9 Business Lessons from a Pawn Shop Pro
With almost 30 percent of Americans possessing no checking accounts or credit resources, pawn shops like the Columbus, Ga.-based Money Mizer Pawn & Jewelry are increasingly becoming a primary resource for small loans. That, combined with the rising price of gold and silver, has made pawn shops as popular today as they've ever been.
Money Mizer’s CEO Robbie Whitten has learned a thing or two about dealing with customers in his 30 years in the pawn business. He shares a few of those tips with BusinessNewsDaily readers.
Lesson 1 - Never assume by the way a customer is dressed that he doesn’t have any money. I had a guy come in dressed in overalls, shot-out shoes, hair messed up and smelling like he hadn’t had a bath in three days. He was looking at jewelry and no one wanted to wait on him, so I approached the customer and treated him respectfully, and he purchased a diamond ring for $8,500 and paid in cash.
Lesson 2 - Never take a credit card over the phone from someone you don’t know. I sold a Rolex Submariner on eBay back in the early days of eBay and before PayPal. I took a credit card over the phone . The card went through perfectly so I shipped the Rolex. A few days later I received a call from the credit card company ̶ come to find out the card was stolen. I ended up with no money and no Rolex.
Lesson 3 - Move inventory around in the store, kind of like grocery stores do. It keeps repeat customers from seeing the same old stuff sitting in the same spot time and time again. Also, if you have some inventory sitting for a while and not selling, mark it down and move it – even if you have to take a loss occasionally. As they always say, time is money.
Lesson 4 - Always treat customers kindly and greet them when they come into your store. Be attentive to their needs (talk to them, for god’s sake), be happy and smile. Why do you think Walmart has greeters at the front doors?
Lesson 5 - Be very careful extending credit to a friend or family member without collateral. I learned this lesson years ago when I extended credit on a purchase to a good high school buddy of mine. He never paid a dime and I haven’t seen or heard from him in over 30 years.
Lesson 6 - Your best advertising is word of mouth . We spend approximately $100,000 a year on advertising and it is very effective. However, your customer's word of mouth is the best advertising in the world. Keep your customers happy and remember the old saying: A happy customer will tell a friend about your business; an unhappy customer will tell 10 friends about your business.
Lesson 7 - Even though we're in business to make a profit, be charitable on occasion to customers that are truly desperate. Use your judgment, but when a customer asks for a deal or needs a break, show some compassion.
Lesson 8 - Stay ahead of the game in your industry and always be one step ahead of your competition. Be the one that tries new strategies, new advertising campaigns, keep up with new technologies like social media (Facebook, Twitter, LinkedIn, etc.). These are simple things that could turn into profits and new customers.
Lesson 9 - Learn something new every day. Never think to yourself for one minute you know it all. Not a day goes by – even after 31 years in the pawn business – that I don’t look to others in the industry for new ideas, methods, and information to learn something new and make more profits. I’m not bragging, but you can bet your bottom dollar that my pawn shops make 2-3 times more in profits than competition in my markets.
Money Mizer currently has three corporate-owned locations, in Columbus, Ga., and Phenix City and Dothan, Ala., as well as one franchised location in Auburn, Ala. After launching its franchise program in 2008, the chain expects to sell 10 to 15 franchises in 2011, with 150 locations open by the end of 2015.
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