The Highest Priced Dealers

[Darryl Hattenhauer]

Guildmongers,

This topic ask for your opinions about why some dealers ask for extremely high prices.

Some dealers consistently ask up to double the going rate. And some of these dealers have the same ax for sale for years and seem not to sell anything. One primary example is Gary's Classic Guitars. What's their strategy? How can they stay in business? There must be some formula by which asking the highest prices loses you money as surely as selling too cheap loses money. Obviously high volume helps lower prices. But what about turnover rate?

I can see why some dealers have moderately high prices: high demand, and an expensive location. For example, I'd say Gruhn and Mando Bros are not unjustifiably expensive. But I think these are: Kummer's Vintage, pmblues.com, Mikes Music, Fretted Americana, The Guitar Broker, Rothmans Guitars, Gary's Classic Guitars, Lehmann Instruments, Vintagemaster, Luchessi, Freedom Guitar. I hope I'm not misjudging or misrepresenting any of those companies. And I'm not accusing anybody of dishonesty. If Gary's tells customers that they are paying way more than what they can re-sell the ax for, fine.

 

[Guildmark]

Interesting question, Darryl. In a free market economy one would think supply and demand would determine price. Perhaps dealers with higher prices do not feel the competition. Maybe they add value with close customer consultation to help them find exactly the right instrument. Maybe they have a skilled sales force that are able to convince customers of the value of the guitar, regardless of street price. Some dealers jack up their price knowing that just making it more expensive convinces some buyers it must be worth more than another item for less - even if it's identical! A psychologist may have some input on that thought. Maybe the dealer is on Rodeo Drive catering to a clientele who don't care how much they pay. Not everyone reads Consumer Report, after all, and some dealers know that people are lazy and won't do their homework. Maybe guitars are not even their main source of revenue, so they do not focus on being competetive in that market. But if they do have a presence on the internet, one would think they would know where their price point fits in the fair market value scale. And if they don't care that they're losing sales solely on price, it's to the benefit of the buyer.

 

[Graham]

I know what you mean Darryl, two guitars that I have been watching have been D-25s. Nothing serious about those guitars, yet one at Axe-Zactly Music has been there for months listed at $750. I think it's a bit high, but it looks in good shape. I emailed them the other day about it and it's still there.
Another is at Jim's Guitars. This one has been on Gbase for a long time and will probably stay that way at the $1100 that they're asking.

 

[Darryl Hattenhauer]

GM,

Yes, I think that because they have less competition due to name recognition etc, Mando Bros is not gouging, especially considering their overhead. Likewise, there's a guy in Hawaii who is high, but understandably given his rent and lack of competition. And maybe Luchessi is just upscale all-around--like a Rodeo Drive seller, personal, luxurious, etc. and I'd forgotten that now and then some weirdo will pay more for the same thing thinking it might be better. On the other hand, somebody might think I'm a weirdo for my customer loyalty--not always trying to find the cheapest but staying with a dealer who is good. But if a dealer is losing due to high prices, how does that benefit the buyer?

Graham,
I think $750 might be understandable. But I'd like to know what Jim's is thinking. If he's making a living without jiving people, then that's great. But I'd like to know how he does it.

I should add that buyers can be mysterious too. I've seen people complain about the skyrocketing increase on some collectors, and criticize the seller for pricing something at double what the going rate was ten years ago. But the seller is selling at today's going rate. I don't think the buyer would sell his house for what he paid ten years ago.

 

[Graham]

Graham,
I think $750 might be understandable. But I'd like to know what Jim's is thinking. If he's making a living without jiving people, then that's great. But I'd like to know how he does it.

I guess what I don't understand is that the $750 guitar has sat there for months at that price. D-25s are selling at well under that almost on a daily basis. Perhaps they paid too much for it and need to break at least even.

I haven't been watching this long enough to know if there is a cycle of pricing and where it is at the moment. Same with Jim, I guess.

 

[Darryl Hattenhauer]

From what little I know, I'd guess that $750 is above average but in the reasonable rage, while $1,100 is puzzling.

 

[guildzilla]

Good subject for discussion. I've been wondering the same things, D.

You see many of these dealers on G-Base, and I've been trying to follow the Guild stuff on there over the last several months. I see very few good deals on vintage Guilds, although there is a lot of nice stuff. And I don't see very much movement in the combined pool of Guild inventory on G-Base.

As everyone points out, the pricing is higher than the gear that sells on e-Bay. Maybe 40 percent on average? Higher?

Hard to know if those are firm or negotiable prices.

When some of these sellers list Guilds on e-Bay, such as Michael's Guitars in Cincinnati, Ohio, they tend to set the reserve near top dollar.

I'm considering a virtual store on G-Base, for kicks. Buy on e-Bay and elsewhere, sell on G-Base. But how many guitars actually get sold on there? I don't know. Personally, I like the one-to-one aspect when selling or buying a guitar. But is G-Base attracting real buyers or just shoppers?

At the least expensive G-Base seller subscription rate you need to sell about two instruments a month to beat e-Bay fees. When you see the markups of the other sellers, it looks like a smaller seller could find a niche by offering lower prices, at least in the Guild category.

Perhaps it isn't odd that you can't track completed sales on G-Base?

 

[Siwash]

I have to say that ONE thing Gbase dealers seem to be offering is a professional relationship with the buyer. . . not some guy trying to pawn off junk on unsuspecting Ebayers.

Something to consider if you've never been stung by an ebay deal.

 

[Darryl Hattenhauer]

Siwash,

That's exactly why I'm happy to deal with average-priced dealers on gbase-- If they are reliable and knowledgeable, of course. They spot problems that beginners on ebay don't see.

 

[Graham]

Bing has listed on Gbase, I wonder what his opinion on it is. I know from another post about credit cards that he was saying the profit margin on the new units is not that great, so I guess on the used, it's purely a guessing game as to what you pay in hopes of what you sell it for.

 

[Guildmark]

...if a dealer is losing due to high prices, how does that benefit the buyer?

I just meant it makes the decision easier for the buyer, all else being equal.

 

[West R Lee]

Darryl,

I bought my DV73 from the Guitar Broker, and felt then like his price was a bargain. I still do. He had great credentials and was a pleasure to deal with. The cost (or value) of many of his other guitars is one of the factors that convinced me to buy from him.

I almost bought a D100 from Fretted Americana, and felt like his price was reasonable, I just had a shadow of a doubt on the deal because of something I saw in a picture of the guitar.

West

 

[Darryl Hattenhauer]

I bought from Guitar Broker, too. He had a lot of Guilds and seemed to know them. But that was about 15 years ago, and my subjective and uninformed hunch is that he's really raised prices in the internet age. But the place that really strikes me as the highest is Gary's.

On the other hand, probably all of the high end sellers have a bargain now and then.

 

[West R Lee]

I'll admit his vintage Fender and Gibson electrics are sky high, but I don't have a clue what they're worth.

I paid $1995 for the DV73 to Guitar Broker and it is flawless, I paid the same for my DV72. I've yet to see another DV72 for less, and in my opinion, the DV73 is more valuable. So to me the price was reasonable.

Then again, I found out the guy I bought the DV72 from paid $1000 for it, so I suppose it's all relative. :evil:

West

 

[Graham]

And when the time comes and you part with that beautiful burst D-55 with the "normal player wear and dings" :shock: it will all be relative when the new buyer finds out what you paid for it, right.

 

[Darryl Hattenhauer]

Personally, with a real rare guitar i really want and I'm not going to see again, I'm willing to go a little high. But the $1,100 Graham mentioned for a D 25 seems mysterious to me, although I'd like to hear the seller's side of it.

 

[Graham]

http://www.gbase.com/Stores/Gear/GearDe ... em=1536418

Here it is, it's been listed for a couple of months that I know about.

 

[Darryl Hattenhauer]

Is the walnut finish rare?

 

[Graham]

I guess that's a question for Hans. I just can't see the old D25 being anything radically different. And one guys wlanut colour is another guys brown. :?

 

[West R Lee]

That one is identical to mine. That finish isn't rare at all, but I think most D25s in the late 70's were finished with that dark stain.

I'm like you guys and haven't a clue why he would command such a price for a plain old D25M. I'll have to admit it's ok with me though. Just helps keep the value of ours up just a bit.

Oh and Darryl, I meant to tell you that Fretted Americana wanted $2700 for that D100. I checked with Hans and he felt that was fair also. The picture in question was one in which the top binding at the lower bout not only seemed to be seperating, but the top didn't look like a good fit to the side. Sort of hard to explain. I called him and he assured me it was an optical illusion, but I couldn't be sure even though he is reputable. Kicked myself a couple of times since.

With both Guitar Broker and Fretted Americana, I don't think either guitar was a steal at their price, but didn't feel it was highway robbery either. I felt their prices were fair. I'm like you in that if there's a guitar out there that I really want, I'd be willing to pay a bit more.

And Graham, when I grow tired of the burst D55, you'll be the first to know.

West