Buying and Selling Guitars for Profit is Easier Than You Think

I’ve bought, sold and traded so many guitars over the years that I can’t possibly tell you every guitar that I have ever owned- I wish I had kept better records just for nostalgia.

But I can tell you that there are a few approaches that tend to increase resale value. For example, I tend to focus on electric guitars because they require less ‘care and feeding’ than acoustics… there’s less that can go wrong, they’re tougher and mid to high-end models are usually more affordable than acoustics.

Just to be clear, I’m not saying that you can make a living buying and selling guitars. Considering the shrinking electric market, it might seem strange to even think about guitars as money makers, but there are a number of approaches that tend to work most of the time.

1. Deep Pockets

My least favorite approach for many reasons, I know a guy that is so rich that he buys every limited run, custom shop Gibson that he can get his hands on, he puts them in a climate controlled vault, he leaves them there for five to ten years and then puts them on the market as ‘never played’.

And ‘never played’ is absolutely true because he doesn’t play guitar.

I really dislike this approach for many reasons

• This approach artificially increases value- these aren’t the best guitars, they’re just rare because he hid them away

• These guitars aren’t being used for what they were made for

• If he lucks out and picks up a quality instrument, its ‘unplayed’ value pretty much guarantees that it will never be played

Again, I don’t like this approach at all, and imagine most of us can’t afford such long-term, non-liquid investments. But I include it here because it does happen and I think the better ways to sell guitars look even better in comparison.

2. Luck Favors The Prepared

It’s hard to believe how many times I’ve been in the right place at the right time- One of my favorite examples is when I walked into a club to set up for a gig and the owner offered up his friend’s 1968 Gibson B15 (a low end student acoustic guitar) to the first person who could hand over $125.

• The other guitarist in my band arrived earlier than I did, but he passed because it was clearly a student guitar and he wasn’t sure what it was worth.

• But I knew that any 60s Gibson was worth at least 3 times that amount.

• It was scarred, but in good playable condition

• It came with the original case

• It was 100% old forest mahogany

• And it had a funky, delta blues, bright timbre and turned out to be a really fun little guitar

Gibson B15

So it took me about 2 minutes to borrow a few bucks from other band members and by the time I got home it was clear that I could immediately resell it for $800.

I didn’t title this section ‘Luck’ because it required a decent knowledge of general resell value, the ability to evaluate condition and having enough friends to pony up immediate cash:)

3. Quality Long Haul Investments

I often buy instruments that I know I will use, that are high quality at low prices, and I take really good care of them. I tend to favor slightly eccentric, but upper mainline instruments. With careful brand consideration, this category of instruments tend to appreciate rather rapidly.

A great example was a late 90s American 5 string Fender Deluxe JBass- literally one of the first 5 strings that Fender offered. I bought it because it played and sounded great, 5 strings were on the ascension and I got an incredibly good deal.

It was my primary bass for nearly 10 years, everyone liked the way it sounded and Fender redesigned the model after a few years. As a result, lot’s of players asked about the history and resell opportunities and I deflected most of the offers because it did what I needed it to do.

However, one bassist was absolutely nuts about it, he couldn’t find others that he could play, so he regularly tried mine out and increased his offer every time. He finally offered nearly 3 times my original investment, I told myself ‘a bass is a bass’, pocketed the money and had my next ‘real world investment bass’ up in running in a few weeks.

American Fender Deluxe 5 string JBass

4. Obviously Under-Priced Instruments That You Can Rapidly Flip

You have to be really careful with this approach- I haven’t been burned (yet;), but if you track local sales closely you will regularly find under-priced instruments and you have to ask yourself ‘Why is this instrument under priced?’

• Damaged/repairs can be hard to spot

• Poorly made instruments are often more expensive to repair than they are worth

• You need to protect yourself from stolen instruments- I always get a copy of a driver’s license to be careful.

• Keep in mind that model interests ebb and flow- you may have seen the exact same model selling for double the asking price, but the question remains "What can I resell for now or how long will I have to wait to make a decent return?"

• In a similar vein, be careful not to fool yourself- spoofs and knock offs are certainly challenges, but there are also extremely similar models that are hard to differentiate.

• And if it’s been listed for more than a day you really need to figure out why others have passed on the deal.

This is really an extension of Luck Favors the Prepared, but it emphasizes the homework required- In the previous example, I knew the bar owner and his story made perfect sense.

But when you’re out there hunting on a regular basis, you’ve got to be careful. And the more you play and understand guitars in general, the less likely that you’ll get stuck with a bad purchase.

So if you have been carefully reading, some best practices should stand out

• Buy low and wait for the market to catch up

• Focus on high quality, mid-priced instruments that are exceptional in some way or another

• Although it’s not entirely intuitive, guitars that are original tend to retain value better- in a case where a low end guitar was upgraded for playability and tone, it may be beneficial to retrofit the original parts (if they were retained) and sell the upgraded parts separately.

• Be extremely patient- never buy on emotion and get really good at walking away.

This last point is perhaps the most important- if you want to make money on guitars, you have to be very calm and patient-

I recently received a 30% increase in trade value when I continued to walk away from a deal that didn’t meet my needs. I knew that I could get what I wanted if waited and the buyer was smart enough to increase the value of his offer by adding an additional guitar to the trade that he acquired while we were negotiating. He had picked up the 2nd guitar at a low price and realized that it would be enough of a bonus to meet my needs.

And I guess that brings out my favorite point- work with good people that you know and trust whenever possible. Here’s a callout for one of those groups Carolina Guitar And Gear Trader www.facebook.com/groups/CarolinaGuitarAndGearTrader/

So I hope this was helpful, good luck on your purchases and I’m looking forward to your comments!

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