Trade in value

[Stephen Perry]

What'a fair way to determine the trade in value of an instrument? I have had such varying responses from customers. Some seem to think that whatever they paid should be the trade in value against anything they want. Others are happy to get even 1/3 of list. Generally I can't justify allowing more than I can buy something for wholesale. On a near-equal value swap I really have trouble if I'm not sure I can move something reasonably quickly. I'll tend to offer 3/4 of wholesale. The hardest part is when someone wants me to go first and indicate a trade-in value for their baby. I feel as if I'm supposed to read someone's mind. I've had several people really go off when I didn't offer as much as they expected. I've had others be delighted at the offer, so much so that I wish they'd gone first!!!

What do you other dealers do? Case by case? Depends on the difference in level of instrument? Uniform policy?

Steve

[jim simpson]

Although I'm not a dealer, I have had plenty of dealings with trade-ins and for the most part have felt that I was treated fairly. I realize the trade-in will be less than what I could probably sell the item for but the convenience and timing usually guides these decisions. A while back I was at a show trying to trade off my Yellowstone. One dealer had a Sam Bush that he was anxious to take my instrument in on and give me a generous trade in. It was still beyond my budget at that time. He did have a Flatiron that I thought I could get for $1000 plus my instrument, it was priced at $2700.00. He wasn't interested in taking the trade at all on that one. I did end up selling it privately for $2000. The buyer was happy and I was as well. I had hoped to get a bit more but settled for a quick sale. As it turned out I was in a better position to shop with just cash and no trade. I guess when folks get upset about an offer that's below their expectation, all you can do is educate them in the economics of wholesale/retail and your need to make some profit.
It's a good question!
Jim

[Jim M.]

I am not a dealer either, but I have traded with dealers. It seems like they figure out what they can sell it for, and then offer 60% to 75% of that, depending on demand for the item. So if they can sell it for $1500, they are going to offer you $900 or so. Anyone who thinks a dealer should offer what they might be able to sell it for is an idiot, or at least needs a lesson in economics.

[Stephen Perry]

Your viewpoints seem reasonable to me. The last odd incident involved a mandolin listing for $1700, used probably selling at $1300 eventually, not quickly. I was possibly a little low, but I was looking at a percent of my wholesale cost. Certainly I wasn't as far away from the most common tradein as the fellow looking to trade, who wanted $1400 credit.

Thanks

Steve

[Bob A]

I've dealt with dealers on a consignment basis, and get 80% of the realised price. Sometimes this is ok, sometimes the instrument sells for less than I'd like. For a straight-up sale, 60-65% of retail is about normal.

I'd guess trade-in to be a bit more complicated; it would depend on the expected price and difficulty of moving the traded-in instrument, and the expectations of the instrument traded for. If it had been sitting on the wall for a year or two, the dealer might cut a much better offer than if there was a line of players hot to buy.

[Philip Halcomb]

Read the mandolin brothers trade-in policy online... http://www.mandoweb.com they have a written policy that they stick too. That way nobody feels cheated or gets an unexpected response. They've been in business for a long time and I would use them as a model if I were you...

[Stephen Perry]

Good idea, I can't find their policy looking through their site. I'll give them a call later on.