Red Swan: Do Pawn Shops Have a Future on the Internet?

Although the trend for trading-in products is increasing, online pawn shops such as Borro, Cashoon or Pfandy (German) are not having it easy. Few paint a bright future for the business model.

On this theme, BusinessWeek reported in the US on Lippencott, a company which besides maintaining an online list of pawn shops, also operates a number of internet sites where customers can trade objects of value for cash. Recently, Lippencott launched such a site for jewelry called Red Swan.

"In January, Lippincott, parent company of mail-in gold buyer GoldKit, launched a new brand called Red Swan, targeting middle-class women.

"It's a big deal for women to walk into a pawnshop and sell their jewelry—you feel evaluated," says Amy Steel, president of RedSwan.com, which buys jewelry by mail.

Business is already running ahead of projections, and Steel is noticing "a surprising influx" of large precious stones from customers. "A year ago we saw 1-carat diamonds" at GoldKit, Steel says. "Now we are seeing 3- to 4-carats" at Red Swan.

Red Swan's customers send their treasures in an insured, prepaid mailing envelope and typically are paid within 48 hours."

Unique with Red Swan are the jewelry parties (see videos).

Although not technically a pawn shop, there was a similar concept from Germany, Sparschwein AG, which doesn’t exist in the same form today.

It remains to be seen if someone will eventually find the right key to successfully adapt the traditional pawn shop for the internet age.

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Originally posted in German by Jochen Krisch, adapted for excitingcommerce.com by Jason Soo.

Comments

[Penny Stocks]

Nice topic.I really like this.

[Frank Polenose]

This kind of borrowing is expanding.
Frank @ Home Loans

[Home Loans]

I don't see why not.