Pawn loan or buy outright: how to decide the offer
Short answer: both a loan and an outright purchase start from the same number: what the item will realistically sell for. A loan is a share of that price that the customer can repay; a purchase price is lower than the resale price by your costs and margin. Use the same resale price for both, so the two offers stay consistent.
Two offers, one starting point
If your loan and your purchase price come from different sources, customers notice. Start both from the same resale price, based on real recent sales of comparable items.
The loan
The loan is your loan percentage applied to the resale price. The customer keeps the right to repay and collect the item. Your risk is the share of items that are not redeemed and have to be sold.
The purchase
When you buy, you own the item immediately and will sell it. The purchase price has to leave room for the time to sell, any cleaning or repairs, your costs and your margin.
Which to offer
- Customers who want the item back usually prefer a loan.
- Customers who want to sell usually prefer a purchase, often at a higher amount than the loan.
- Some shops show both offers side by side and let the customer choose.
Keep it explainable
Whatever you offer, the clerk should be able to say where the number comes from: the resale price, and the percentage applied to it.
How PawnMeter helps
PawnMeter shows the resale price from real sales and the suggested loan at your own percentage, side by side, so both offers start from the same number.
PawnMeter: Type the item. PawnMeter shows the resale price and a suggested loan, calculated only from what comparable items really sold for. When there is not enough data, it says so instead of guessing.
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