2007-09-22 08:20:01 · 6 answers · asked by Anonymous in Business & Finance ➔ Personal Finance
Let's say you go to a pawn broker with a piece of jewellery that you have had valued at 1,000 dollars. Knowing the value of the jewellery, the pawn broker will independently offer you a low percentage of their own valuation - let's say a generous 200 dollars.
If you return to redeem the claim, you pay 200 dollars, the interest on the sum offered plus an optional redeeming charge.
If you fail to redeem the goods within an agreed period of time, the pawnshop can legally claim ownership and sell them. In the above example, they may sell the jewellery for anything between 750 - 1000 dollars.
The profit is the difference between the selling price minus the redeemable value (ie: the 200 dollars plus the interest and any other costs incurred).
2007-09-22 08:40:11 · answer #1 · answered by cornflake#1 7 · 0⤊ 0⤋
On the interest of the loan. They really don't want the item you have pawned. If it defaults, the resale is also another way they make the money. The lend you money on the item for a lot less than what it is worth
2007-09-28 08:56:43 · answer #2 · answered by ruscito_mom 2 · 0⤊ 0⤋
They pay at or lower than market value for the item then mark it up by 25-100% when it is eligible to be put up for sale.
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2007-09-22 08:24:09 · answer #3 · answered by ♪ Pamela ♫ 7 · 0⤊ 0⤋
Are you serious? Buying cheap and selling at a profit.
2007-09-22 08:27:14 · answer #4 · answered by Anonymous · 0⤊ 0⤋
buy cheap, sell high.
great place to buy stuff... you can sometimes negotiate good deals.
terrible place to go if your selling something... they will pay as little as possible.
2007-09-22 09:07:44 · answer #5 · answered by Anonymous · 0⤊ 0⤋
buy low, sell high
2007-09-22 08:23:02 · answer #6 · answered by Anonymous · 1⤊ 0⤋