In the pawn industry, there have been many key learnings that we have all had so far in the midst of the Covid-19 pandemic. Today we want to share what we think the biggest things that pawnshops must do to survive, thrive and be ready for the next major storm are.
The first one seems obvious after the fact but is something that we have been preaching for a very long time. As a pawnshop we cannot be content with just doing the loans that walk in our doors. The reality is that we need to have a much better and more diversified loan balance. Most of us spent time wondering where all the people where that needed money when this crisis hit and we realized very quickly that the folks who are our normal customer base didn’t need the cash because of stimulus checks and extra unemployment checks. Those who need the money are those who made too much for a stimulus (the upper middle class) and the business owners who were forced to shut down and never got unemployment. These are not our normal hard-core customers. If we want to grow our business, we have always felt that we need to get those folks as our customers through higher end loans and more. We recommend that you make this a priority in your business and we can help if you need.
The next one seems like a no brainer as well. The reality is that we have been preaching that pawnshops need to do online sales for over 10 years, but the sad fact is that nearly 85% or so do not do any online sales. Those folks, especially if they don’t deal in firearms, needed online sales because those who we are working with saw massive increases in online sales due to people being “Quarantined”. Now more than ever, you need to get locked in and start doing, or grow your online sales. It is essential if you want to survive.
A third realization that our clients made during this time was that they needed to have additional revenue streams or items to sell. Online sales aren’t enough to offset all the change today, but it helps. In addition, pawnshops need to add more services and more items to be successful. Does your shop take in high end watches? Purses, handbags, and more? You need to diversify your business and we can help!
We also know that with the increase in retail sales that we saw, there was still way too much discounting happening when it wasn’t necessary to sell the items. This is a habit and is too common in the pawn industry. Advanced retail sales training needs to happen. If you can sell more and discount less, what could that mean to your business? We are experts at this and can help your pawnshops succeed in this area.
Lastly, we have always felt that no matter what kind of business you own, you need a catastrophe plan and a disaster recovery plan. We have been writing these and referring businesses to others for these for well over 10 years. While you cannot prepare for every type of emergency, you can take the sting out of just about any one of them with a detailed plan and you are 50x more likely to survive it than those that do not. Sadly, 99% of businesses do not have one. We can help!
This Pandemic has not been easy on any of us but as we know, we have resources and help if we just look for it!