How to Make Your Pawn Shop More Profitable
Just like any other business, pawn shops are always on the lookout for proven strategies that will help increase profits. When it comes to the unique operations of a pawn shop, there are some useful strategies that every store owner should take a few moments to consider. In order to increase profits, a few adjustments here and there to your business model can make a world of difference.
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How to Make Your Pawn Shop More Profitable
As you read through the following approaches to improving the profitability of your pawn shop, keep in mind that these are not necessarily “one size fits all.” Think about the uniqueness of your shop and how you can apply these strategies to specifically fit your way of conducting business.
1. Embrace Social Media
Social media is all about making connections. Utilizing this type of communication tool is an essential component to the success of the modern pawn shop. Share updates about your shop, keep in touch with regular customers, and of course, find new customers. Most importantly, you can highlight new items and promote deals to get people in the door.
Let’s say a beautiful classic guitar comes through your door. Post it on social media and people will be clamoring for it in no time. As a pawn shop owner, you know what items are bound to get your customers excited. Social media allows you to put these coveted items right there in front of their faces.
Here are a few other benefits to using social media:
- Increase inbound traffic to your website
- Create and improve brand loyalty
- Cost-effective (social media can be used completely free!)
- Improve your store’s search engine rankings
- Establish your voice as an expert in the pawn shop industry
2. Supplement Pawn Inventory with Wholesale Inventory
It’s understandable that you will have a wide variety of items on hand that people have pawned. However, it is your responsibility to fill the rest of your shop with specific items that appeal to your customer base. The makeup of your customer base will depend on your location and the demographics of your area. If you can connect with these people by offering them appealing wholesale inventory, you will surely see an increase in profits.
Here are some additional tips to help you stock your shop with wholesale inventory:
- Keep current on the popular items that are trending in your area.
- Maintain fair, yet competitive prices. Keep in mind both your profit margins and your customers’ willingness to spend when you create price points.
- Use creative merchandising to strategically place popular items so they are easily visible to customers inside and outside the shop.
If you are struggling to figure out what items are trending in terms of popularity, simply ask your customers. You can have an open discussion with them when they are in your store. You can also have them fill out a brief survey to get their feedback on the types of items that they most desire.
3. Customer Service Goes a Long Way
When a person steps foot into your store, the experience is just as important as the items on the shelves. While good customer service is essential to any business, it is especially crucial for those in the pawn shop industry. Word of mouth spreads quickly amongst customers, whether it’s good or bad feedback. This is why it’s so important to ensure that your customers come away with only good things to say.
Here are a few simple customer service tips to implement at your shop if you aren’t already doing so:
- Greet each customer with a warm smile and a “hello” when they come through the door. Small gestures like this can mean a lot to a person.
- Be available and attentive to answer any questions about your items.
- Answer customers’ questions by providing as much detail and knowledge about your shop’s items.
- Don’t be too aggressive with your sales pitch. People get turned off easily when someone is in their face about purchasing an item.
- Put away your smartphones. This rule should apply to your entire staff. Phones can often distract your staff while customers are in need of assistance.
- Start a loyalty program for your customers. This will help create bonus incentives for your regular customers to come back to your shop even more.
4. It’s Time to Host an Event
Increasing profits is about drawing more people into your store. Hosting a special event is a great way to help increase your foot traffic. Before you get too stressed out at the idea of hosting an event at your shop, understand that you will be in control of how you execute this idea. For example, you could simply host a large blow out sale over the weekend by temporarily marking down prices on various items that you are itching to get rid of.
Here are a few other event ideas to consider:
- Host a seasonal or holiday party.
- Host an anniversary party for your shop.
- Collaborate with a local charity to help raise funds for a worthy cause.
5. Encourage Online Reviews
Whether it’s on Facebook, Yelp, or one of the many other social media platforms, you should welcome the idea of reviews. If you feel confident about the way your shop operates, ask your customers to write an online review after they leave. Online reviews serve as a major influence to those who are surfing the web in need of different services or products.
You can promote this idea to your customers through conversation, or you can add something to your printed marketing materials. Either way, find a way to plant the seed so that your customers are more willing to spread the word about your store.
As a business owner, you know just how important it is to roll with the punches when changes come along. The above-mentioned strategies are about tweaking your current business model to drive positive changes in the way your shop operates. Keep in mind, everything that you do in regards to these approaches should strive to achieve the same goal: increase your profits.Posted by Lois Haycock
Lois Haycock is a 20+ year retail and eCommerce veteran specializing in project management and business analysis of customer-facing systems and software. Lois is SVP of Digital Transformation at M&M Merchandisers. She also operates several eCommerce stores as well as an executive coaching business. Lois can be reached at firstname.lastname@example.org