Have you ever wondered how pawn shops make money? The answer might surprise you. Pawnshops are more than just places to get a loan. They're also great places to find great deals on items you may not be able to get your hands on elsewhere. According to IBIS World, enough people use them that the industry revenue in 2022 amounted to $2.9 billion. Here's a look at the various ways these types of shops generate revenue.

1. Pawn Loan Interest

One of the most common ways that pawn shops make money is through the interest rates associated with pawn loan agreements. When someone brings in an item for a loan, the pawn shop will offer an amount of money and then charge interest on the loan. The interest rates vary by state. Depending on the item, pawn shops may also charge additional fees like storage fees if the item isn't picked up promptly.

2. Selling Items Bought From Customers

Pawn shops may also buy items outright from customers. It's a great option for someone who needs a quick cash infusion and doesn't want to worry about paying back a loan. Pawn shops then resell these items to other customers for profit. This can be a great way to get new items for customers at a discounted price.

3. Online Sales

With the rise of the internet, pawn shops now take advantage of new sales channels. Many pawn shops sell items online through their websites or on other sites like eBay. This opens up the market to a larger group of people and allows pawn shops to make money from customers globally.

4. Gold and Jewelry Sales

Gold and jewelry sales are part of another big business sector for pawn shops. People often bring gold, silver, and jewelry items to pawn shops to get cash for them. Pawn shops then turn around and resell these items at a higher price.

Whether you're looking for a loan or to pick up a great deal on something, you'll find it at a pawn shop. With their various revenue sources, pawn shops are always looking for ways to make money and serve their customers. So if you're in the market for a loan or looking for a great deal, give us a try today at Alpha Pawn & Jewelry.