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Unread 02-03-2006, 10:49 AM   #1
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"Resale Value"? Read this before uttering those words . . .

I posted this in another thread, but it really deserves it's own thread.




Quote:
Originally Posted by wwjdnow
If you did, were you pleased with the results? If you tried to sell a modified Lester, how did it impact the resale value?
Unless you have a geniunely collectible guitar, the idea of "resale value" is a fool's errand of the highest order. I guarantee you, there isn't a single retail Lester, or Leo for that matter, available in GC or on MF today (or Paulie even for that matter) that will have any resale value to speak of, period, in some 20 years.

Doubt that? Go ask someone who has a ton of beanie babies stuffed in the closet, or Coleco Cabbage Patch Kids (and not the original Xavier Roberts originals). Sure, there might be a cottage house market for them in the future, but not along the lines of what they were originally marketed for, or the conceit under which they were marketed in the first place.

Two other factors to keep in mind: assuming that there was any validity at all to resale value, two key things would have to be in play - totally original, i.e. no rework or servicing of said instrument, and available quantity.

The first bit: if any part has been replaced, however insignificant, then the resale value virtually drops thru the floor. I had a friend with that particular situation. He had an original 1970's Lester, which was his first instrument, that he was debating having retopped, but naturally he wanted to keep it stock so that it would maintain the resale value. It had the original papers and everything. Well, as it turns out, the point became moot, because several years back he had a nut-job done on it. Well, it wasn't completely "original" and, ergo, the resale value dropped significantly. I'm sure it still had some, but nothing like the king's ransom he figured it would fetch. So, that being the case, he went ahead and had it retopped, going from a rather maudlin and pedestrian green colored solid top to a beautiful book-matched flaming maple top that put Paulie "10-Tops" to shame.

Incidentally, he'd never sell it, which sort of mooted the point, but since maintaining the resale value was all in vogue, that was something of a factor . . . until he learned about the issue with the nut.

Second bit: available quantity. Part of what determines value and collectibility of any particular item deemed a "collectible", apart from the idiosyncratic and decidedly nostalgic proclivities of people with way too much money on their hands, is the relative scarcity of the commodity in question. It's simple Economics. Low supply to meet demand = higher perceived value, and therefore higher price, placed on units. High or more plentiful supply to meet same demand = lower perceived value and lower price. The idea behind these earlier guitars as being collectibles is that there weren't that many to begin with, ergo, making them rare. Also, they were/are geniunely collectible because there is a worthwhile market for them in the sense that there is more to them than there intrinsic worth as musical instruments . . . they symbolize a time in America of invention, discovery, establishment of a cultural identity, they are linked to those phenoms in other arenas, and so on.

Nowadays, Rock is an established social institution, and has in many ways become self-parodic and redundant, and the market is absolutely glutted with the same exact identical guitars. There's nothing special about them. More Paulies, Lesters, and Leos are cranked out in a year than what were produced in nearly a decade during the early days. What's so special about that? Before they were done by hand my artisans. Now they are 80% CNC'd. Hey, I'm more of a fan of CNC now than before (tho if I'm going to pay $2K for a guitar, I'm still going to make it myself or have it made by hand by a Luthier), but what's so special about that?

Also, nothing is truly a collectible unless there's someone left who cares enough to "collect" it. So, Paulie makes a Santana Siggy model with some fancy crap on it and overcharges an extra $20K for it. So!?! Is someone really going to care in 20 years? Maybe. And, if so, that one person will "collect" it, either in a private sale, or perhaps at some sort of "auction", perhaps at some sort of joint eBay/Sotheby's auction hosted at the Hard Rock or at the Rock 'n' Roll Hall of Fame. Maybe. Either way, if that happens to happen, that will be the exception to the rule that proves the rule. That definitely won't apply to your off the shelf Paulie, or Lester, or Leo. It's gonna be hard to sell yours for any kind of value, when there is an identical one . . . or, truth be told, a ton of them . . . down at the local pawn shop.




Discuss.

Chesh

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Unread 02-03-2006, 11:33 AM   #2
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thanks very much for an exceptional post, as well as your true and honest clarification of the issue in its entirety.
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Unread 02-03-2006, 11:33 AM   #3
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And there ya have it.
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Unread 02-03-2006, 11:58 AM   #4
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Quote:
Originally Posted by CheshireCat
I posted this in another thread, but it really deserves it's own thread.






Unless you have a geniunely collectible guitar, the idea of "resale value" is a fool's errand of the highest order. I guarantee you, there isn't a single retail Lester, or Leo for that matter, available in GC or on MF today (or Paulie even for that matter) that will have any resale value to speak of, period, in some 20 years.

Doubt that? Go ask someone who has a ton of beanie babies stuffed in the closet, or Coleco Cabbage Patch Kids (and not the original Xavier Roberts originals). Sure, there might be a cottage house market for them in the future, but not along the lines of what they were originally marketed for, or the conceit under which they were marketed in the first place.

Two other factors to keep in mind: assuming that there was any validity at all to resale value, two key things would have to be in play - totally original, i.e. no rework or servicing of said instrument, and available quantity.

The first bit: if any part has been replaced, however insignificant, then the resale value virtually drops thru the floor. I had a friend with that particular situation. He had an original 1970's Lester, which was his first instrument, that he was debating having retopped, but naturally he wanted to keep it stock so that it would maintain the resale value. It had the original papers and everything. Well, as it turns out, the point became moot, because several years back he had a nut-job done on it. Well, it wasn't completely "original" and, ergo, the resale value dropped significantly. I'm sure it still had some, but nothing like the king's ransom he figured it would fetch. So, that being the case, he went ahead and had it retopped, going from a rather maudlin and pedestrian green colored solid top to a beautiful book-matched flaming maple top that put Paulie "10-Tops" to shame.

Incidentally, he'd never sell it, which sort of mooted the point, but since maintaining the resale value was all in vogue, that was something of a factor . . . until he learned about the issue with the nut.

Second bit: available quantity. Part of what determines value and collectibility of any particular item deemed a "collectible", apart from the idiosyncratic and decidedly nostalgic proclivities of people with way too much money on their hands, is the relative scarcity of the commodity in question. It's simple Economics. Low supply to meet demand = higher perceived value, and therefore higher price, placed on units. High or more plentiful supply to meet same demand = lower perceived value and lower price. The idea behind these earlier guitars as being collectibles is that there weren't that many to begin with, ergo, making them rare. Also, they were/are geniunely collectible because there is a worthwhile market for them in the sense that there is more to them than there intrinsic worth as musical instruments . . . they symbolize a time in America of invention, discovery, establishment of a cultural identity, they are linked to those phenoms in other arenas, and so on.

Nowadays, Rock is an established social institution, and has in many ways become self-parodic and redundant, and the market is absolutely glutted with the same exact identical guitars. There's nothing special about them. More Paulies, Lesters, and Leos are cranked out in a year than what were produced in nearly a decade during the early days. What's so special about that? Before they were done by hand my artisans. Now they are 80% CNC'd. Hey, I'm more of a fan of CNC now than before (tho if I'm going to pay $2K for a guitar, I'm still going to make it myself or have it made by hand by a Luthier), but what's so special about that?

Also, nothing is truly a collectible unless there's someone left who cares enough to "collect" it. So, Paulie makes a Santana Siggy model with some fancy crap on it and overcharges an extra $20K for it. So!?! Is someone really going to care in 20 years? Maybe. And, if so, that one person will "collect" it, either in a private sale, or perhaps at some sort of "auction", perhaps at some sort of joint eBay/Sotheby's auction hosted at the Hard Rock or at the Rock 'n' Roll Hall of Fame. Maybe. Either way, if that happens to happen, that will be the exception to the rule that proves the rule. That definitely won't apply to your off the shelf Paulie, or Lester, or Leo. It's gonna be hard to sell yours for any kind of value, when there is an identical one . . . or, truth be told, a ton of them . . . down at the local pawn shop.




Discuss.

Chesh
Dead on man that is exactlly why I keep my two Carvin X220C`s and 1989 pointy headstock V220T in the closet. The V220 is a really rare bird with it`s options but the two X`s I have are in another catagory indeed. The 1993 I have is one of less than 50 that was built after the scale change in 1993 and is dead stock and allmost mint. The 1991 X I have is the ONLY one known in the C with the Floyd to be orderd with with the 1991- 1992 option of a 25.5 scale 22 fret neck. It also is dead origional and allmost mint.
Whether a late hairband era Carvin will ever be considered truly collectable or not is up for debate. There is no debate that these are truly some of the rairest X`s in exsistance . The X`s in particular were not well recieved when they were introduced and did not sell well but are now sought after and highly prized among Carvinites. On a collectable the origionality and knowing the details of the item such as production and availability have a MAJOR impact in value. I STOLE both of these on late night eBay buy it now`s and snagged the V220 from a friend reasonably so at the absolute least I will easily double my investment on these when and if I sell. Here are some picts of the three.

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Last edited by shreadhead; 02-03-2006 at 12:10 PM.
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Unread 02-04-2006, 11:33 AM   #5
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Quote:
Originally Posted by shreadhead
Dead on man that is exactlly why I keep my two Carvin X220C`s and 1989 pointy headstock V220T in the closet. The V220 is a really rare bird with it`s options but the two X`s I have are in another catagory indeed. The 1993 I have is one of less than 50 that was built after the scale change in 1993 and is dead stock and allmost mint. The 1991 X I have is the ONLY one known in the C with the Floyd to be orderd with with the 1991- 1992 option of a 25.5 scale 22 fret neck. It also is dead origional and allmost mint.
Whether a late hairband era Carvin will ever be considered truly collectable or not is up for debate. There is no debate that these are truly some of the rairest X`s in exsistance . The X`s in particular were not well recieved when they were introduced and did not sell well but are now sought after and highly prized among Carvinites. On a collectable the origionality and knowing the details of the item such as production and availability have a MAJOR impact in value. I STOLE both of these on late night eBay buy it now`s and snagged the V220 from a friend reasonably so at the absolute least I will easily double my investment on these when and if I sell. Here are some picts of the three.

Sweet deals! I can't wait to see how they play out for you.
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Unread 02-04-2006, 11:34 AM   #6
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Again, posted in another thread, but I thought it relevant here . . .




Quote:
Originally Posted by BlessedNinja
It makes me feel all fuzzy inside to think that someone has the same take on guitar economics .


Quote:
One thing to add(if I may) is that you have to consider your target market. Les Pauls (late 50's early 60's) aren't super exspenive because they were incredibly well crafted and capture the pinacle of what "tone" is, they're exspensive becaus of the time the represent. The late 50's is when rock and roll really started taking off and at the time you only had a limited amount of axes to choose from and the rockers guitar of choice (typicaly) was the LP.

The people who were witness the Rock and Roll revolution are now middle aged and generaly have some money to throw around, and when you combine this with the above meantioned S&D curve prices go through the roof. This of course realy screws over the working mans(or college student ) chance at obtaining one of these rare gems.
That is precisely why Gibson was able to issue that Jimmy Page siggy, with the exclusive collector's run with prices thru the roof, and there were guys out there just willing, able, and ready to eat it up. And they did. To the tune of 10's of 1000's of dollars a pop.

You'd think that they were buying Jimmy's actual Lester. Perhaps on some level they did too.

Quote:
Remember it's not what it's worth, it's what someone will pay for it.
Indeed.

Not only that . . . I also reckon value by what it will take for me to replace it.

For instance, I don't think for a moment that if I put my Utah on eBay that it would fetch anything - could, but unlikely - but to have someone else create it would cost me easily some $7K to $10K, and would have to be done by someone tops in the field.

There simply aren't any companies out there that do totally spec custom fabrication, like, for instance, me handing them the designs and specs on CAD for instance, and then they sit down at a computer and tap a few buttons and type a bit on the keyboard, and suddenly out pops a Utah, all rendered and finished, and then, with the applicable economies of scale, charging me a reasonable hourly rate.

No, this would be a Lutherie job thru and thru, and if the Luthier was indeed jigged up to do that kind of work, the price would then commeasurately go thru the roof. We're talking something like Alembic. There are some local people who could probably do it, like Driskill, and there was also this bass company that's really good. Of course, if I went with there body designs, it would cost less, because they're jigged up for that, and obviously if I was doing a Strat design or something common (or even somewhat uncommon) then Warmoth could crank it out in no time, but then I'd be paying a premium for all the options, and even then they wouldn't have all I wanted.

Not only that, but the funny thing is that it was cheaper for me to make the square, bevelled guitar body on my old Sears Craftsman table saw, with a planer attachment, than it would be to CAD out the design and then have someone CNC it. The body design would be the biggest issue, but definitely not the only one.

Oh, what fun you can have when you're a 20 year old kid and don't know any better. But I digress.

I think of guitars as tools, and not collector's items, and I reckon value by what it would take to replace it, in terms of my own needs.

Those two factoring principles are pretty good to keep in mind: what someone will pay for it, and what it will cost to replace it.

Chesh
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