The COVID-19 pandemic left millions of Americans unemployed. In April 2020, the unemployment rate went as high as 14.4%. These situations typically mean more business for pawnshops.
When people are unemployed, they are more likely to borrow money by pawning their valuables. Surprisingly, that isn’t the case. Many of these businesses saw an uptick in sales at the beginning of the pandemic.
However, things have changed rapidly since. According to the National Pawnbrokers Association in New York, pawnshop dealers across the country have witnessed a significant change in their business – and not in a good way.
There’s also been a shift in the type of items currently in demand, which has proven disruptive for many pawnshop dealers.
Read on as we discuss how the COVID-19 pandemic has influenced the supply chain for pawn shops in Pittsburgh and other cities and which goods are in demand.
Demand for Gaming Systems and Electronics On The Rise
With people staying at home, there is an incredibly high demand for gaming systems and other electronics. People are also buying more TVs, stereos, and laptop computers. These items are necessary for online learning and remote work. They also offer much-needed entertainment while you stay at home.
Unfortunately, many pawnshop dealers in Pittsburgh are unable to match the current demand for these items. Many of them sold all of their gaming systems early on and are struggling to restock their supply.
Luxury Items Sales Increase
Pawnshop dealers have also noted an increase in demand for luxury items such as jewelry.
Gelman Loan has started stocking up more gold chains and earrings to address the higher demand for luxury items. The pawnshop increased its prices, but people are continuing to buy gold. We can attribute this increase in demand to the stability of gold as an investment.
Gold has always proven a reliable commodity during economic crises, and gold prices usually increase during such periods.
Other pawn shops in Pittsburgh may have to consider stocking up on these items to take advantage of this demand.
Imbalance in the Overall Supply and Demand
There is an evident imbalance in the supply and demand for goods typically offered by pawnshop dealers. More people are coming in to buy items or pay off their loans than pawning valuables in exchange for credit.
Pawnshop dealers rely on pawn loans to generate revenue. With fewer people bringing in stuff, most pawn shops in Pittsburgh are struggling to create the type of income they need to remain operational.
According to the Post-Gazette, nearly 10,000 pawnshops reported a 40% to 50% decline in lending.
They are struggling to get new products, which hinders their ability to meet rising demand and boost sales.
Wrapping It Up
Numerous pawnshops have fallen on hard times during the COVID-19 pandemic. Due to the stimulus paid out to unemployed individuals, many families are cash-rich at the moment. As a result, they don’t need to sell items to raise money.
Gelman Loan is a premier pawnshop in Pittsburgh, PA. It offers quick loans against jewelry items and gold without requiring a credit check. For more information, visit http://www.gelmanloan.com/.