Over 41 million people suffer from food insecurity in the USA. More than 30 million people use pawn shops, in part to make ends meet. So it’s not a giant leap to consider that when people are really hungry, they may be forced to sell valuables at reduced prices in order to feed their families.
This fact has always bothered Jordan Birnholtz, the co-founder of the Detroit-based company. PionGuru, which operates a website designed to help sellers get the highest price for their items. People looking to unload something can post a photo and description of what they are selling, along with the zip code of where they live, to attract offers from several pawn shops in the area. These typically vary by an average of 250%, says Birnholtz, so it’s a great way to get the best price without physically shopping.
This challenges the industry’s generally oppressive economy. Pawn shops take advantage of this by purchasing personal valuables at deep discounts and then reselling them to walk-in customers as used, but at a higher rate. When exploited fairly, they are not necessarily exploitative for low-income communities. When someone is faced with an unexpected budget crunch, selling things can be smarter than taking out a high interest loan. The problem is that many people in poor areas don’t have the time or transportation to get past their local dealer, which means some places are offering the lowest price they think a seller is. will take.
Jonathan Polter, another co-founder of PawnGuru, said that before setting up the business he took a handful of items from the house – rings, iPads and a violin – to test the market along the 8 The city’s impoverished Mile Road. “The price difference was 500% between pawnshop A and pawnshop B three kilometers away,” he says.
PawnGuru’s model is designed so that people get fairer resale value for their products: rather than being leveraged when needed, they could be empowered. The company attracted $ 1.5 million in funding from America Impact Fund, which supports startups that can improve low-income communities, and Invest Detroit, a community development financial institution with a similar mission specific to the city. But in mid-December 2017, he started advertising another unrelated business on his site, in part to completely distract over-looking people from the service. “Need help? Want to offer help? Try Food search to find a pantry near you, ”reads the clickable blue banner ad, which runs directly below its logo.
FoodFinder is a non-profit app that allows users to find nearby pantries and check what might be stored there. Founder Jack Griffin began his efforts in 2014, the same year as PawnGuru. He met Birnholtz at the end of last year To optimise, a social entrepreneurship program associated with the University of Michigan, where alumnus Birnholtz serves as a mentor. “I’ve seen him work in a space that is really similar to ours and serve a very similar group of people,” Birnholtz says, noting that many of those who use his service come back a few times a year to make ends meet. “I saw an opportunity to support his work and also to help our end users get what they need.”
PawnGuru is active in the United States with half a million registered users and approximately 2,000 pawn shops. So far, FoodFinder supports around a thousand cities with around 30,000 users. The duo decided to collaborate during the holidays because, especially with many children out of school and unable to access free or low-cost school meal programs, it’s a time of insecurity skyrocketing. Demand also increases in the summer, when schools are closed. During these times, FoodFinder sees dramatic spikes in traffic.
For Griffin, collaboration makes sense, especially because many low-income Americans use services compatible with smartphones as digital lifelines. “The providers of free food… are overwhelmingly supporting our efforts to give more visibility to the work being done in the area of food aid,” he said in an email to Fast business. According to Birnholtz, who has access to the data, the first week the banner went live, FoodFinder saw a 500% increase in traffic.
The PawnGuru team seems happy to direct potential users to a free resource that might prevent them from pledging certain things. “Basically our job is to provide clients with as many resources as possible during a fairly difficult time,” says Birnholtz. “We know people will come back to us if they have a positive experience, so anything we can do to give them more information and a more positive experience on our site is increasing. [those] chances. ”Some short-term losses are worth long-term customer loyalty, especially if life improves.