Taking an interest: Revenue has risen despite regulatory changes limiting interest rates

The Pawn Shops industry has grown strongly over the past five years. Despite this growth, many operators have suffered from a negative public image due to the high interest rates many pawn shops charge on loans, the low prices offered to customers for goods, and a perception that pawnbrokers take financial advantage of those in need. To counter some of these negative perceptions, some industry operators, including major player Cash Converters, have aimed to provide a more legitimate and professional image. This trend has helped increase the market reach and customer base of industry operators.Industry revenue is expected to increase at an annualised 4.1% over the five years through 2017-18, to $578.4 million. This includes expected growth of 2.6% in 2017-18...read more.

Industry Statistics & Market Size
Revenue
$578m
Annual Growth 13-18
4.1%
Forecast Growth 18-23
Profit
Employment
2,300
Businesses
447
Market Share of Companies

Industry Threats & Opportunities

  • Higher unemployment has contributed to growth, while increased competition has hindered profit
  • Higher unemployment rates and volatile consumer sentiment have supported revenue growth
  • High competition will likely force smaller players to exit over the next five years
  • Industry Report - Starting a New Business Chapter

    The industry has moderate entry barriers due to the need for a shop front, which can be costly to acquire, and the funds required to lend to customers and purchase stock. While shop rents are usually not prohibitive for a new pawn shop, funds can become tied up in holding stock that has been pawned, and in storing stock that has been purchased outright from customers. Successful operators buy or lend for products that can be easily sold, which increases stock turnover and reduces long-term capital requirements.While firms must meet licensing and regulatory requirements, these are generally not major entry barriers for new companies. State and territory governments control and issue pawnbroker and second-hand dealer licences, and charge a small fee for these services. Sta...purchase to read more.

    Additional Insights for the Pawn Shops Industry

    IBISWorld identifies 250 Key Success Factors for a business.The most important for the Pawn Shops Industry are

  • Economies of scope
  • Ability to alter goods and services produced in favour of market conditions
  • Ability to attract local support/patronage
  • IBISWorld analysts also discuss how external factors such as National unemployment rate and Real household disposable income in the Pawn Shops industry impact industry performance..

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    What's in this report

    What is the Pawn Shops Industry?

    Pawn shops offer secured loans to individuals, who then provide items of personal property as collateral. These firms also retail used goods that are often acquired from unpaid loans or are purchased directly from consumers. The industry excludes companies that only provide unsecured loans or only sell second-hand goods.

    Industry Products
  • Secured loans for personal collateral
  • Cash advances and unsecured loans
  • Selling purchased used goods
  • Selling unredeemed pawns
  • Selling goods on consignment
  • Other goods and services
  • Industry Activities
  • Providing secured loans
  • Providing unsecured loans (excludes online-only companies and specialist unsecured loan lending)
  • Purchasing goods for resale
  • Selling other used and new goods
  • Table of Contents

    Industry Definition
    Main Activities
    Similar Industries
    Additional Resources
    Industry Statistics Snapshot
    Industry Structure
    Executive Summary
    Executive Summary
    Key External Drivers
  • National unemployment rate
  • Real household disposable income
  • Consumer sentiment index
  • Demand from antique and used goods retailing

  • Current Performance
  • Industry characteristics
  • Steady industry growth
  • Increased external competition
  • Regulatory changes
  • Chart: Revenue Growth

  • Industry Outlook
  • Moderate future growth expected
  • Further external competition
  • Other industry trends
  • Table: Pawn Shops Industry Revenue Outlook

  • Industry Life Cycle
  • Life cycle reasons
  • Chart: Benchmarking - Pawn Shops Industry Lifecycle vs The Economy

  • Supply Chains
    Key Buying Industries
  • Antique and Used Goods Retailing
  • Consumers

  • Key Selling Industries
  • Consumers
  • Jewellery and Watch Wholesaling

  • Products & Services
  • Secured loans for personal collateral
  • Selling purchased used goods
  • Selling unredeemed pawns
  • Cash advances and unsecured loans
  • Selling goods on consignment
  • Other goods and services
  • Chart: Pawn Shops Industry Products and Services Segmentation

  • Demand Determinants
    Major Markets
  • Lowest quintile
  • Second quintile
  • Third quintile
  • Businesses and other sectors
  • Fourth quintile
  • Highest quintile
  • Chart: Major Market Segmentation for the Pawn Shops Industry

  • International Trade
    Business Locations
    Chart: Business Locations by State
    Market Share Concentration
    Key Success Factors
    Cost Structure Benchmarks
  • Profit
  • Purchases
  • Wages
  • Rent
  • Interest
  • Bad debts
  • Depreciation and utilities
  • Other costs
  • Chart: Cost Structure Benchmarking – Sector vs Pawn Shops

  • Basis of Competition
  • Internal competition
  • External competition

  • Barriers to Entry
  • Table: Barrier to Entry Checklist for the Pawn Shops Industry

  • Industry Globalization
    Cash Converters International Limited,
  • Table: Cash Converters International Limited - financial performance

  • Capital Intensity
  • Chart: Level of Capital Intensity for the Pawn Shops Industry
  • Chart: Tools of the Trade: Growth Strategies for Success

  • Technology & Systems
    Revenue Volatility
  • Chart: Volatility vs Industry Growth

  • Regulation & Policy
    Industry Assistance
    Table: Industry Data for the Pawn Shops Industry
    Includes:
  • Industry Revenue (2009-2023)
  • Industry Gross Product (2009-2023)
  • Establishments (2009-2023)
  • Businesses (2009-2023)
  • Employment (2009-2023)
  • Wages (2009-2023)

  • Table: Annual Percentage Change for Key Industry Data
    Table: Key Ratios for Industry Key Data
    Pawnbroking
  • A service provided to a customer that has a saleable item that is used as collateral to gain a secured loan.
  • Payday Loan
  • A short-term and low value loan offered at a high interest rate, which is designed to be paid back with the borrower's next pay.
  • Secured Loan
  • A type of loan that uses an asset as collateral that can be sold in case of repayment failure.
  • Unredeemed Pawn
  • An item held by a pawn shop that has been lent against to a customer, and which is not collected. The pawn shop takes possession of the item and can sell it to recoup funds.
  • Unsecured Loan
  • A loan that has been provided that is not backed by an asset. These are usually provided with a high interest rate and require extensive identification checks.
  • What Our Customers Say

    Why buy this report?

    IBISWorld’s Pawn Shops market research report can be used to help you: understand market size and growth potential; major companies; draft business plans and pitch books; and conduct benchmarking and SWOT analysis. Our industry analysis highlights macro industry trends in the overall sector and micro trends faced by companies that do business in the industry. The industry report also provides key industry statistics and 5-year forecasts to anticipate future industry prospects so you can decide with confidence.

    IBISWorld industry market research reports enable you to:
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    • Identify threats and opportunities
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    • Quickly build competitive intelligence
    This report on Pawn Shops:
    • Provides Market Size information to assist with planning and strategic decisions.
    • Includes the necessary information to perform SWOT, PEST and STEER analysis.
    • Helps you understand market dynamics to give you a deeper understanding of industry competition and the supply chain.
    • Analyses key performance and operational metrics so that you can benchmark against your own business, that of your customers’ businesses, or your competitors’ businesses.
    The Pawn Shops market research report includes:
    • Historical data and analysis for the key drivers of this industry
    • A five-year forecast of the market and noted trends
    • Detailed research and segmentation for the main products and markets
    • An assessment of the competitive landscape and market shares for major companies
    • And of course, much more

    IBISWorld reports on thousands of industries around the world. Our clients rely on our information and data to stay up-to-date on industry trends across all industries. With this IBISWorld Industry Research Report on Pawn Shops, you can expect thoroughly researched, reliable and current information that will help you to make faster, better business decisions.

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