For anyone who watches the History Channel’s hit series, you might be interested to know that Corey Harrison finally accepted my friend request on Facebook. It’s legit him too. I think.
Because our cable is out and I’ve been missing the modern day phenomenon, Shark Week, I was forced to watch some episodes of Pawn Stars that I had TiVo’d from previous weeks.
It got me thinking about the Pawn industry.
First of all, the show is awesome. It features the patriarch of a family, his son, and his grandson owning and running a pawn shop in Las Vegas. Rick is the “main character” and though the family owns the shop, it’s clear that anything bought or sold has to make Rick happy or he isn’t happy.
In other words, if Rick ain’t happy, ain’t nobody happy and you lose your job.
For those who haven’t seen it, the show is simple. Ordinary people bring in items that they either don’t want anymore or don’t know what they are. I’d say that 95% of them come in wanting to sell their merchandise to the store. As with all of the pawn industry, the shop then turns around and sells it to a customer (could be a collector, hobbyist) for a profit. Sometimes a small profit, sometimes a large profit. If you lose money, Rick doesn’t make money. And we’re back at the beginning.
It’s a good show because you never know what might walk in the door. Some of it is really historical stuff (war bonds from the Revolutionary War) and sometimes it’s weird stuff (like a key that also functions as a gun). Now, Rick knows a lot about a lot of stuff, but he doesn’t know everything. So, they bring in an expert to tell them what the object is, it’s significance, and sometimes-the value. Often, an item is in need of restoring, and so Rick takes it to a shop to have it restored. If you do the math, he has to sell the item for his cost + restoration fee + some in order to make a profit. And…he doesn’t know how long it will sit on the shelves before it sells.
Of course, it is a typical pawn shop, people can pawn their stuff to gain some cash, and if they want their stuff back, they pay back the money in 120 days with interest. You can see how a shop like this might work really well in Vegas. People pawn their jewelry and gamble their money away in hopes of winning enough to make a profit.
If you haven’t seen the show, here’s a little taste:
Pawn shops have been around for years. It’s an interesting business model to say the least. Rick won’t pay anywhere near what he thinks he can sell it for. And he is strict about it too, if he can’t make money, he doesn’t buy it. Rick has often said, “A pawn dealer with a heart is a pawn dealer out of business”.
What I find so intriguing is the phrasing behind the business model. When someone wants to sell something, Rick is very frank and says “I can’t give you what it’s worth because I have to make a profit.” So, depending on the seller’s emotional attachment to the item and his/her need for immediate cash, they decide whether or not they want to do business. It’s like a perfect mixture of an open market (giving someone a place to sell their things), a Walmart (they only way he can stay in business is by buying and selling a large assortment of items), and a bank or mortgage firm (loaning money to an individual with a bit of collateral).
Back to the phrasing. I grew up, like many Americans, constantly hearing “If you work hard, you’ll make money, you’ll be ok.” And for some reason, I always equated that to physical labor. Put in a lot of effort, and you’ll make the money.
I had no idea how messed up my thinking was. Think of those that you know who work ridiculously hard at physical work. How much money do they make? Think of those that don’t work as hard in terms of actual labor, but use their brains and wits to make deals, secure profits, and move money around. How much do they make?
It begs the question, which is worth more: Labor and effort, or brains and education?
I think we have answered this already.