Selling used goods in a new world

(One aspect of the business that hasn't changed is the reluctanceof pawnbrokers to talk about their business to the media. Only two-- Winskill and Centretown Pawnbrokers' Ken Keane -- agreed to beinterviewed for this story.)
"To me, the big crunch has come in the last year with all theChinese products coming in," Winskill says.
The flood of relatively inexpensive Chinese goods has not onlyforced major Canadian retailers to offer frequent and steepdiscounts, it has also literally knocked the legs out from underthe market for used goods.
"There's no value in the used market any more. Nothing's worthanything," Winskill says.
He points to electronic items such as "television sets, stereos,speakers, ghetto blasters, VCR(s) -- they were the mainstays of theindustry. People used to pick up a used black-and-white TV for thecottage. Now those old TVs aren't worth anything, which is why Idon't take any," he says, waving his hand at his shop's shelves,lined mostly with power and hand tools.
"It's not complicated. Take a look at a digital camera, forinstance. Buy a new one and within 30 days, it's obsolete.Computers are exactly the same. A lot of new stuff is not designedto be repaired -- you throw it away and buy a new one," he says.
Ken Keane, who has been in the business "almost 20 years" and isproprietor of Centretown Pawnbrokers, 665 Dundas St., agrees thatmassive imports from China and the bewildering blizzard of newinnovations in electronics have knocked the stuffing out of thevalue of used goods.
"When we first started, there was stability in the items wecarried, like VCRs. They had a certain value. Now they're onlyworth half as much," Keane says.
But not all electronic products are affected to the same degree, heinsists.
"I'm 59 and I'm really lost in some of this newer stuff," headmits, so he relies on his son, Greg, 31, and a 23-year-oldemployee to keep him posted on prices, popularity and trends.
"We do a lot of very intensive research on the Internet," he says.
"We still do a fair volume in TV sets and electronics. People whobring in (computerized) game players are very loyal to favouriteproducts. There's a strong following there -- they want to gettheir game players back," Keane says.
"And the demand for guitars has been so high that I have had to buynew product just so I'll have something to put on the shelves."
Keane estimates that 65 per cent of his business is in jewelryloans, with the balance in video games, TVs and tools.
In Keane's view, apart from the pledge/loan business, "we're allsecond-hand dealers. About 85 per cent of our business is in loansand 15 per cent basically in goods that have been defaulted, plusany we pick up through dealers in what we call buy-sell."
Reflecting on the differences in focus among pawn shops, Keanenotes that tools are one of the few common points between his pawnshop and Winskill's Third Street business.
"Construction is a very difficult game, full of ups and downs," sotradespeople often scrape through hard times by pawning expensivepower tools, Keane says.
Both men said they adhere strictly to the Pawnbrokers Act, whichrequires them to keep complete records on the identity of buyers,serial numbers of goods, etc., and report them daily to police orrisk losing their licences and facing criminal charges if stolengoods are found in or traced to their shops.
"Less than five per cent of all stolen goods have been fencedthrough pawnshops," Keane says, but adds, "there are a few in thisindustry I do not associate with."
Keane says what he witnessed while working in another pawn shop inhis first three years in the business influenced him profoundly. "Isaw some people get treated very poorly, so when I opened mybusiness I made it a point to treat everybody fairly."
Keane thinks this approach has built him an invaluable reputationin the city.
"Just recently, one of my clients rode his bicycle all the way fromByron just to deal with us," he says with quiet pride.
"There has been a bucketful of changes in this business," saysWinskill, as new competitors have moved in to whittle away atpawnshops' customer base -- the poor, working poor and a shrinkingmiddle class.
"For years, we were like the fat ladies' store -- people who neededus knew where to find us. People who own Rolex watches don't go topawnshops. But 90 per cent of the people who came to Canada werenot wealthy -- their wealth has been accumulated over many years."
Because banks abandoned the small-loans business, people went tofinance companies. Then that source of small loans dried up andpawn shops reappeared to fill that void. Now they are being elbowedaside in a whole new economic order, Winskill says.
"Canadian Tire is into insurance and mortgages. Wal-Mart is sellinggroceries. We don't know where we stand," he says.
"There's competition now from all those new cheque-cashing stores.That takes away some of our clientele . . . There are reversemortgages for senior citizens. That takes away some more of ourclientele. And the middle class is disappearing.
"I don't think there's a real pawnshop (in the traditional sense)left in London," he says.
"We all do as much business in second-hand articles as they do aspawnshops."
But Keane disagrees with much of this.
"We serve all kinds of people from every economic group," he says,adding that "maybe a touch over 50 per cent of the people we dealwith are women," especially when it comes to jewelry.