Official Luthiers Forum!

I've been a custom maker for 30 years!
One offs and such-plus my own designs; that get ordered over & over !
I've only had a handfull of buyers ask about resale value or(a) future value.
I've sold 2 of my guitars i made in the early 80s for as much as a new one!
BUT they were well maintained by the original owners so I had no problem helping them with resale.
Both of them wanted new guitars from me so I just thought it was the responsible thing to do -help them out!
If you buy a new Ferrari you will not get what you paid for it right away (usually)

It's the same with most guitarmakers!
The buyer is making an investment for the future!
Either to inhance thier musical abilities because they have a very nice guitar to play on -or in very few cases a gold mine !

mike

_________________
Mike Collins

I knew in advance that this was going to be a special topic...  My view as a promoter, a marketing specialist and a guitar collector?  The more you dodge, or evade on this question, the worst it is...  My view is that the more we reassure the buyers on that matter, the more guitars will be sold...

For example... It is reassuring for the first time buyer ...

To say that when you buy a luthier guitar, you do not loose more then when you buy a Taylor from a store... these guitars too loose value out of the door...

To say that some luthiers will buy back guitars can help too.

To say that they are some specialized dealers that buy luthiers guitars is reassuring.

To say that some luthiers do increase in value as they do not produce a lot and when the demand is high on their name, the value increases...  your guitar can keep its value, or better yet, increase in value..

again I know that this is not the main reason why to buy a luthier guitar...  but not adressing the question can be a brake for some people (more then we think maybe).

I'd love to know what you think on this.

Still trying to demistify the whole process for the guitar world...  And If I suceed like (I think I can), I believe that I will help sell more guitars...

Rick I didn't know that you made Winter's guitar - WOW!

I have been a huge fan for many years, since I was a kid in fact, and this is one of my all time favorite top ten albums that I have carted around for 35 years now.  It's the famous album and a half - Second Winter.







I'll get back on topic here in a minute but I wanted to add that Winter has a great line in this album.  He is a man who at least knows were he stands.  The line goes like this "If I ain't drunk it's only because I'm high."

I agree to that builders have a responsibility to do what is reasonable to positively impact resale value.  But I also agree that the primary responsibility of a builder is to match players with extraordinary and complimentary instruments to the individual player.

I would however seriously caution any builder against making any claims regarding their resale value......  This question was asked in the context of the "investment" value of our instruments.

All investments are heavily regulated, at least in the states, and anything that resembles a prospectus which includes claims of past performance must by law be specifically disclaimed as never any sort of guarantee of future investment performance.

It's cool to indicate that your guitars now sell for 3X what they once sold for but it would be advisable to also be sure to indicate that of course this is no guarantee as to how they may do in the future.  The absence of the disclaimer is grounds for a law suit when a buyer does not receive the future value that was claimed or even alluded to.  Remember, this is an investment discussion right?

I think that if your shingle is hanging out on the street you do have a duty to existing clients to do what is reasonable to maintain or even increase the value of your instruments and their investment value.  I do not however think that builders are expected to be experts here in branding etc. or even be very good at executing programs that might increase the value of their instruments.

Instead, builders should endeavor to continue to grow as builders and this, if all goes well, will increase the value of their instruments for all over time.  Mario has clearly done this and is the example to follow.

I never even hint that my current guitars are investments. I do think it's fair to call them "heirloom quality" though, as are all the instruments being made by all (or most) of us here. How many objects in a person's daily life hold monetary value? You car? Your computer? Your "home entertainment center"? Your furniture, unless you buy good antiques or hand-made pieces? Look around the average middle class home and just smell the depreciation of monetary value of nearly everything you see...unless it's a nicely made guitar. And that goes for the good factory stuff, tool. There's nothing I bought in 1962 that held value and more than my brand new D-28.   

Yes, there is usually a dip in street value in the first few years of original purchase, but almost any well made guitar will be worth more in twenty years than its original price...and that will be after delivering twenty years of music and pleasure to its owner(s).   Yeah, and what about my Mac Classic from 20 years ago? My '95 Saturn wagon? OK, I bought right in the stereo department and my MacIntosh 275 is worth a bloody fortune, but my 20 year old CD player is now retired as is my dual deck Sony cassette machine...and both were top of the line when I got them.   

"Investment" implies no delivery of value during ownership...only $$ in $$ out after a set time.   Guitars deliver the goods every time they're played, and if you buy right, they also appreciate.   And it isn't that hard to buy right; just buy one or more good ones.   They'll only get better...and therefore be worth more both as daily musical tools and eventually when they move on to a future owner.

Implied in this rant is the fact that guitars stay good and even get better for a very long time. My favorite vintage guitar is about 100 years old; it's my 000 sized Howe Orme.   That guitar has served it's purpose and therefore amortized it's original price over 100 years now.   That's an amazing value.   I think it's original price was about $45.00, and even if you bump for inflation, that's incredible performance.   There is no reason why any of the guitars made by luthiers here shouldn't be going strong in 2107.   

Here's another one: The more guitars are used, the better they get. About what else that you own can you say that?
That makes good guitars a fantastic investment.

 
I never even hint that my current guitars are investments.

Same here. But in my case, nearly all owners know what the resale value is, so it is there in their mind. I was simply stating what I'd say if asked.

On another guitar list, just a couple weeks ago, some did the math, and using the original cost of a late 30's D28 and today's value of the same, and found that it has earned just a bit over 9%. The DOW has done a hell of a lot better than that over the same period. So, even though that pre-war D-28 has grown to a 6 figure value, as an investment, it would still not be all that great. But looked at like Rick states, and that is that its cost is amortized over its life, yet has gained in value, and all along, was a great tool that gave each owner(caretaker?) great pleasure. Grandpa enjoyed the D-28 much more than Grandma enjoyed the stock certificate <g>

As for what sets our resale value, for sure our reputation, and whether or not you have something players are really wanting and can't get anywhere else, and that leads to the good 'ol supply and demand curve. As long as supply is lower than the demand, the street value should be higher, immediately. In my case, the only way you'll get a new one is if you placed a deposit 4+ years ago at this time. Therefor, if you want one today, and aren't on the list to get one, you have to find someone willing to let their's go. It's the seller's market at that point, and they can ask, and get, what they want. The guitar I shipped last week could sell and make its new owner a cool couple grand profit tomorrow morning. And that, in turn, allows me to judge where I can set my future prices.

Oh, and I don't believe we, the builders of these things, have any direct say in much of all this, anyhow, other than making a product that more people want than we're able to produce. And it's not like we can hold back in order to steepen the supply/demand curve. It's not like we can just decide to make 3 instruments next year to raise the prices of the used ones <g> The rest of it, is up to the consumer, who ultimately will decide what anything's worth.

One more thing: that Ferrarri will indeed go up in value the moment you take delivery. The wait for some models is over a year, ad you can be sure that if have just taken delivery and decided to not keep it, the dealer will line you up with a willing party who wishes to have one NOW, and not next year..