Page "Pawnbroker" Paragraph 6

To determine the amount of the loan, the pawnshop owner needs to take into account several factors.

One factor is the predicted resale value of the item.

This is often thought of in terms of a range, with the low point being the wholesale value of the used good, in the case that the pawnshop is unable to sell it, and they decide to sell it to a wholesale merchant of used goods.

The higher point in the range is the retail sale price in the pawnshop.

For example, a five-year-old 42 " Sony TV may have been bought by the customer for $ 1000.

However, as a used item in a pawnshop, it will only fetch $ 250 and $ 300, because the customers will be wary that it might be a " lemon " that the seller is getting rid of because it has some hard-to-detect problem.

Used electronics wholesalers will buy the TV for $ 100 to $ 150.

The wholesaler pays a lower price than the retail value because they have the added cost of hiring electronics technicians who overhaul and repair the items so that they can be sold in used electronics stores.