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Negotiation 101

It doesn’t matter if it’s high end or a beater, everything is negotiable. Sometimes it’s just free shipping but sometimes you can knock thousands off. You want to stop a negotiation in its tracks? Lowball. That’s a ticket to nowhere.

It always happens this way. The market heats up and everybody thinks their guitar is worth way more than it is. Asking prices have skyrocketed due to a number of factors. Demand is up since the pandemic began because pandemics are boring and vintage guitars are not. Supply suffered for nearly a year because everybody was buying and nobody was selling. Inflation creeps in and the prices surge again. The stock market sags and folks are moving their money into collectibles and other hard assets. With all these factors converging, it’s no wonder the market is so strong. Add to that, the conventional wisdom that vintage guitars have been undervalued since the crash of ’08 and you have a nearly perfect storm for prices to rise.

Up front, I will stick my neck out and say it isn’t a bubble. Or at least not only a bubble. The factor that makes it look like a bubble is sellers testing the market. I could put an average 59 ES-335 out there for $75,000 like a couple of dealers have and wait for someone who “has to have one today” or I can price that guitar at $65,000 and know that it will sell at a fair price. Individual sellers are doing the same thing. So, you put that 60 ES-345 out there at $44,000 and then wait for some billionaire with more money than brains to come along? Problem is that most billionaires (and millionaires) didn’t get to be billionaires by overpaying for stuff. But, it’s your guitar and you can ask anything you want. I test the market too but when something that should be popular doesn’t sell in a few weeks, I know that something is amiss and it’s usually the price. I’ve said this before…the only reason something doesn’t sell is because the price is too high.

So, as a buyer, you need to get comfortable with negotiating. It doesn’t make you a cheapskate. It isn’t insulting. And if you won’t negotiate, then you could be missing a great deal. Most folks are happy to adjust their price to make a sale. Just be smart about it. If there’s a guitar out there listed at $30,000 that you really like but you feel it’s overpriced what are you going to do? You can wait out the seller and hope he comes to his senses or you can make an offer. The worst the seller can say is no. Actually he can call you names and insult your mother but the sentiment is still “no”. It’s pretty easy to get a handle on the market. Look at similar guitars, look at selling prices and not asking prices (Ebay let’s you see that). Reverb is kind of useless for that because they give you a list of selling prices but not much more information than a general condition. When you have decided on what you think is a fair value, start your negotiating within striking distance of your intended price. Don’t start at 50% of the ask. Lowballing is the fastest way to rejection. Nobody likes that type of negotiation. The seller probably has a bottom in mind but if you ask “what’s your bottom price?” the likely response is that it’s the listed price. That isn’t negotiating.

Charlie’s Rules of Negotiation: 1. If the asking price seems fair, negotiating probably won’t get you anywhere. 2. If the price is high, start 10%-20% below your hoped for final price. 3. No lowballing. A lowball is 50% of the asking price or less. Nobody likes it and it will generally shut down negotiations before they begin. 4. Don’t list everything that’s wrong with the guitar in order to justify your offer. You don’t have to justify your offer. If the seller doesn’t include the issues in the listing, you might want to look elsewhere. If he does include them, then telling him what he already knows is simply annoying. 5. Be nice. 6. Be prepared to walk away. You can’t negotiate if you’ve already fallen in love. This is hard but there will almost always be another. 7. If these rules don’t work, then feel free to break them. Again, the worst that can happen is the seller says no.

I negotiate nearly every deal I complete as a buyer. I will pay the ask if it’s fair. I won’t overpay for a guitar no matter how much I want it. As a seller, I’m always willing to listen to an offer. I try to price my guitars fairly but that doesn’t stop me from listening to a fair offer. Lowball me and I won’t counter, I’ll simply reject the offer. I won’t say nasty things about your mother. If you know nothing about guitars and you’re selling a family heirloom, I’ll encourage you to do your research to come up with a fair asking price or, more often, I will simply make you an offer. Looking at Reverb and pricing it like the highest price guitar that looks something like Grandpa’s old Gibson is a recipe for failure. Buying and selling is fun. The best way to keep it that way is to treat folks fairly and make a deal where everyone is happy. There’s no negotiating that point.

This post doesn’t really lend itself to photos, so here’s my dog, Zoubi at her most recent gig. Rocker Spaniel?

4 Responses to “Negotiation 101”

  1. RAB says:

    Charlie, not surprisingly, you’ve crafted the best list of guitar negotiating tips I’ve ever seen! And posted the cutest dog with guitar (OK uke) photo yet! Go Zoubi go! Best, RAB

  2. Collin says:

    My biggest pet peeve as a seller is when a prospective buyer things that asking “what’s your bottom price?” is a valid form of negotiating. It’s a stupid tactic that never leads anywhere.

    My response is always that I don’t haggle against myself. My asking price is the starting number – so what’s your number?

    Every step of a negotiation should be accommodated by an offer (be it selling or buying). Asking a seller to effectively bid against themselves with a series of lower prices until the buyer agrees, is totally unrealistic and lazy. And sometimes insulting, as well.

    I also know from experience that the guy who asks “what’s your bottom price” is not the eventual buyer in about 90% of deals. He’s just wasting everybody’s time fishing for a bargain that doesn’t exist.

  3. okguitars says:

    Excellent point.

  4. Nelson Checkoway says:

    Great advice and great points, Charlie. I want to address a few issues and workarounds with Reverb.com–a marketplace that SHOULD be able to help buyers and sellers but has become increasingly obtuse, especially since Etsy acquired it a year or so ago.

    Yes, the “Price Guide” on specific instruments is fairly useless, lacking real condition information. However, you can do a search on a model, pull up the list of filters and check “Sold items” and then see past sales,with full descriptions and photos to compare condition to price. A few problems: these sales used to go back 5-6 years–they are now limited to around 12 months. Also, you see the last asking price but not the final settlement–and for listings where seller is open to offers, the final number is uncertain.

    Workarounds:

    (1) You might be able to find an item in both an original “Sold” listing AND the price guide and match the final price to photos/descriptions.

    (2) To get beyond the 12 month limit, do a Google search on the guitar and older Reverb sold listings will come up, sometimes up to 8 years ago. The 0-12 month sales are of course most relevant, but older listings are helpful to discern appreciation trends and smooth out sales evaluations of items with scant 12-month sales history.

    (3) If you get a “something is broken” screen when you search on “sold,” there are too many filters or search restrictions and terms. Search the basic item like “ES-335”, click sold, and then when a huge list comes up, filter down to your year range or other limiting features– it usually works.

    (4) GBase also gives the viewer the option to see both current and sold listings on a search. And the sold item sometimes, but not always, shows the listing price.

    I hope this info is helpful–a market of well informed buyers and sellers is optimum and it generally produces reasonable negotiating positions and more satisfied outcomes.

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