price. He's a financial moron.

Guy has an 80's Chevy Dana 44 with flat top knuckles (I just want the knuckles but am willing to buy the whole axle)

also has an 89 Jeep Waggy Dana 44

multiple Toyota steering boxes and a Toyota T-100 rear axle.

His prices:
Chevy 44 $325
Jeep 44 $250
T-100 rear $250 (nuts)
Toyota steer box ea. $75
total $900

I offered:
$200
$150
$100
and to buy 5 boxes @$50
total $700

and he wouldnt take the offer. So he made $0.00. Went to the yard recently (which was nearly a year later) and everything I wanted was still there sitting in the dirt. :fire:

Then went back to the same yard for a Tacoma horn. A fawking horn. I ask, he says $25 Im like ok all I have is $20 on me, how bout $20 OTD??? His reply $25+tax! OMG! What an idiot.

Im like screw it Ill take it (I only have $20) so I whip out the VISA. He looks at me and says thats gonna be another 3% for using the credit card. :banghead: I threw it on the counter and left. Havent, and never will go back there.
 
There are two key concepts in establishing prices: a willing buyer and a willing seller.

And there's flat out no way to get past that. It takes two to tango. Some folks you just can't do business with, best bet is to figure that out early along and save yourself hassle. Example:

I wanted to get some Fiocchi low-recoil buckshot. I checked FiocchiUSA's web page, and lo and behold a Local Gun Emporium (also a pawn shop) was listed as a stocking dealer for Fiocchi shotshells. I placed a call to said Local Gun Emporium amd asked if they had the ammo I wanted in stock.

No. They didn't handle Fiocchi buckshot.

But you DO stock Fiocchi shotgun shells, sez I?

Oh yes, gots lots of Fiocchi shotgun shells, spokesperson (manager, not flunky, mind you) replies.

Would you order me a case of Fiocchi low- recoil buckshot?

No, we don't handle Fiocchi buckshot, I am told decisively.

So, even if I came by, and paid for a case in advance, you wouldn't order it for me?

Nope, we don't handle Fiocchi buckshot.

So I said a sincere "thank you" and ended the call. I have not subsequently called back there for anything. I have never darkened the door there since. And never will, life is too short and there are too many other people willing to do business elsewhere.

lpl/nc
 
But with junkyards. This JY owner just will not budge on a price. He's a financial moron.
Why must a seller be a moron because he has a firm price? Just because he didn't sell to you at a lower price?
 
MV: I don't pawn. I'm offering to trade my pistol for yours.
Maybe he is trying to nicely tell you he does not trade guns. Maybe he is trying to tell you that trading guns does not pay the light bill, regardless of any "profit" he would make. He is trying to say he wants cash. It is his option to request cash. If you went into a Burger King offering a Sony television for a value meal, they would probably say "Cash only Sir," regardless of their desire for the television.

Look at it this way. The pawn shop owner is not a gun guy. He knows what he gave for the Nigerian Service Revolver, and what he would like to get out of it. He does not know what it is worth. He does not know what your trade-in gun is worth, either. Nor does he care. He does know what he will give for your gun, and what he will ask for it later. He made an offer. The offer was unacceptable to you, and you made no counter offer. Because you took offense there was no meeting of the minds, and thus, no deal. He did not stop dealing, you did.

The only commodity that has an absolute value in the marketplace is cash. The pawn shop owner knows what $300 is worth, so he asks for $300. You are behind the eightball when you try to trade because you must convince someone your property is worth X amount of cash before you can deal. Your property simply may not be worth X amount to the other person. A trade requires that two different people must agree on the value of two different pieces of property. This is much less likely to happen than an agreement of the value of a single piece of property. Guns have no absolute value, and trying to trade them as though they do is foolhardy. The Blue Book does not list absolute values, but rather what particular firearms sold for on average, based on condition, a year or so prior to publication. Trying to subsitute a commodity for cash is what is hurting you in this deal. He wants cash. Get cash. Even if you offer 75% of his asking price, he will likely bite if it is in cash. Offering a commodity is not the same, regardless of what you, or the Blue Book says it is worth. Cash has liquidity. Commodities do not. That is economics.

There are good deals at some pawn shops, I find them frequently and blog on them. You do have to know how to deal though, and how to not get so wrapped up in the lost deal that you are unable to complete future deals. If you treat a pawn shop proprietor like a cheap borderline thief who fences stolen goods and rips off poor down and out people, you will never get the deal you want.

The very statement of "I don't pawn." is an insult. It's kind of like saying "My sweat doesn't stink." Everyone will pawn if they need quick money more than the property they own, especially if they are unable to sell the property outright fast enough. Only by the grace of God, you have never had to pawn your property. Pawn shops provide a service. They are not sharks. Buying customers like you and me insure that pawn shops can continue to provide a service to those in need. Without willing buyers, a pawn shop cannot loan money on commodities. A pawn shop is the only place a construction worker can turn his tools into cash quickly to feed his family when the work runs out. A pawn shop is the only place hurricane evacuees can turn property into cash to make a down payment on a home and start a new life. A pawn shop is the only place an abused woman can sell a piece of jewelry and buy a bus ticket out of town for herself and her kids. Pawn shops help people in need when nobody else will. Adjust your perceptions of the man you are dealing with, and you will stand a better chance in the deal next time. Nobody wants to deal with someone who is condescending, not you, and not the pawn shop owner.

I know you want to vent your frustration a bit, and that is OK. No problem. Do learn from the experience though. Realize where the deal collapsed, so you can get the gun you want next time, at a price you can afford. To better understand how to deal at pawnshops, click here and read.
 
MatthewVanitas - I feel your pain. It does sometimes feel like Pawn Shop's are not trying to sell or "move" their inventory of stuff. Which in essence is correct. You basically summed it up when you said that Pawn Shops are in the business of making $$ by doing loans.

In all reality that "1963 Nigerian Service Revolver" that's been sitting on the shelve since Christ was a Corporal has been paid for long ago. Sitting on inventory that could be sold or turned over is a bad thing in general in the business world. The caveat is with Pawn Shops. The investment that they have made in the stuff that sits on their shelves or in their display cases is nothing more than window dressing IMHO. Many owners that I have talked to could care less whether something sells or not. It could sit there forever and rot and many Pawn Shops would care less.

I think that what the pawnshop owner told you was refreshing – he told it the way it is. Maybe being a bit too honest but non the less straightforward.

Just keep that in mind when you go into your next Pawn Shop. They don’t have to make any sale for goods/merchandise that they do not want to. Why, because their livelihood does not count on it. And the merchandise you want does not have to be turned over for them to stay in business much less stay in the black.

If you keep that in mind I think you will have a better understanding of why it is that good deals are so hard to find where you would expect to find them the most.

Regards,
Rob
 
MatthewVanitas, all I can tell from your account of the events is that you are upset because the pawnbroker did not deal with you on your terms. The broker was very smart not to, but not because they were your terms, but because your terms sucked from his persepctive.

I assure you. You don't know his business better than he does. You don't know his inventory, his client base, his financial situation, etc. You have no way to know his business better than he does and you have no way to know whether your trade will be a better seller for him or not. You may be correct, but you may not. You have no idea what his cost is in the other gun. ALL of those things come into play for the broker with each purchase he makes and a swap is a purchase and sale and so those must be consider.

From a pawnshop or retail perspective, an even swap on comparably priced items (from a sales perspective) is stupid. There is no real profit in even swaps and it doubles his risk, first with the original gun and then with your gun. It also means double the FFL paperwork. And it means double the handling time. The possible $25 additional profit isn't worth the risks and hassles and actually may end up resulting in a loss of $ on the exchange because that potential $25 profit can be lost quickly in the paperwork and 10 days hold time expenses.

So what are you hiding by not telling us the brand of your new BRAND-NAME HERE gun? Are you afraid that we will agree with the broker that your trade isn't worth the trouble? As a $350 9mm, brand new, my guess is that would be the case.

cassandrasdaddy said
seems like they get 400-600 percent selling guns thats nothin to sneeze at

Actually, no, it isn't that much. That is direct cost (plus the cost of the original gun) plus the overhead for the new gun and the overhead for the old gun.

---

Something else to note is that pawn shops often will loan on items that they don't need to purchase. A low purchase price offer can reflect that they don't need that immediate inventory and so it would be stupid on their part to buy inventory not needed, but a loan may help out the client and the client can then get his goods back and both the client and broker come out on the deal.
 
Pawn Shops are a Business

I have a Brother-in-Law that goes to many different Pawn Shops each week. He looks at the merchandise and often makes offers that are rejected outright. He sometimes finds bargains but that is rare. He thinks the Pawn Shop owners are foolish to hold on to things and want almost retail for them. I think he is foolish to go somewhere to buy things where they are an unknown quality and background. Pawn Shops are in the money business and to be remain legal they deal in some merchandise. If you want to see what a pawn shop looks like without the merchandise go to a Pay Day Loan shop.
When another Brother-In-Law left my sister she pawned his tools (Lots of them Snap-On) for pennies on the dollar. When I asked her what happened to all of the tools she said she pawned them. I told her that I would have bought them she said she was embarassed to ask me and the pawn shop treated her well. I went to the Pawn Shop to see what the tools were selling for and they were almost retail and the guy didn't even want to talk about discounts or lower prices.
Pawn Shops are a Business not a swap meet.
 
Fair enough, by the harsh light of the following day, I do agree that a pawnshop has little incentive to deal in commodities vice cash.

I do agree that it was refreshingly honest of the pawnbroker to tell me that he could give me $75 for a pistol that he would then mark at $350. His perogative, based on his view of risk/benefit.

Based on these realizations, I'll confine my trading to the few local gun/pawn shops which are heavily involved in the gun business and know the gun market well, rather than the more traditional pawnshops. I'll stick with talkin' cash at the traditional pawnshops.

I agree that a pawnshop is unlikely to assume even slight risk to move a product, since the potential benefit is minimal compared to the more profitable moneylending business.

IRT my attitude towards pawnshops: while I do not believe that pawnbrokers, payday-lenders, rent-to-own stores, etc. are financially healthy for poorer Americans, I do realize that they are part of a free market, and it's up to the individual customer as to whether they feel that the added costs are outweighed by the convenience.

-MV
 
If you're willing to walk-out the door (without buying) and the gun sits on the shelf for months, you can usually get a deal. I bought a Mossberg Persuader this way. I walked-out 3 times. Each time I returned the price was reduced. On my 4th visit they offered the gun at 40 per cent off the original price. I'm sure they still made a nice profit, but I got a good deal, too.
 
This is such a great thread I don't know where to start. :D My son-in-law is an assistant manager in a pawnshop. He won't take the title because he would go salary, work more hours, and make less money. He is a smart one.

When I met him he new what a gun looked like, now I've ruined him. :p I have got him pretty knowledgable on them shootin' irons and he was quick to find sources for pricing them. He has called me on them to see if they are popular or of a good quality. Oh, he has made a few mistakes, like selling the mint 6" pyton to a total stranger for $450...before he consulted me. He will never live that down.

Being as he is my relation, I get special pricing like my mint SS Colt King Cobra for $300 and a very good Marlin M60 for $59. I won't tell you guys what I got the Taurus 92 for. How about the RIA for $249-new?

But to the point. the guy in the pawnshop, if not a manager can only do so much when dealing on anything. Pawnshops get special attention from authorities when it comes to guns so they keep the ordinary clerk under tight scrutiny and won't let them do much actual dealing. The pretty much have to get an ok from the manager of the store. If it was my boy dealing, he probably would have traded. He is good that way.

Keep your eye on the gun in the case. It will go down in price about every two months untill it sells. Also, my boys store will have a clearance sale every so often to move merchandise if they are getting too much on the floor.
 
I've been in good and bad pawn shops. I go back to the good and avoid the bad.

Went CB radio shopping once when CB was all the rage. I knew exactly what I wanted, and he had two for $150 (for the pair). I told the guy they were current production, sold for $49.95 at Radio Shack. He called Radio Shack to confirm, then said "I can go as low as $90." You gotta be *!&^* KIDDING me, I thought. I told him "I only need one. All my friends already have CBs. It's used. Will you let it go for $35?" He says "They're a pair."

"Not at Radio Shack. For $50, I get it new with warranty. For only ten more than you're asking, I get the pair, NEW WITH WARRANTY." He wouldn't budge. I went to Radio Shack. The radio sucked, I got my $50 back.

On Topic (guns): One pawnshop I return to often - bought a S&W Model 19 about 20 years ago, went back and bought a holster for a S&W Model 19 about 3 years ago. I often wonder if that holster had been there that whole 17 years... :shrug:
 
I am in Austin as well and have seen some "deals"
$475 for a Bersa .380{labled as a Beretta}
$125 for a Raven .25
$775 for a Glock 17{with two 10 round magazines}
$525 for a Norinco SKS
$425 for a Mossberg 500
My advice, stay out of Austin pawnshops unless you just need a good laugh.
 
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