Start A Pawn Shop - Business Ideas

Pat Walls

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Updated: September 15th, 2022

Start A Pawn Shop

Please note that the data provided in this article are estimates and may vary depending on various factors, and should not be considered as perfect or definitive.

A pawn shop is a retail establishment that offers secured loans to customers in exchange for personal property, such as jewelry, electronics, and firearms. The business model is simple: customers bring in items of value, and the pawn shop provides them with a loan. If the customer repays the loan, including interest, within a specified period of time, they get their property back. If they don't, the pawn shop keeps the property and resells it.

Pawn shops have been around for centuries and have a reputation for being a bit seedy and serving only the most desperate customers. However, with the rise of reality television shows such as “Pawn Stars” and "Hardcore Pawn,” people are beginning to see pawn shops in a different light. Today, many pawn shops are clean and well-lit, offering high-end items such as designer handbags and watches.

To start a successful pawn shop, it's essential to understand the value of the items you will be buying and selling. It's also essential to have a good relationship with your customers and to be willing to work with them to find a loan solution that fits their needs. Additionally, you should always comply with all federal, state, and local laws.

One of the most exciting aspects of a pawn shop business is the ability to buy items at a low price and then resell them at a markup. It’s the perfect opportunity for an entrepreneur with an eye for a bargain and a knack for selling.

Another critical aspect of running a successful pawn shop is to create a safe and secure environment for your customers and employees. Properly securing and monitoring your inventory and implementing security measures to protect your staff from potential harm.

Overall, a pawn shop can be a great business opportunity for anyone interested in buying and selling value items. A pawn shop could be the perfect business for you if you have an entrepreneurial spirit, a good sense of value, and a willingness to work with customers.

Starting a pawn shop requires a great deal of effort, dedication, and most importantly passion.

If you're interested in how to sell money lending, or selling money lending online, you can use this page as a guide for everything you'll need to know.

Want to learn more? You can check out our full guide on how to start a pawn shop ➜

Key Stats

market size

$258B

starting costs

$18.9K

gross margin

43%

time to build

270 days

Startup Costs

	Min Startup Costs	Max Startup Costs
Equipment & Supply Expenses	$66	$1,200
Retail Business Expenses	$1,250	$11,650
Inventory Expenses	$350	$14,750
Advertising & Marketing Costs	$75	$9,636
Software Expenses	$0	$425
Website Costs	$13	$215
Total Startup Costs	$1,754	$37,876

See all startup costs ➜

Successful Businesses

Business	URL	Rank
USA PAWN	usapawn.com	2,673,722
Big Dog Pawn	bigdogpawn.com	3,130,482
Pawnbrokers Rodeo Drive	pawnbrokersrodeodrive.com	3,361,525
Cash In A Flash Pawn Shop	cashinaflashpawnshop.com	3,944,694
LA Pawn Shops	lapawnshops.com	3,949,418
The Pawn Outlet	thepawnoutlet.com	4,618,954
RLG	pawn.co.bw	4,625,753
South Charlotte Jewelry & Loan	southcharlottepawn.com	4,978,641
Perfect Pawn	pawnpawn.com	5,127,021
GodFather Pawn	godfatherpawn.com	5,441,735
Time Pawn & Gun	timepawn.com	5,799,999

See all businesses ➜

Pros & Cons

Pros	Description
Rewarding work	Starting a pawn shop can be really rewarding work. After all, you are solving an immediate issue for your customer and you're working on something you truly care about.
Meaningful business connections	You never know who you will meet as a pawn shop. This could be the start of an incredible business opportunity!
Daily physical activity	Pawn Shop's typically involve a much greater degree of movement than other lines of work. Most days, you will spend your day walking, running errands for your business, and performing a multitude of tasks. This can have a positive impact on energy levels and your overall health.
Amazing perks and discounts	Working in the pawn shop comes with its perks! As a seller for these products/services, you typically also get to enjoy industry perks and discounts.
You are your own boss!	With starting a pawn shop, you are the one to make decisions for almost all of the operations. Calling the shots can be empowering and liberating!
Local Community	One of the best parts of starting a pawn shop is that you can develop a local following by selling your products at craft shows, farmers' markets, or even local storefront businesses! This gives you access to additional revenue streams and loyal customers.

See all pros ➜

Cons	Description
Crowded Space	Competition is high when it comes to your pawn shop, so it's important that you spend a good amount of time analyzing the market and understanding where the demand lies.
Finding The Right Supplier	Most businesses in this space go the supplier/manufacturer route, which isn't a bad thing! However, finding the right supplier can take a lot of time, energy and trial/error. If done properly, this process can save you months (if not years) of time and energy. More on this below in the "finding a supplier" section.
Motivation of employees	If you plan to have a sales/content team on board, finding creative ways to motivate them can be a challenge. It's important that you're able to offer great incentives and a good work environment for your employees.
Low margins	The gross margins for your pawn shop are typically around 43%, which can make it more challenging to incur new expenses and maintain profitability.
High employee turnover	In the pawn shop, employee turnover is often high, which can be quite costly and time consuming for your business. It's important to try and avoid this as much as possible by offering competitive pay, benefits, and a positive work environment.
Taxes	As a pawn shop, you typically pay self-employment taxes which can be quite high. It's important to understand what you will be paying in taxes each year so you can determine if the work you're taking on is worth it.

See all cons ➜

Key Stats

Startup Costs

Successful Businesses

2,673,722

3,130,482

3,361,525

3,944,694

3,949,418

4,618,954

4,625,753

4,978,641

5,127,021

5,441,735

5,799,999

Pros & Cons