In a crisis, people need money “before payday,” but banks do not lend to everyone, and microfinance organizations scare them. An alternative is a pawnshop. Investments in it can be recouped in two years, says Alexander Oleynik, owner of the “Key to Success” chain.
Focus on people
Early on a winter morning, a girl wearing Chanel boots walked into a pawn shop near the Krylatskoye metro station. The owner of the chain of 37 pawn shops “The Key to Success,” Alexander Oleynik, likes to periodically communicate with clients, so he met the visitor himself. “I looked at her boots and immediately realized that this was not our audience at all,” recalls Alexander. The visitor wanted to deposit several designer jewelry for just one day. It turned out that the girl flew to Moscow at night from vacation, and the bank blocked her card, and she needed cash to have breakfast.
Oleinik likes this story: he is trying to get rid of the image of pawnshops as establishments for marginalized people and is betting on “ ordinary people" Anyone can suddenly need money, and a pawn shop is far from the riskiest way to get it, Oleinik assures. “When people ask me what I do, I usually answer - I relieve social tension. We give money to people who sometimes have nowhere to get it,” he says. — There are different situations: for example, a man comes in, he has such a serious gold chain, we start talking, it turns out that he is a foreman, the commissioning of the project is in two weeks, and the workers must be paid today. Or a girl comes running, takes off all the jewelry, and says I need 20 thousand, otherwise I’ll die. What's happened? It turns out that there is a huge discount on shoes in the neighboring shopping center, we need to grab it urgently.”
Before pawn shops, the entrepreneur was engaged in recycling scrap. In 2009, he sold a controlling stake in the metalworking company VMI Recycling Group to the Novolipetsk Metallurgical Plant (as NLMK reported then, the transaction amounted to $28.4 million). “I was very worried - I had to do something, and the team had to be saved,” he recalls.
Why pawn shops? According to the Central Bank, there are about 7.8 thousand pawnshops in Russia. But at the same time, the market is very fragmented, and there are few large players in it. According to the National Association of Pawnshops, the key players are the Zolotoy/Gold 585 network, which has 625 jewelry stores with pawnshops (the network website states that pawnshop services are provided in each store), 585Gold with 250 stores and pawnshops (both networks were part of one company, but in 2010 its owners divided the business), as well as the Chelyabinsk chain without a retail component “Fianit-pawnshop” with 280 branches, LLC “Lombard Southern Express” (Union of Pawnshops) from Rostov-on-Don with 250 points and “Jewelry of the Urals” with more than 140. The Moscow market, which now has about 1,300 pawnshops, at that time was not divided between major players, which attracted the entrepreneur. “It’s strange to go into, for example, cellular retail - everything is already divided there, huge companies, but in pawn shops there is no such thing yet,” says Oleinik.
The entrepreneur sent his brother Dmitry (now the general director of the company) to courses for expert appraisers, and he himself went to the USA and Europe to see how pawnshops are organized there. Together with him in new business Four managers transferred from the metallurgical project.
In 2010, in Moscow, near the Skhodnenskaya metro station, Oleinik opened the first 911 pawnshop, and soon two more in other areas of Moscow.
Two in one
A year later, Oleynik already had 15 pawnshops, but four points had to be closed - they never reached the break-even level. Initially, the founder of 911 conceived it as a traditional chain of pawn shops, but realized that the business model would become more effective if jewelry trading was added to it. Since 2012, he began opening new pawn shops and equipping existing ones with counters where jewelry was sold. “Today we position ourselves as a jewelry discounter, although from a business point of view we have a more powerful pawnshop component. We’re like a hospital with two doctors—a urologist and a cosmetologist,” Oleynik jokes. Other large chains on the market operate on the same principle, says Aleksey Lazutin, Chairman of the Board of the National Association of Pawnshops. At the same time, Oleinik carried out a rebranding - the network received a new name “The Key to Success”.
The restructuring of the network helped Oleynik solve several problems at once: firstly, more clients began to come to jewelry stores with display windows, some of whom then returned for pawnshop services, and secondly, it became easier to select qualified employees who were reluctant to go for interviews in pawnshops.
The personnel problem, however, still arose: after several months of work, Oleinik realized that the expert appraiser must, first of all, be a good seller and communicator. Therefore, the entrepreneur had to fire the hired gemologists - specialists in precious stones. “We thought gemological appraisers were cool. But it turned out that they are excellent specialists in stones, but they don’t feel the market - they take a Cartier ring and say: you have an inclusion here, there is a crack in the stone, it’s worth nothing,” says Oleynik. In fact, unique designer items from well-known brands, as a rule, in any case have a high market value and sell well at retail, even taking into account minor flaws, the entrepreneur continues.
Now the company attracts people from the jewelry retail market, but sends them for a month and a half of training at its own jewelry academy, and then for an internship at pawnshop branches. The programmers of “The Key to Success” have developed their own program based on the 1C software “VGDB: Pawnshop”, which allows you to comprehensively evaluate customer products, as well as determine weak spots in employee qualifications. First, the expert enters the characteristics and displays his assessment of the product, and then the program produces its own - this allows you to control employees and track their mistakes.
Pawnshop “The Key to Success” in numbers
37 pawnshops currently have a network of up to 100 it is planned to increase their number by the end of 2018
11 thousand rubles.— average loan at the “Keystone of Success” pawnshop in Moscow, 6 thousand rubles. — average loan in pawnshops on average in Russia
46 days - average loan period
On 5 million rub. The loan portfolio of one pawnshop is growing annually
Near 8 thousand pawnshops registered in Russia
0,48% per day, or 175% per annum, - maximum amount interest allowed to pawnshops by law
Near 45 billion rubles. constitutes the total loan portfolio of pawnshops in Russia, 90% from it are jewelry pawnshops backed by gold
Source: company data, National Association of Pawnshops, Central Bank
Economics of a pawnshop
According to Oleinik, immediately after the launch he made several mistakes. For example, at first an entrepreneur was afraid to rent premises in expensive places - on the first line of houses and near the metro, and only then realized that the second line in the case of pawn shops simply did not work. “If people find a grocery store themselves, then the pawn shop should be visible and attract attention,” he explains.
Now Oleinik rents premises of 60-80 square meters for his pawnshops. m on the first line of houses. Renting such premises in Moscow costs about 500 thousand rubles. per month (on the second line, according to Oleinikov, 200-300 thousand rubles). The pawnshop employs from three to six people per shift (there are two in total) - these are appraisers, salespeople and a security guard. 5-6 million rubles are immediately spent on rent along with the deposit, payroll and renovation of the premises.
When opening a branch, at least 1 million rubles. must be put into the cash register for issuing loans, says Oleinik, and within a year you will have to report another 2-6 million rubles. - depending on the location of the pawnshop, pricing, etc. A similar amount must be invested in the retail business - 6 million rubles. will be spent on purchasing jewelry that needs to be put on display. Thus, the annual budget of one pawn shop “The Key to Success” is 12-15 million rubles.
Photo: Anton Berkasov for RBC
7-9 months after launch, a pawnshop usually forms a loan portfolio (money issued to customers) of about 5 million rubles. At a rate of about 10%, this gives about 500 thousand rubles. interest income monthly, says Alexander Oleynik. Another 1.5-3 million rubles. revenue comes from operating a store with a retail markup of 30% (jewelry is a seasonal business, revenue increases in winter, the beginning of summer is the low season). On average, after 9-12 months, the pawnshop “The Key to Success” achieves payback, and recoups investment costs in two to three years.
According to SPARK, the revenue of LLC “The Key to Success Pawnshop” (100% of the shares belongs to Alexander Oleynik) in 2014 amounted to 347.9 million rubles, 140 million was profit from sales. But at the same time, the entrepreneur opened seven new pawnshops this year - 211.8 million went to “other expenses”, and the net loss amounted to 62.6 million rubles. Oleynik also owns more than a dozen legal entities that specialize not in pawnshop activities, but in the retail trade of jewelry - Staratel LLC, Prosta LLC, Lucky Trade LLC, and others. Oleinik refused to comment on the structure of the business, but these legal entities are similar to Retail Stores at pawn shops. For example, Prosta LLC received 38.6 million in revenue and 3.9 million in profit in 2014.
Premium segment
The business model of “The Key to Success” is not entirely typical for pawnshops, Maxim Drozdov, first deputy general director of the Stolichny pawnshop, told RBC. As a rule, opening a pawnshop without retail costs much less - about 3-4 million rubles. A typical pawnshop is an armored semi-basement room of about 20 square meters. m area, reminiscent of a currency exchange office. People don’t come here because of a good life, so the owners, as a rule, save on repairs.
Oleinik took a different route - the premises are spacious, renovated, and there are chairs for clients. Some pawn shops even have facial recognition software. “This is a wow effect, you came for the second time, and the expert remembers your name,” says Alexander Oleynik. — There is “Coffeemania”, and there is “Shokoladnitsa” - our task is to become “Coffeemania”, that is, a network of pawnshops with more high level service."
The expert determines the loan amount after evaluating the product according to three criteria: metal, precious stones and liquidity. Prices for metals vary depending on their type, weight and fineness: for example, gold of the lowest, 375th standard in “The Key to Success” is valued at 870 rubles. per gram, and for gold 583/585 they give 1350-1750 rubles. Once a week, the price of gold is recalculated depending on its changes at the Central Bank exchange rate. As a rule, all pawnshops offer the client 150-200 rubles for 1 gram of 583/585 gold. less than its market value - this is enough to compensate for the risks if the client does not buy the product.
According to Oleinik, 80% of what is brought to pawn shops is “scrap,” items that have no value other than their weight. The amount varies depending on whether the client intends to buy back his item. If a person is decently dressed and claims that he is going to buy the product, he can expect a higher estimate. The expert decides whether to believe it or not; he must have the skills of a psychologist.
If a client intends to leave a designer item as collateral that may be in demand in retail, the pawnshop will most likely accept it at a price significantly lower than the original price. “For example, you bought a new ring for 100 thousand rubles, the expert estimates that it can be sold for 60 thousand, which means we can offer you 30 thousand,” says Oleinik. “Jewelry is not bread, it has a turnover of 6-8 months on average, so the markup is 100%.”
Interest rate for a loan at a pawnshop is from 10.2% per month (122.4% per annum) for loans over 30 thousand rubles. up to 12.9% per month (154.8% per annum) for loans below 10 thousand rubles. This is an order of magnitude higher than bank rates; according to the Central Bank, as of February 1, the average rate on loans up to one year for individuals was 23.65% per annum. But it is also much lower than the average rate in MFOs - for loans up to 30 thousand rubles. for a period of up to a month, according to the Central Bank, it is 614% per annum.
According to Alexander Oleynik, out of 100 borrowers, about 20 clients who pawned “scrap” do not return to the pawnshop. Among designer items, the non-repurchase rate is lower - only 10%.
Designer items that did not wait for their owner in the safe are sold in the auction room of the pawnshop at public auction or go to retail sales. “Scrap” is sold wholesale to jewelry factories or sent for processing under a tolling scheme (according to Oleynik, “The Key to Success” cooperates with 8-10 large factories, including Sokolov and the Bronnitsky Jewelry Factory). The cost of processing ranges from 100 to 300 rubles. per gram depending on the type and complexity of the product. In return, the managers of “The Key to Success” order new jewelry from the factory of the required weight and quality, which is then supplied to its jewelry stores.
“It is a myth that pawnshops make money from unredeemed collateral. We rely on interest income here; it is beneficial for us that borrowers return,” says Oleynik.
Live to see payday
During a crisis, the demand for pawnshop services grows - people are fired, their salaries are delayed. According to Lazutin from the National Association of Pawnshops, in 2015 the total portfolio of the pawnshop market increased by 70% and reached 45 billion rubles. But in Lately Numerous microfinance organizations actively compete with this business and distribute money without any collateral. But pawnshops have their advantages - their clients do not risk falling into debt bondage. There are no sanctions for overdue loans; a person simply loses his collateral, but is guaranteed not to encounter debt collectors and not ruin his credit history.
The development of pawnshops is hampered by the poor image and opacity of their business. Many people believe that pawnshops mainly sell stolen items. “The decoration cannot be verified - it’s not a car with a serial number. But people who deal in stolen goods are not idiots either. At the pawnshop they are asked for a passport, there is video surveillance, in which case all traces are preserved,” says Oleynik. According to him, the police turned to “The Key to Success” only a few times and mainly in domestic cases - for example, when a husband took an item from the house without his wife’s knowledge.
The second problem is that people don't understand how their products are priced. “Customers don't sell jewelry every day. You know how much a package of kefir costs in the store, but you don’t know how much your ring costs,” says Oleynik. Therefore, the experts of his pawnshops are obliged to explain to each client point by point what the price of a particular product consists of. According to Oleynik, 70% of the clients of the “Keystone of Success” pawnshops are regular ones. And there is even a loyalty program for those who periodically use its services. The entrepreneur’s plans for the next two to three years are to expand the network to 100 pawnshops.
Recently, the number of pawn shops has been growing steadily. This is not surprising - after all, in a pawnshop you can get money very quickly and easily. There are no guarantors credit history and so on. And the item pawned at the pawnshop may not be returned if there is no money. In this case, there will be no calls from the bank regarding the loan, lawsuits or debt collectors.
A pawnshop does not require many employees, does not require a license, large premises and a lot of special equipment. This business attracts people and more and more entrepreneurs are thinking about how to open a pawnshop. It is not very difficult to do this if you have enough money, but you need to thoroughly study the information about what is needed to open a pawnshop.
Price issue
Anyone who is interested in how to open a pawn shop first of all wants to know about the costs of this type of business. The cost of opening a pawnshop cannot be clearly calculated. Everything will depend on what type of pawn shop you choose. Today there are, for example, car pawn shops. It is clear that a car is not a cheap thing, and even a million rubles will not be enough to open such a pawnshop.
But we will not focus on car pawnshops and will look at classic pawnshops. By them we mean pawnshops that accept only jewelry, or, along with jewelry, watches, furs, leather, Cell phones and other equipment. In this case, opening a pawnshop will cost you at least a million rubles.
Where to begin?
Of course, the first thing you need to do is study the market, study competitors. How many pawn shops are there in locality? How are they located? What are their operating hours and what do they accept?
You may find that there are very few pawn shops in your city or area that accept electronics and appliances. And this will help you determine the specialization of your pawnshop. It is possible that most pawn shops are only open on weekdays and not 24 hours a day. In this case, if you open a 24-hour pawnshop that will work seven days a week, you will only benefit.
In other words, by studying your competitors, you can come up with the most profitable terms for your potential clients. Without this stage, when opening a pawnshop, you will be nowhere.
You can, of course, entrust the conduct marketing research professionals, if you have extra money for it. Each such study is individual, and its cost cannot be determined unambiguously. But in the case of pawnshops, the cost is unlikely to be below thirty thousand rubles.
Based on the research, you need to decide on the type of pawnshop. Think carefully about what you will accept from the population. In general, this can be any liquid item.
After this, you should write a business plan for the future pawnshop. You can do this yourself if you don’t want to give away the extra 20 thousand.
Pawnshop is a type of business that is distinguished by its specifics and an entrepreneur needs to successful work have a good understanding of the activities of such institutions. During a crisis, people often turn to a pawnshop to get the funds they need to live or to pay off loans and debts.
Therefore, the turnover of pawnshops is increasing, and at the same time the number of establishments opening is growing. According to statistics, up to 200 such organizations are registered annually in Russia alone. How to open your own pawnshop from scratch? The answer is in this article!
A pawnshop is an institution that issues loans to the public secured by valuable property of the client for a certain period. The interest rate on the use of cash by clients is set independently by the pawnshop (in Russia it is prohibited to exceed 25%).
The advantages of opening a pawnshop are accessibility and high profitability. It is impossible to answer unequivocally whether it is profitable to open a pawnshop. This is influenced by a number of factors:
- selected location for the pawnshop;
- rent amount;
- advertising effectiveness, etc.
A pawnshop located in a busy place with high traffic (next to hypermarkets, shops, shopping centers) can count on more successful activities, although this is not yet a guarantee of a stable income.
The location in the center has disadvantages:
- high rent;
- more competition;
- When deciding to pawn an item, a person tries to find a pawnshop not far from home.
It is necessary to determine for yourself the type of activity and find out how relevant the services offered are. Before organizing a pawn shop, you should study necessary costs, take into account the risks and the amount of possible income. Drawing up a business plan with preliminary calculations will allow you to estimate the amount of investment and the payback period.
The greatest liquidity is represented by jewelry, but clients often pawn furs and household appliances. Storing clothes comes with its own challenges, and Appliances becomes obsolete quickly, its value is lost.
Choosing premises for a pawnshop
It is not always the case that premises located in the city center bring more profit than those located in a residential area. It is recommended to choose a pawnshop on the first or ground floor (the entrance from the courtyard is not suitable).
The room (area from 40 m2) must meet the requirements of the sanitary-epidemiological and fire services.
It should be noted that a pawnshop that issues loans secured by antique items or equipment requires a separate room where things will be stored. A car pawnshop requires a parking lot and, as a result, the cost of renting it will increase.
Before opening a pawnshop, you should prepare the following documents:
- cash book;
- job descriptions;
- employment contract forms;
- order of prices for gold;
- order on the size of bets in a pawnshop.
An additional amount (10 million rubles) is needed to provide loans to clients. Monthly expenses will be:
