In defense of bottom feeding...

I had mentioned the show Pawn Stars a few days ago to a coworker, and he grumbled something about how he hated the store owners on the show because they usually make lowball offers to people selling them stuff - people who often desperately need the money.

I like the show, but I also see a little of myself in the main characters. If you've watched the show, they will often get an estimate from a pro of what something is worth. The person selling the item will then ask for close to that value, and the owners will usually offer them about half. He'll usually point out that the top value is usually what it would fetch at an auction, which would charge a serious commission, that he's got to pay the costs of running a store and still make a profit, and that he may have to sit on the item for a while before a buyer interested in it comes along.

I'm pretty sympathetic to these arguments. And if you've watched the show enough, there are times he's gotten burned - bought something that turned out to be unrepairable, or not sell-able, or stolen.

The way I see it, what he offers is liquidity - cash on the spot, hundred dollar bills. Sure, you could get more on eBay or at an auction, but that takes work. eBay isn't too hard once you get the hang of it, but there is a learning curve if you've never used it, and people are reluctant to buy from someone with no feedback. There are also a ton of ways to get ripped off if you don't know how to protect yourself as a seller. And auction houses and consignment sellers charge heavily - I was surprised when a faculty member at work asked me about selling some stuff on eBay for him - and told me that he had previously used a consignment store that charged 40% of the selling price.

Maybe I'm just rationalizing, though. The thing is that I've bought plenty of things at estate sales and auctions, yard sales, bankruptcy and going out of business auctions, and otherwise profited off people's bad fortunes. But it's not like my actions caused the death of the lady whose Onkyo receiver I bought from her sister for $3 and eBayed for $55, or caused the criminal actions of the bankrupt nonprofit whose 8 rack-mount servers I bought for $5 each and resold for $75 - $150 a piece. The way I see it, I'm offering liquidity, giving individuals and creditors money for something that they otherwise wouldn't want. And I take my share of risk - I've bought tons of stuff that turned out to be broken, missing parts, or not worth what I thought. I've also bought plenty of stuff that turned out to be harder to sell, including a new in box APC rack mount UPS for $250 - despite the fact that it's normally an $800 piece of equipment, it's still sitting in my basement because I haven't found a buyer yet, and it weights a metric crapload.

Pawnshop owners and eBayers might benefit from people's mistakes or bad luck, but they didn't cause it, and they perform a necessary function in converting assets into cash. Much like debt collectors and repo men, they perform a function that isn't always pretty, but is essential to the economy.