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One of the main differences between a pawn shop and a jewelry store is the issue of pricing.
Pricing at a Jewelry Store and Pawn Shop
In a jewelry store, the items are priced on the cost basis. The make and design of the item helps set its pricing. Unlike jewelry stores, a pawn shop will price their gold and other jewelry items with the current price on the market.
There is the unique ability to monitor the market and then price the items accordingly. There is more flexibility with market pricing.
A jeweler will buy items at wholesale and mark them up to make a profit. Pawn shops instead cut out the middleman and this allows them to price their items in response to the current market.
Pawn shops won’t mark up their item just because it has a certain designer. If gold prices are lower than pawn shop gold pieces will be lower.
Pawn shops are in the business of pawning and jewelry stores are in the business of selling. There is a slight difference in the two. Pawning is taking out a loan and using your jewelry as collateral. You and the pawnbroker agree on a price and they hold the item until you pay back the loan with fees and interest.
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Pawn shops will work with high volume and will buy a variety of pieces so there are different options. Jewelers, on the other hand, are in the process of selling. The goal is to get the jewelry at a lower price, have a markup, and then have it in the display case.
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Most jewelers are only going to be selling jewelry to their customers and not to a wholesale network. They are more selective in what they buy and are only going to purchase stylish or trendy pieces to offer customers.