Used Instrument Pricing

[rfloyd]

Would like to hear some comments, opinions, experiences, etc on this issue.

If you're looking to buy or sell a non-vintage mandolin or guitar that is in excellent condition, what % of the current street price seems reasonable?

I'm talking about popular, mid-value (say $800-3,000) models from mainstream makers like Kentucky, Eastman, The Loar, lower end Gibson and Weber, etc.

[pheffernan]

If you're looking to buy or sell a non-vintage mandolin or guitar that is in excellent condition, what % of the current street price seems reasonable?

I generally start at 70%, but prefer less if I'm buying and more if I'm selling.

[lflngpicker]

I think Pheffernan's number is just right. I would use that as a starting point.

[AndyV]

What's meant by 'street price'? I take it as going price for second hand, that is what you would pay outside of retail - on the street. (No, not "Hey buddy, wanna buy a guitar real cheap?")

If this is what rfloyd takes it to mean, then he's asking what % over the current street price for an instrument in excellent condition.

[Jeff Mando]

What's meant by 'street price'?

There is manufacturer's suggested retail price and then there's the street price. Since the internet, nobody pays suggested retail anymore, but rather the "street price" as charged by Guitar Center, Sam Ash, etc. -- in other words, the normal accepted discount price that an internet search will tell you. NOW, USED IS ANOTHER STORY.....people are suggesting 70% of the street price, as a starting point.

[Dave Sheets]

From what I've seen in buying and selling various used instruments, is that dealers (established stores) seem to sell used instruments at something like 2/3 of the new price (close to that 70%) for "common" instruments in pretty good condition. Dealers will typically buy used instruments for about 2/3 of what they expect to be able to sell it for (they have to pay the rent, heat, etc and they do get stuck with instruments they can't sell). So a dealer will often pay you something like 2/3 of 2/3 the current new price (4/9 or just under half the new price).

Mind you I'm talking about "standard" instruments, like a current telecaster, Eastman or Kentucky mandolin- specialty items may be a bit different. "Standard" instruments fall under "commodity" style pricing. Unique items are a whole different ball of wax.

If you think about it, this 4/9 to 2/3 range is sorta the typical private sale price range, because above or below that, you can simply do business with a reputable dealer who will stand behind it, and maybe even make sure it is set up properly. When I buy from a reputable dealer, I know they will take it back or make good on repairs if I get it home and find a big problem 2 days later, that may be more of a risk on my part in a private sale from someone I don't know, particularly by mail. (Though my last couple experiences here and elsewhere buying online form private parties went great).

Vintage instruments are a whole different story, the valuation is harder to establish. Some really popular instruments or rare ones, may sell well above the 2/3 of new price, but there has to be a reason. Some makers also have a reputation for being very consistent, so buying one of these without playing it is perceived as less of a risk, and a used instrument may well be above the 2/3 price.

If you can get more than that 2/3-70% of the new price, more power to you, starting the negotiation there or above makes some sense, but expecting to get 80% of the new price on a standard item may be asking a bit. Who knows, if you are patient enough,you might get it.

Hoping I'm not being offensive in being this direct or blunt, but that's what I see happening. On EBay, when you are bidding against dealers, they stop bidding pretty reliably at 4/9 the current retail price, and I won't pay above that 2/3 current retail price. At that point, I can go to a dealer,unless it's a rare item, or a maker whose prices just don't fall much (usually instruments that are close to boutique grade) and get the safety advantage of working with a dealer.

[Mandobar]

You really need to look at comparable listings. I have seen prices that sway all over the place on used instruments, and it is hard for buyers to determine exactly what the value is of an item if comparable items (meaning same year, condition, etc.) are priced significantly lower or higher. You don't want to get into a "backwards auction" scenario where you start very high and then feel you need to keep dropping the price in order to make the sale.

Dealers will use the 80% rule, taking into consideration that they will have to take a credit card, offer free shipping, etc. If a product has a strong resale market then 70% is a good starting point, but look at the pricing of other comparable instruments too. There are some brands that have softer retail markets then others, especially if they are brands that allow heavy discounts on new models.

[AndyV]

Okay got it. BUT the retailers where I live never charge msrp. Every time I see an online add stating msrp I think Who pays MSRP???? Such bs.

For the individual buying or selling, urgency of course is also a factor in pricing.

[Billy Packard]

( A tip of the hat to the above posts...)

The old adage applies here, "What the market will bare."

The price range the OP suggests is flooded with offerings and they are usually priced on the high side, especially by dealers. I'd suggest bid very low and barter. At some point an agreement will or will not happen. So often we Americans don't "feel" right bartering but it is the most ancient form of communication....

Billy

billypackardmandolin.com

[Paul Hird]

I'm interpreting the OP "street Price" as the price for a used instrument price and not what a chain store would charge for a new instrument. In this case the 70-75% rule that "pheffernan" suggests seems like what I see when looking at the classifieds vs. new prices.

[Mark Wilson]

I'm interpreting the OP "street Price" as the price for a used instrument price and not what a chain store would charge for a new instrument.

Umm - I think he's calling 'street price' the average price you would expect to pay new after typical dealer discounting etc. I would call 'street price' the average going negotiated price of a used item (in very good condition - good as new) between private parties.

If you're looking to buy or sell a non-vintage mandolin or guitar that is in excellent condition, what % of the current street price seems reasonable?

[rfloyd]

OP here. Sorry I wasn't more clear in my question. I'm using the term "street price" as the price one pays to a dealer (online or brick and mortar) for a new instrument after they apply the "usual discount" off of the MSRP. This usage is consistent with the way it is used in Acoustic Guitar magazine, for instance, when they review guitars.

Jeff Mando in reply #5 above expressed it the way I meant it.

Thanks for all the responses, carry on if anyone has anything to add.

[allenhopkins]

The information I've retained from long but not "inside" experience with instrument sales, is that the markup on new instruments is about 100% -- i.e., the dealer pays about half of the "list price" (pretty much the MSRP) as wholesale. Thus, dealer pays $500 for a $1,000 instrument, offers it for sale for "35% off," sells it for $650, makes $150 (30%) on his outlay, uses the money to pay his rent and light bill, buy groceries, etc.

This widespread discounting (which varies, of course, based on market conditions -- and the restrictions that certain manufacturers place on their authorized dealers) means that when figuring market prices for used instruments, one has to start from the actual dealer price rather than the "list price," which most people don't pay.

Buying, and seeking trade-ins, from dealers here in Rochester, all of whom know me as a regular customer, I've gotten the rule of thumb that I can get about 60% of the price I paid for an instrument, if I'm trading it back in. So that might be the price I'd try to get in a private sale. But, since I buy almost exclusively used instruments anyway, I'm never dealing with "list price" or MSRP.

The vintage market's something else again. It's the place where you can actually sell your instrument for more than you paid for it. I just got an over-$3K trade-in allowance on a 1957 Martin D-18 that I paid perhaps $400 for back in the 1970's. Of course, it wasn't cash in my pocket; it was an offset on another instrument I was purchasing.

There really aren't "rules," but there are general patterns that one can learn. Each instrument's unique, to some extent, and a lot depends on how much the buyer wants the one in question. Were I selling an instrument I bought new, I'd generally ask 60-75%, with the usual allowances for condition etc.

[G7MOF]

I've always tried to sell around 2/3rds of the new price.

[LadysSolo]

If you bought well when you bought a used instrument, you may get back 100% of what you paid, if you kept the instrument in good to excellent condition.

[Br1ck]

What I see a lot is instruments like a Collings MF or a Gibson F 9 in really clean condition discounted not a whole lot from new, maybe $500. Probably dealer trade ins for the most part. But $500 is still a chunk of change to save. I like to buy right in the middle of what dealer pricing is, and what the dealer paid. From a private sale, that is what I feel is fair to both parties.

Then there is a whole issue of condition. Headstock breaks, pinkie wear, dings and scratches. I believe Gryphon had a Gibson (F5G?) that was $2700 or so. It had fifty or so dings where the binding on the back would have protected it had there been any. Looked good from the front. Someone got a great player.

[Mandobar]

The mark up on low end brands is very different than on the higher level brands. I have seen people in stores arguing with sales people over this, and there's a huge difference in the business models of manufacturers like Eastman, Loar, and Kentucky versus the business models of Northfields, Collings, and Weber. Even with the lower end brands, by the time the dealer pays the freight in, and freight out these days (because everyone expects free shipping) the profit margins are fairly tight. Personally, I'd rather pay a little more and get something that is set up well, and from a place where if there is an issue I can return there and have it taken care of.

There is also no guarantee that you will get 100% back on a used instrument, despite the condition.