Friday, September 5, 2008

Re-sale prices


You bought a Gibson LP guitar only to discover that it's not your thing, you've fallen for the hype... now you know better. It's still in immaculate condition, having owned it for merely 3 days, you decided to sell it away for $4,400 after paying $4,800 for it.
The situation sounds too familiar especially after we trawl through guitar classifieds, people are parting with their very new acquisition at a very small price difference believing it's a justified loss margin. I'm just illustrating the situation using a Gibson scenario, it could very well be other brand names.
It is interesting to know that in the after-market, Gibson & Fender command the strongest re-sale price- 70% of its purchase/ receipt figure (surprise!), regardless of how old it is (vintage/ collectibles aside, of course). This would mean, a $1K Fender, would be worth (a guitar's worth is not equal to an agreed selling price which might be higher/ lower than the former) $700 should the owner decide to sell it away the day after he purchased it. It would mean that a 'very new' guitar does not necessarily command a higher re-sale tag by virtue of time spent with its current owner, the fact that it's owned greatly diminishes its worth.
Perhaps this would shed some light as to why nobody's quite interested in your 2-day old (for instance), Made-in-Japan Ibanez guitar (no offence Ibanez fans- I own many Ibanez guitars...) which you are willing to part for $900 (you bought it for $1K). Swallow some pride, re-think your offer.

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