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Economics 101

Here's a nice ES-345 from 1963. Seller says its mint but I can see some wear on the gold but we'll give him the benefit of the doubt. After all, it's only $29,999

I was talking to one of my NY guitar buddies today and we were discussing how the price drop that has occurred in the guitar market in the past 3 years has, somehow, not penetrated the crania of many, many dealers. We talked about how they must be into the guitars at the top of the market and don’t want to take the loss or perhaps they’re just waiting for an overseas sucker to buy into the hype. I learned a long time ago (back when I used to invest my money in things like tech stocks) that hoping for a loser to come back is a bad idea. If you sell the loser and invest what’s left in something that’s a winner, you can make your investment back a lot faster and make future investments. Or you can sit there with your loser and lose. I’m no economic genius by any stretch but I get the market. I’ve had people email me asking what’s wrong with a particular guitar because I’m selling it for a third the price of another dealer. The typical response when I tell them the other dealer is way out of line is, “Really???-they’re so reputable”. Reputable has nothing to do with price. Many of these same dealers are as honest as the day is long but somehow, they just can’t bear to take the loss. Perhaps it feels like an admission of failure. I’ve seen some guitars on the market going on four years now. Some, granted, are consignments over which the dealer has no control. Some dealers are highly negotiable but you never know which ones and besides, most people aren’t very good negotiators. The disconnect between guitar and market price is sometimes mind blowing. Here’s an example: I just sold a near mint ’64 stoptail 335 to a gentleman in the UK for $9500. One PAF, one patent number and no issues other than a repro tailpiece. I think I listed it at $9999. Let’s go to Gbase, shall we…OK, I’m back. There’s a red 63 that is listed as mint, (so mine was close) at $29,995. That’s triple the price (do the math, really). Fluke? Nope. There’s a Bigsby/stud ’64 for $25,000. And a stoptail sunburst 64 for $19,500. Oh, and a 63 Bigsby/stud model for $9200. Oh, sorry, that one’s mine. I’m not trying to be self serving here. Well, actually, I am but there are larger points to be made. Don’t let the “big” dealers tell you what a guitar is worth. Do your homework. You want a real education? Call one of them up and tell them you have a mint 63 ES-345 to sell and see what they offer you. Maybe they just do business differently than I do. Some of them have been around a lot longer than I have. But I see the same guitars week in and week out, year in and year out. I like having lots of guitars to play but I like seeing them go out the door even more-even if I don’t make a 200% markup. Besides, I know that if I paid $29,995 for a 63 ES-345, I wouldn’t have nearly as much fun with it as I would if I paid $9200. I’d be too scared to play it, let alone take it on a gig.

This is the $9500 stop tail 64 ES-345 I sold two weeks ago. Looks pretty good for a third the price.

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