Profit Potential in Pawn Shop Stocks

Previous weekend I witnessed a most unusual sight. I actually pulled into the parking lot of a small strip mall inside Northern Arizona. I was on a mission to pick up some needed requirements for dinner. As I got out of my car I noticed folks parked in the Ford Explorer right next to me. These people were pulling boxes and a nice looking guitar out of their automobile. They then carried these items into one of the stores.

How odd.

I’m used to people carrying boxes out of a store, although not into a store. What really boggled my mind was the stable stream of other individuals. The people parked right beside me weren’t the only ones. I noticed 3 other people doing it same exact thing.

Returning unwanted items?

I swiftly realized that these people weren’t returning defective or unwanted things. I was witnessing a local pawn shop in action. Pawn merchants are just like local banks. They provide cash loans to folks, and they profit from the interest and fees charged. fourways pawn shop make a profit acting as a financial institution – just like Bank of The usa or Citibank.

I bet you never thought of them that way?

Pawn shops just take the collateral idea one phase further. They hold onto the assets as collateral. Is actually like getting a mortgage on your home, but instead of a residence, you use tools, musical instruments, or jewelry.

Providing a beneficial service.

People in need of short term loans often use pawnshops. That allows individuals to leverage assets and get much needed spending money. Now, pawning items is not their only business. These kinds of pawn shops have a number of ways to profit… but more in that in a minute.

This isn’t your father’s pawn go shopping anymore.

Pawn shops used to have a bad reputation. Now these kinds of once seedy shops have become legitimate means of financing seems to have. The business is run by national companies who very own hundreds of stores. They provide safe and clean environments, and also locate stores in good neighborhoods. Some high powered graphic consultant is truly working wonders.

But that’s not all.

Pawn shops are not just focused on pawning items. Now they give you a number of other services including short term personal loans, paycheck advancements, and lending against automobiles. This allows pawn shops to be able to expand their product offerings and diversify their earnings.

For pawn shops, recessions are a good thing. Money’s tricky to find, and credit standards are tightening. This is when pawn suppliers do more business. And more business means more profits.

Consider it this way. If you’re maxed out on your credit cards and want to buy groceries or make a mortgage payment what do you do? The bank is not going to loan you money. Good luck with the credit card companies, most likely already tapped out. And going to friends and family isn’t an alternative. To raise the money quickly, you might go to a pawn shop.