Yigal Adato: 00:04 Hey everyone, my name is Yigal Adato and this is the Pawn Leaders Podcast, a podcast to help you make more money,stress less and live an epic life all while working at the pawn shop. Hey pawn family, welcome back to another episode of the Pawn Leaders Podcast. For those of you who have joined us in the Facebook group of Pawn Leaders Podcast Community, thank you so much and if you haven't, please go ahead and join us.Super great group, lots of engagement and we also have the guests of the show in that group so you can ask questions to them after the show. My next guest who many people have said, you have to have this person on. He answers every question in almost every pawn group there is out there is Jamie
Smith and after leaving the world of banking, Jamie and his wife Amber started the payday advance in check cashing store,
which grew two locations. At the same time, they also started an Ebay business, selling coins and bullion, which eventually
grew into one of Ebay's more successful retailers in that category. Achieving titanium top rated seller status. In April of
2013, they launched their first pawn store opening Allied Pawn excuse me, in Dubuque, Iowa. The business has flourished and
customers had been rolling in ever since. Over the last 10 years,Jamie has learned from some of the top pawnbrokers, jewelers,
coin dealers and marketers in the world. He has taken the knowledge and developed his own unique approach when
navigating the pawn waters and has been able to grow as sharp into one of the most successful pawn stores in the Midwest.
Jamie, thank you so much for coming on the show. Welcome.
Jaimie Smith: 01:43 Thanks for having me Yigal.
Yigal Adato: 01:44 Welcome. So you've only been in the pawn business for almost
five years now.
Jaimie Smith: 01:50 Yes, you're correct.
Yigal Adato: 01:50 So, you're fairly new. So, give us some background of, I kind of said some of it in the bio, but tell me how you went from like coin and bullion and jumped into the pawn business.
Jaimie Smith: 02:01 Well, 2012 rolls around and I kind of saw what was happening with Payday Advance and Payday Advance is paying the bills and the coin business was taking off. But then gold kind of took a hit around then and we were kind of frantic. My wife and I are like,what are we going to do? We're just kind of treading water here and Payday Advance and things were happening on the regulatory front that I was worried about the coin business wasn't quite what it was up until the years prior when gold started dropping. So, we had to come up with something and naturally we started looking at pawnbroking and thought this is a great fit. I mean, we know coins and gold, we know a little bit about that stuff and we know small dollar lending. So, we thought to ourselves, well, the government has never going to be able to tell anybody that they can't get a loan on their ring.So it was a natural fit for us.
Yigal Adato: 02:52 Nice. So before we jump into more questions, I want you to tell
the listeners kind of what the laws are in your state. So how much you charge interest and what are the hold periods?
Jaimie Smith: 03:02 We have no law. We operate under a city ordinance. We have a five day hold on buys. So, and that's just the precious metals,other stuff we can flip very fast, but we generally charge about 25%. We're the lowest in our city at 25% and it works out pretty good.
Yigal Adato: 03:21 And what is the pawn hold period?
Jaimie Smith: 03:24 There is no mandated pawn hold period. We hold our loans for 30 days.
Yigal Adato: 03:28 Wow, okay, nice. So, you're at the states that has no laws
essentially mandating. So, you mandate yourself to be competitive, right?
Jaimie Smith: 03:36 Yeah. And that can be a good thing or a bad thing depending on who you ask.
Yigal Adato: 03:41 I'm sure, I'm sure. Well, I come from California, it's super low
interest. Everything has a law, there's consumer friendly. So it's good to see somebody has a little bit more space to do what they can to help the community.
Jaimie Smith: 03:55 Yup. Definitely.
Yigal Adato: 03:57 Awsome. So, tell me about something, your name came up when I spoke with people about being on the show and they said essentially Jamie knows something about everything. Your at the Pawn Leaders Podcast group. You chime in about social media. You chime in about SEO, about coins, about bullion,about Ebay, everything. So I thought why don't we wrap this whole thing in a package and kind of talk about like the five tips to growing your business and how you guys did it successfully.
Jaimie Smith: 04:26 Well, I would say number one, the support that I have from my wife and for my family has been tremendous. My father is very successful in the commercial real estate world. So, I had an advantage going in. But number one, I'd say seeking out of a business mentor similar to someone like my father. But luckily I had tons of mentors in the pawn business so too many mention here. But number one is just seek out somebody who knows more than you do. And I know people think that I know a lot,but everything that I know came from someone else and I really got to give credit to all those guys that were out there. Number two, I would say in the pawn business, just be willing to say yes.I'm a payday guy so I have a higher risk tolerance than maybe some pawnbrokers do. So, we say yes at our shop to more things that other, that other pawn brokers may not say yes to.So, that willingness to work with the customer and if you got to take that stuff to goodwill at the end of the year or the mission or wherever you need to donate, to get rid of it, that's fine. But say yes more often. Number three, I would say seek out some more of your affluent customers. Find out who they are. And that's a very fast way to grow your loan balance just get some big guys and kind of get big guys and girls. Get in those circles where those people exist and where they operate and learn and get to know them and then have them refer other business to you. And that's how you get the good jewelry and the bigger coin deals and stuff like that. Number four, strong marketing,obviously SEO, search, social, know how to do that stuff. And I've found ways to make to be able to do that and do it more affordably than just hiring big name firms and throwing five or even six figures out at like some companies do. There's ways that you can do that very cost effectively in the small business world. Number five is just be willing to sell that merchandise and get rid of it and move that stuff fast. Work with your customers and get rid of it.
Yigal Adato: 06:37 Nice man. So, I want to talk about the first one, you have mentors. I think that a lot of times in the pawn industry, people they might say or they might think, oh, you know, if I ask a pawn broker, they're not going to tell me. But you came into the industry, I'm going to guess you went to some conventions, you hired consultants and people gave you the information that you needed to become successful correct?
Jaimie Smith: 06:59 That's correct. And what a lot of those people who we had early on or as mentors, they challenged me to think differently about the business too and that's critical. One thing that I see playing out on some of the chat boards that we're on, it's just people shut down about certain products. I only want to do guns only or I only want to do jewelry only or I don't want to do this or that and then when the dynamics change I guess in our country and these forces that exist and now it becomes harder to do some of those kinds of things our market forces take over, then it really becomes problematic for them because now that stuff isn't coming in like it used to. And they have to navigate those
waters and decide what do I want to do with my business? Do I want to go in a different direction or what? And then they're
frantic because now I have to learn something different.
Yigal Adato: 07:49 And so I agree. I think that thinking differently is what I always
speak about. I think it's important, especially where we are in the pawn industry today and if you don't think out of the box, if you're not thinking differently and shop is going to close up,you're not going to have the business that you really want. So,very cool man. Let's talk about one of the other ones, marketing to the affluent. When you talk about that, how are you marketing to the affluent to get these big loans to come in?
Jaimie Smith: 08:16 Just really targeted advertising toward them. I've done some things and print belonging to some clubs and some organizations locally to go out and just shake the hands and press the flesh with the right people and not being afraid to talk to your bankers, their trust departments. Trust and estate lawyers are huge. I mean they're going to send this kind of stuff your way, especially when it comes to buying better goods. So,they're out there. You just kind of, it's one of those things where once you get in good with hopefully one of them, you can kind of say, well here's my card. If you don't have anybody else that I can help, by all means send them their way.
Yigal Adato: 08:55 Yeah. One are the these that me and Morris did back in the day was we reached out to the Bail bondsman around your their and just say, hey, you know what if people need at 10% down,which is what the state of California does, if they need the 500 bucks to 250 bucks to bail somebody out, send them our way.And vice versa and it worked out. We got some business from it.So, I love that. You've got a market, that wasn't an affluent thing, but you have to market to different types of people as opposed to just waiting in your shop for them to come in.
Jaimie Smith: 09:22 Yup. There's a great book out there, I'm sure you're probably familiar with the Kennedy Glacier School of Marketing, Dan Kennedy. There's a book out there where it's the No BS Marketing, they offer one. And he has a whole series of No BS books, which are just phenomenal business books that I've mentioned those several times in those chat boards at.Everyone just scramble books from those series and read them.
Yigal Adato: 09:42 So Dan Kennedy's no BS, right?
Jaimie Smith: 09:45 Yup. Correct.
Yigal Adato: 09:46 Yeah, Dan Kennedy, I've heard he's a genius. I've read one of his
books. [Crosstalk] called the question. So yeah. Great man. So,social media, a lot of in our chat group you are consistently
talking about SEO and social media. I'm a big proponent of it.I'm a big believer that you have to create great content. You have to find out your customers, you have to spend money. Like I believe that the person who spends the most money and does
it well gets the most business. So, what are you doing right now on SEO and social?
Jaimie Smith: 10:23 Well, I look at that a little differently. I used to spend a ton of
money on SEO especially from an ecommerce businesses and it was great. I get all this traffic, but you have to look at is it
converting, is it actually working? And that's the key. I mean,you can go out and blow five figures, five or six figures on SEO or even seven figures if we wanted it to very easily. But what I've done is I've managed to learn how to outsource that. And I have a lot of firms that I deal with over in India and sometimes the Philippines that do that for me. And I can do it at a fraction of the cost that I came with the US firm and frequently what happens when I speak at events and I did a seminar on this awhile back at the Midwest Convention, I did one at pawn expo as well, and there's usually three or four people in the audience would get very upset about that, that the fact that I outsource things and I have to tell them, well yes I get it done cheaply overseas and it's cheaper than hiring an American firm. But that allows me to employ more Americans here locally and pay them a higher wage, which is what we do. So, from an SEO standpoint, I know we talked about this in your chat room. YAKS has been huge for us getting on those directories and putting us on the map early YAKS was crucial to us, especially when we first opened because we had zero SEO attraction. So, I think it was under $500 I was able to put myself on YAKS very quickly and quickly pushed us up the rankings.
Yigal Adato: 11:43 Yeah. And when I say spend money, I don't mean blow it without the knowledge of what's going on. I think it's if you do it intelligently and your converting those leads, just like on Facebook advertising or on the SEO. We used to outsource to India as well. It was a fraction of the cost and we were number one in almost every single keyword we wanted over 25 keywords and it helped us a ton, a ton.
Jaimie Smith: 12:11 I agree with that. Cool.
Yigal Adato: 12:11 Let's, talk about something else. Let's talk about like the, you
said that you don't say no to anything. So you do like coins and bullion, you're still in that business?
Jaimie Smith: 12:18 Yes, absolutely. Yeah. We have our coin dealership here that it kind of exists in the back and that's pretty much what I do all day. And my wife kind of runs everything out front. She's kind of the face of our company because she's much better looking than me, but she kind of handles the tactical things out front day to day with our employees. I'm in the back, I spent a lot of time moving coins and bullion and working in that space cause it's still my thing. So I love it.
Yigal Adato: 12:43 Awesome. And then, another you mentioned to me before was politics, like you helped in your state association, you're very involved in all different types of associations. Tell me why that's so important to you to be involved politically.
Jaimie Smith: 12:59 Yeah. Well like my good friend and mentor, Greg, thanks from,will tell you, being involved in politics is insurance. You have to be involved in these things and frequently what happens, we see in these states that these laws just get dropped on people almost like a ton of bricks. And then they want to organize after the fact and say, well, we need a state association. Well, you needed a state association 10 years ago. Some of us here in Iowa are talking about that. We know that we've had some pawn laws actually proposed here locally and nothing's happened yet luckily. But it's just a matter of time. I mean,pawn brokers, the reality of it is we're easy to pick on. We're kind of low hanging fruit because there is still that stereotypical Hollywood image of us out there. But luckily that's changing.
Yigal Adato: 13:45 Yeah, I agree with you. I think getting involved is insurance and complaining after the fact of not being involved is just not right.You can just get involved from the beginning, know what's going on. If you want to make changes, join the board of the association that you're with and make the change. That's right.
Jaimie Smith: 14:02 Yup, absolutely. And then NPA membership but I think is essential. And then if you do have a state association, get on it,get it going, I mean we were able to do that in Payday and get things moving and it does have an impact for sure.
Yigal Adato: 14:15 Nice man. Great. I wanted to mention that we talked about in the pre-chat a couple of things. One, you said that you stay up at night and you read and you consume information and I think that's what every pawnbrokers needs to start doing, if they don't, they need marketing information and they didn't like the No BS book. How to do business differently, leadership books.What got you to the point where you said, I just need to read and consume and knew that was going to create success for you?
Jaimie Smith: 14:47 Well, I just kind of determined to myself if I'm going to be in pawnbroking I most need to get a college degree and then I need to figure out what every angle is and how to make our shop more successful and help develop our employees and just do things right and the information is out there. You just have to find it. There's just stuff all over the internet. There's books everywhere. Learning about jewelry, learning about watches,learning about coins. It's not just knowing the right people.There's a lot of academic information out there. You can just
Yigal Adato: 15:18 So what are two books that you would recommend right now to the readers apart from the No BS one that really made an impact in your store and created more success for the bottom line?
Jaimie Smith: 15:32 Les Gold's book without a doubt. Les is somebody I look up to,
he's almost like a grandfatherly figure to a lot of us. And I went up there last year and hangout with with him and Les and
everyone up there and learned a lot from him, get Les' book. It's very inspirational. Way second book.
Yigal Adato: 15:56 Just usually we want, it's called for what it's worth, right?
Jaimie Smith: 15:57 Yes, yes.
Yigal Adato: 15:58 Alright so, For What It's Worth: Business Wisdom from a Pawnbroker by Les Gold.
Jaimie Smith: 16:02 Yup. The second book, which is unfortunately out of print would be from my good friend of mine Steve [Incomprehensible], has kind of left the pawn world but his pawn shop advisor program just laid it all out for us and I read it before we get into pawnbroking and it kind of made sense once I was in pawnbroking for a year, I read that book every year and I went back to it and I wish, Steve, if you're out there listening, please come back to pawn. He was a great guy,
Yigal Adato: 16:30 Which I get a hold of him to get on this show because a lot of people have mentioned his name. Nice man. So Les Gold and Steve Gropnik and you just said something that I agree with and I think that everybody should do. You reread the books every year, so I'm sure you get like different golden nuggets out every time you read it or it just kind of refreshes your memory or you put something into action.
Jaimie Smith: 16:54 Yeah, I mean, refreshing that memory is huge. It's almost like a,here in Iowa,obviously we're all farmers, so you got to plow that dirt again. You got to bring it back up and get that soil rich again. It'd be able to grow again, so constantly tilling and bring things back up to the surface. And that helps you to not get burned out your business because you're going to go back to some of those books or some of those things you read and you thought, I know I was doing this at one time. This happens to us everyday in our shop. I go around, I think we've kind of lost touch with some of the basics and some of the things that we used to do. And we've got to do those right. I constantly try and
reinforce that in my people.
Yigal Adato: 17:30 Nice man. I love the retailing metaphor. That's awesome.What's the biggest mistake you feel you've made in the five years in the pawn business, but you look back and you say, if anybody's listening don't make this mistake.
Jaimie Smith: 17:44 Initially when we started, I think we had that old school thinking of buy low, sell high, and sometimes we have a tendency to even go back to that. We forget that we're there to loan money to our customers and that's our primary core business. I see that all across the nation. We have a tendency to always revert to how cheap can I get that thing or what's going to happen if it comes out of pawn and I'm going to be stuck with it. So, that's
the biggest mistake that we still make day to day and I guess it's human nature, it's hard to overcome that.
Yigal Adato: 18:17 Yeah. How how big is your team?
Jaimie Smith: 18:20 Uh, right now we're up about 14.
Yigal Adato: 18:22 14 employees. And so, what do you do to create a bit of culture for them and to create a better leader in yourself and your wife so those people are happy and they're keeping the customer happy as well.
Jaimie Smith: 18:34 We keep it very relaxed here. I would say my wife has more kind of a friendly mama around here then my employees get along with her sometimes better I am. I'm of the guy who has to come in there sometimes and be the mean guy every once in a while and say, hey guys, come on, let's get back to it. But we keep things very relaxed around here and that helps us to relate to our customers as well because our customers see that we're having fun and having fun as most important thing and then obviously rewarding them monetarily whenever we can. When we have a good year, we'll drop a nice size check on them,especially around Christmas and say, hey, thanks for getting it done.
Yigal Adato: 19:13 So at the end of the year, just to reiterate that you look at your profit and you say, hey, I made so much more money, I hit my goals. And it's because of these employees, these team members. So you'll incentivize them and give them a bonus.
Jaimie Smith: 19:25 Yup, absolutely. Almost like a profit sharing system. We do pay out bonuses weekly anyway through our commission structure,but for some of our people who are just really, really hitting it and who are there for us and who show up every day and I'm not having issues with as far as calling in sick or being late and stuff like that, people kind of our core group who are there for us and have our backs, I'm happy to write them a check every Christmas to say, hey, thanks for doing it.
Yigal Adato: 19:48 You've got your hands in a lot of pots, coin and payday and pawn and all that type of stuff. Where do you think the pawn industry is going in the next five years and what does that pawnbroker have to do to stay up with the times and still be successful?
Jaimie Smith: 20:03 Well, I would say we've gotta be very careful because we're in a state of flux, like I said, politically, there some things going on that are kind of existential threats to the pawn business. So, you
have to be aware of those. And that's why I really think being a part of the NPA and your state association is essential to get out in front of that kind of stuff. So we can be ahead of that. But we've seen the emergence of smart technologies, phones that can be locked remotely. Pretty soon it's going to be TVs, guns, tools and anything here pretty soon is going to be locked remotely. So how do we deal with those changes? Do we frequently, what I hear on a message boards is people saying, I
got a bad phone so I don't want to take one because they're bad. Well, do the math. You do a hundred loans at 15% juice
and if one phone goes bad, you're still had 50 bucks. So there again, it comes back to are you thinking accurately about your business? Is that the wise move, and I can't blame people for that. Those things are hard. It's hard when you get that brand new Galaxy S9 that's locked up and you think, man, I just sunk 4 or 500 bucks in that thing and now I've got a brick.
Yigal Adato: 21:09 Well, I think the truth is that some people get into the pawn business believing that it's risk averse. There's just no risk. But every business has a risks. Every business has a lost somewhere.You'd have to take the ship and learn about the stuff. We just have to learn about more things in order to minimize the risks.
Jaimie Smith: 21:28 Yeah. And that comes back to best practices. And there's a lot of stuff that we as pawnbrokers discuss about how you can minimize those risks. Like I said, at the core, I'm a payday guy and I'm a bullion guy, so I'm in some risky, risky stuff. So, my risk tolerance might be a little higher than others. But you've got to
roll the dice sometimes and if you can help that customer and if they're a first time customer and they're coming to you with that phone and you say no, they might have a pocket full of gold and you have no idea and you just send them out the door and they had a bunch of chains and rings and their pocket they were going to pawn too, but they're just testing us so I can get those phone customers and those customers who are maybe other pawn shops are turning down and if I can get maybe even just 7
to 10% of those a year that the other shops are turning now,that's a huge victory for me cause that's going to add up over time
Yigal Adato: 22:19 For sure. I love that. And Jimmy, what's the one piece of advice,I mean you've given a lot of advice over the show so far. What's the one piece of advice that you would want the listener to take
action on tomorrow in the pawnbroking industry?
Jaimie Smith: 22:36 Say yes, say yes. Say yes more often if you can, look at your business and say, where do I want to be? Can I say yes more often? And if I do, what's that going to do for me? If I start taking in more stuff what's that going to do to my loan balance especially. And as long as you can sell it and make a buck on it somewhere, which you can, it's going to help and it's going to really drive your growth if you start learning how to say yes
instead of saying no right away just because of what it is.
Yigal Adato: 23:09 Awesome. And Jamie, thank you so much for being on the show. For those of you listening, thank you so much for listening. Join us in the Pawn Leaders Podcast Community. And if you want to help your leadership growing your culture grow,which I believe increases the bottom line go to pawnleaders.com one of the clients, one of the pawnbrokers
just increased $54,000 in sales in two weeks, implementing two tactics in the Pawn Leaders. So reach out to us. Thank you so
much for listening and we'll see you next time around.
Jamie Smith left the banking industry and started a payday advance and check cashing store with his wife, Amber. The business grew in 2 locations. They also started an Ebay business selling coins and bullion, which eventually grew into one of Ebay’s most successful retailers in that category, achieving Titanium top-rated seller status. In April 2013, they opened their first pawn store, Allied Pawn, in Dubuque Iowa and business has been great. Over the last 10 years, Jamie has learned from some of the top pawnbrokers, jewelers, coin dealers and marketers in the world. He has used his experience to grow his business and developed his unique approach to grow Allied Pawn to one of the most successful pawn stores in the west.
[02:01] A shift in the business territory caused Jamie and his wife to look at other options and he decided to go into the pawn business based on his experience with coins, gold and lending
[03:02] What are the laws governing pawn in Iowa? “We have no law. Operating under a city ordinance, there’s a 5-day hold on buys (precious metals), we charge 25% and Iowa has no mandated pawn hold period, but we hold our loans for 30 days.”
[04:39] What are the 5 tips for growing your business successfully?
- Seek out a business mentor
- Say YES more often (have a high-risk tolerance)
- Seek out some of your affluent customers
- Utilize strong marketing (SEO, Search, Social Media)
- Be willing to sell your merchandise fast
[07:00] Mentors challenge you to think differently about the business
[08:16] How do you market to the affluent to get the big loans? Use advertising towards them, like print, join clubs and organizations and network with the right people
[09:22] Read at least one book from the No B.S series of books by Dan Kennedy. No BS Marketing to the Affluent is especially great.
[10:25] Even when you think spending a ton of money on SEO will make your business successful, there are times when it gives you traffic but it does not convert to actual sales
[12:20] There is a coin dealership that Jamie runs around the back, while Amber handles day-to-day activities in the storefront
[13:00] Why is it so important to be involved politically? “Like my good friend and mentor, Greg Angstrom will tell you, ‘Being involved in politics is insurance’”
[14:04] Joining the NPA and a state association is essential
[14:49] Realizing that to get to be a successful entrepreneur, there are certain improvements that you would need in your life
[15:32] Two books that you would recommend that made an impact in your store and business:
- For What It’s Worth: Business Wisdom from a Pawnbroker – by Les Gold
- Pawnonomics: A Tale of The Historical, Cultural, and Economic Significance of the Pawnbroking Industry – Stephen Krupnik
[17:47] What is the biggest mistake you’ve made in your five years of the pawn business? Practicing “buy low, sell high”
[18:24] What do you do to create the culture that you have in your business? The business atmosphere is relaxed and the team gets bonuses every now and then
[20:04] You have to be very careful of your surroundings regarding threats to the pawn business. Joining the NPA helps you with the changes happening around you
[21:30] There are many ways you can minimize risks in your pawn business
[22:37] Closing advice
“Say yes more often and see the impact it has on your business”