By KENT MARTIN
Selling electronics today is not for the faint of heart. “Electronics change very quickly anymore,” said Mike Rechtman, owner and manager of Big Chicken Pawn, in Marietta, Ga.
And the secret to success? Speed. “You have to get in and get out! We get in, we get out. We want to sell stuff quick. We loan a fair amount of it but then we sell it cheap. We don’t sit on it, we don’t bleed it.”
But even though electronics remain one of the most in-demand product areas, Rechtman said it’s not necessarily where his big profits are made.
“We don’t double our money on electronics. We have to move it because every day you keep it, it’s worth less money. You have to get rid of it. Bam! See ya!”
Rechtman’s comments tend to reflect much of what’s happening in electronics sales in pawn shops across the country. With few exceptions, electronics gear must be fairly late-model: The older the model, the less demand for it.
“We have some members who are very cautious about making loans on any kind of electronics just because the prices drop so very quickly,” said Emmett Murphy, spokesperson for the National Pawnbrokers Association. “This can affect the actual return on the loan, so they’re often very cautious and are more comfortable with higher-end electronics.
“As an example, Apple products, such as Mac, iPads, iPhones, are things which retain their value, and also high-end laptops,” Murphy said.
“The more expensive laptops that cost $2,000 or more do retain their value. More pawnbrokers are making loans on those products because if they need to, they can sell them on eBay more quickly.”
Murphy said the turnaround time for electronics has accelerated. “I can speculate on the electronics issue just because the price point on electronics has dropped significantly and they are being produced much more quickly,” he said.
“There used to be maybe an 18-month turnaround between different product lines, and in the last year, we’ve seen new products being released much more quickly, maybe every six months or so. This has really changed things for pawnbrokers.”
Take televisions, for example. New trends in televisions still have to be validated in the marketplace before they’ll gain acceptance by shop owners. For Don Anderson, vice president at Ed’s Pawn Shop in Stockbridge, Ga., the jury’s still out on 3-D TVs. He prefers newer model flat screens.
“If it’s not a flat screen TV, we don’t even fool with it,” he said. “Even if it’s a nice, older, large screen TV, we don’t fool with it.”
Another pawnbroker agreed. “It doesn’t impress us if it’s 3D,” he said. “We don’t know where 3D is going, we don’t trust it.”
Murphy said smart TVs, on the other hand, are quickly finding a market. “Our members report that smart TVs that have high-end features like streaming have additional value. But they don’t see any additional value in features like 3D. It seems that the flat screen TVs are most in demand.”
Television accessories, such as video players, are also caught up in these trends. The more recent surge among consumers toward streaming services such as Netflix has dampened sales for video players.
Location, Location, Location
When it comes to DVDs and Blu-ray discs, it seems to depend upon your location. “Blu-rays are selling but DVDs, when we do sell them, they’re a dollar each,” a Miami pawnbroker said. But in Littleton, Colo., a pawnbroker reported that DVDs remain a steady seller in his store.
Video games are still strong. “The exception would be the Wii U, which was a big flop,” said Murphy. “Gaming systems still remain strong but again, people are careful to make sure they don’t get stuck with them for too long.”
Other business owners agree. “If you’re looking for a Nintendo game, like from the 80s, we’re not the place to shop,” the Littleton pawnbroker said. “But anything that’s current, like the newer systems, are really popular out here, too.”
In some areas, however, even vintage game systems find a market. “Pretty much any video games are good, even vintage stuff, like Atari,” said Anderson. “If it’s in good shape, there’s a market for that, too.”
The popularity of smartphones and iPhones, in particular, has driven sales in pawn shops nationwide. For younger consumers, especially college students, a smartphone has replaced a laptop for their computer needs. The newer iPhones sell the best, though older models still retain value.
Pawnbrokers will offer short-term loans for iPhones because they remain strong in the secondary market. But here again, changing technology in iPhones, especially new security features, may eventually dampen demand.
“iPhones are great, but the new generation of iPhones is getting to where they’re going to be very difficult to resell because they’re putting in tracking stuff and locking them up,” said Rechtman.
“We’ve done a really good business with cell phones but it looks like that era’s coming to an end because they’re starting to lock ‘em up and make them very, very difficult to resell.”
But perhaps the most dramatic trend is in computers. For decades, if consumers wanted a PC, they bought a desktop. Desktops were in virtually every business and in many homes. They dominated the marketplace for decades. No longer.
The move toward portable computers has shifted into hyperdrive with the advent of the laptop in the 1980s and, more recently, the tablet. Today, mobility is king and the desktop is quickly going the way of the typewriter.
“Our members are not making loans for or buying desktop computers any longer,” Murphy said. “It’s really laptops and tablets. We have members who cater specifically to students, they’re located near colleges, and they think laptops have better resale value than iPads or tablets, but definitely desktops are out the door.”
Indeed, pawnshops may be the best place to find low-priced laptops today. Typically, in many stores, laptops may be priced at half of their original retail price.
“iPads and Mac laptops are probably No. 1,” said Rechtman with Big Chicken Pawn. “Laptops sell a little bit, tablets sell some. We wholesale a lot of laptops because we’re a big laptop business; we take in a lot of laptops.”
But even laptops’ price point has deteriorated. “So we wholesale a lot of ‘em and we sell about 75 percent to a few different people that resell ‘em on their own, and then we retail a few, but we keep the flow going with our wholesale customers,” said Rechtman.
Interestingly, Murphy said a few NPA members have found a niche market for desktops: Themselves.
“Some members feel that desktops still have value in their business,” he said. “We have one gentleman who, when a high-end desktop comes in, may make a loan on it with the intention of acquiring it if it defaults because pawnbrokers still use desktops and towers for their own business.”
And then again, no matter which latest, hottest iPhone or TV may be dominating the market or how outdated a video player may be, the old adage often holds true: Anything will sell for the right price.
As Anderson noted, “It’s really all about price. Anything will move at the right price, even if it’s not a particularly popular item, if it’s at the right price, if you set a low enough price for it.”