THE BAD DEAL…
Pawn shops are a no win for sellers
”… My second-hand watch is worth R2000 but I got R500 for it”.
Every time you pawned an item, the “Cash Crusaders”, the “Cash Converters” and other pawn shops have given you the bad deal. They understand how basic human behavior works. When you sell a personal item it is likely that you really need to get your hands on that cold hard cash. This alone puts you in a weak position when we head over to the negotiation table. At Mabopane Online the seller has more power than that.
The aim of this article is not to paint pawn shops in a bad light. It is to highlight the challenges that sellers are faced with when selling items at pawn shops. There are valid reasons why the customer does not win when selling items in a brick and mortar pawn shop.
Pawn shops use an old business model
The problem lies more with the old business model that these shops make use of than with bad people who just want to cheat us out of our money. And yes… there are advantages to this model too, you decide to sell your item today you most likely get that money on the same day, but at what cost?
There are significant risks that the “Cash Crusaders” and the “Cash Converters” of this world have to take on anytime they buy an item from a seller. The first one is there is no guarantee on the part of these companies that another person will walk in and buy that R2000 family heirloom watch you just sold. It is possible someone will come in after you sell and buy the watch but it is not guaranteed.
This is problematic because businesses do not operate that way. Businesses do not operate on possibilities. It is not a possibility that the business will have to pay rent come month end. It is not a possibility that employees will expect their salaries to be paid in full and on time. These are all guarantees. Franchise royalties and other expenses are guaranteed to have to be paid at the end of the month.
Bad as it may sound, do not worry because It is not all doom and gloom. These are some of the largest and most successful companies in the country we are talking about here. They have been doing this for years. Of course they have mitigating plans put in place to limit risks of this nature. One of these mitigating plans is to buy items at the lowest possible price from customers looking to pawn or sell.
Another risk pawn shops take on is, not only do they have to resell your item but they have to get more for it than what you are selling it for. Like any other business the basic aim is to make as much profit at the lowest cost possible. At Mabopane Online we “cut out the middle man”.
There is no agreed standard for pricing second hand items.
Pricing pawned items, new or old, is not an easy task. There is no objective way to value and price these items. They come in different shapes and sizes, various levels of wear, tear etc. As established businesses, pawn shops are allowed to value your item in a way that does not have to make sense to you the seller. You are never forced to sell, of course, but can you really afford not to sell when you need cash urgently?
Whilst there are valid reasons for these shops to bring your item price down as low to the ground as possible it is still very painful when you get less money than what you know your item is worth and you are somewhat forced to take it because you are not in your best financial position at that particular time.
Mabopane Online offers better services than pawn shops
We have introduced Mabopane Online to help sellers in Mabopane and immediate surrounding townships to help eliminate this problem. At Mabopane Online the seller interacts directly with the end-user and thus has the power to decide and negotiate what price his or her item goes for. A win win situation for both parties.
FAILING TOWNSHIP BUSINESSES…
It has become a norm for many in township areas that whenever we buy groceries, clothing, furniture etc that we go to the big famous shops like “Shoprite” and “Pick’n Pay” because they are what we are know. They have big marketing budgets and are therefore what we see everyday on Television, newspapers, billboards and basically everywhere else.
This suffocates and pushes out small-time sellers, the life-line of our economy…remember?. We end up with a monopolized economy in the country which has firm roots in our townships and rural economies. Price collusions become the order of the day and at the raw end of the deal is people in the poorest communities.
Why we need small business to succeed
Small businesses are the life-line of our economy. How many times have you heard that? A lot we would imagine. The ease of doing business is crucial in determining the success or failure of any business. Before the establishment of Mabopane Online, this had been a severe problem for small local businesses.
An article on www.iol.co.za indicates that In 2014 only 37% of small businesses survived their fourth year of commencing operations. The numbers are even lower at year 10 with only 9% making it.
According to Gideon Nieman in his book Small Business Management: A South African Approach (2006), SMMEs in South Africa have become an important focus for policy makers because:
- The labour-absorptive capacity of the small business sector is higher than that of other size classes
- The average capital cost of a job created in the SMME sector is lower than in the big business sector
- They allow for more competitive markets
- Can adapt more rapidly than larger organizations to changing preferences and trends
- Often use local resources
- Provide opportunities for aspiring entrepreneurs, especially those who are unemployed, under-employed or retrenched
- Workers at the smaller end of the scale often require limited or no skills or training; they learn on the job
- Subcontracting by large enterprises to SMMEs lends fertility to production processes
- They play a vital role in technical and other innovations”
Mabopane Online is Pro small business
There are small scale sellers that offer better value for money products and services but if they cannot market themselves then unfortunately they do fall into the abyss. At Mabopane Online we will always enable small businesses to reach thousands of potential customers quickly with just a few clicks of a button. We promise that Small local business will be able to advertise on Mabopane Online for free forever.
Mabopane Online helps increase the ease of use that local businesses can reach potential customers with. For example, as a Plumber in Soshanguve the chances of someone in Mabopane getting to know and buy your services is very low. The same is true for someone in Mabopane looking for customers in Soshanguve. The Logistics or transportation requirements are just too much of a challenge for either of us to do business. Therefore this becomes another potential business opportunity lost.
WHERE DO I FIND THE JOB POST…
People have grown tired, unemployment is high but often times when local job opportunities arise there is no trusted place where they can search and apply for these jobs. This is especially true for temporary construction jobs like the recent construction of the “Mabopane Square”. We saw this again when the “Shoprite Usave” store next to Leebanon and Beirut was opened. There was a community strike because of the lack of local employment opportunities.
The “Mabopane Square” shopping center was launched in late 2019. It has helped the local community access many of their favorite franchised stores easier by bringing them closer. Employment opportunities have been created both during the construction and after.
While many celebrate the undeniable opportunities this business complex has brought, others are not so much keen. Those against it argue that it takes the little liquidity or cash flow that is left in the township economy and takes it to the already uber-wealthy of the country.
Mabopane Online is pro local jobs
Another function of Mabopane Online is jobs. We have made it simple to post jobs and we urge recruiters and or employers to make use of this site to reach potential employment candidates in and around the Mabopane area for free.
Unlike other big classified sites like “OLX South Africa”. Our focus is only on servicing township communities in an around Mabopane. This has significant advantages for users. It is more secure and affordable to transact with people from a nearer area of residence as yourself than with someone far away from you.
Mabopane Online is not the solution to all our community problems. It is also not meant to “change the world”. We do however believe that if we manage to get just 1 customer to complete a sale at a small-scale business, that they would otherwise have not, that we would have made a positive contribution to our community.