The Used Guitar Market Update

Summary

Mark from Garage, Guitars in Porsches, discusses the changing trends in the used guitar market. He highlights the shift away from low-quality, 'yard sale' gear and large, heavy amps. Mark also explores the decline of unremarkable, mid-range guitars, while emphasizing the growing demand for unique, vintage, or special items. The rise of used guitars at places like Guitar Center is driven by better margins and consumer preference for distinct instruments. In a world flooded with options, people are searching for guitars that offer a psychological advantage—something rare or different that sets them apart.

Takeaways

• 😀 The used guitar market has changed significantly, and it’s important to understand the shifts happening.
• 😀 A few years ago, the idea of a 'used guitar apocalypse' was proposed, predicting a 20% drop in prices, which has now come true.
• 😀 The era of 'yard sale' items in guitar stores (like beat-up gear) is fading, and people are no longer interested in low-tier, worn-out equipment.
• 😀 Older, bulky amps, such as the Fender Blues Deluxe, are falling out of favor as consumers prefer lighter, more portable options.
• 😀 Amplifiers with class D technology are taking over the market due to their affordability, power, and light weight.
• 😀 The perception of 'heavy' gear has changed, with buyers now looking for smaller, lighter amplifiers despite what they previously considered small.
• 😀 Used mid-range guitars that are unremarkable or in poor condition are facing a tough time in the market, as people seek unique or premium items.
• 😀 The trend is shifting towards more desirable, special guitars that stand out, rather than standard, mid-tier instruments.
• 😀 Guitar Center is capitalizing on the used guitar market due to better profit margins compared to new guitars, with used guitars offering higher markups.
• 😀 The current guitar market demands unique, vintage, or special instruments. Anything that isn't remarkable or vintage is harder to sell.
• 😀 Consumers are increasingly drawn to guitars that stand out or offer a 'psychological advantage,' such as rare vintage pieces or well-maintained models with upgrades.

Q & A

What was Mark's prediction about the used guitar market a year and a half ago?

Mark predicted that the used guitar market was overvalued, with an oversupply of guitars, leading to a 20% price drop. He also anticipated another price dip for this year, which he believes is happening.

What does Mark mean by 'yard sale items' in the context of guitar sales?

'Yard sale items' refers to low-quality, beat-up gear that guitar stores would sell cheaply, often for people starting a band or as a temporary solution. These types of items, such as old, broken-down amps, are no longer in demand.

Why are older, large, heavy amps like the Fender Blues Deluxe and Ampeg SVT less desirable now?

The demand for large, heavy amps has decreased because modern, lightweight amplifiers (e.g., Fender Rumble) are more efficient, portable, and affordable, while the older amps are bulky and require expensive repairs.

What shift in consumer preference does Mark observe regarding the size and weight of amps?

Consumers now prefer smaller, lighter amps. Even amps that were once considered 'small' (like the Fender Blues Junior) are now viewed as heavy. The need for powerful, bulky amps has diminished due to advancements in class D amplification and powerful PA systems.

What kind of guitars are now in demand according to Mark?

There is a growing demand for unique, vintage, or rare guitars. People are looking for instruments that stand out, either because of their special features, history, or upgrades, rather than just mid-range, non-vintage guitars.

How does Mark describe the market for 'unremarkable mid-range' guitars?

Unremarkable mid-range guitars, particularly non-vintage ones, are struggling in the used market. These guitars are harder to distinguish from one another and no longer capture the interest of buyers, as they don't offer anything unique.

What does Mark mean by 'psychological advantage' when talking about guitar buyers?

A psychological advantage refers to the feeling buyers get when they own a guitar that is rare, unique, or upgraded in some way. This gives them a sense of ownership over something special, which boosts their satisfaction and perceived value of the instrument.

Why are guitar stores like Guitar Center focusing on used guitars?

Guitar stores like Guitar Center are focusing on used guitars because the margins are better. Used guitars allow stores to set their own prices and make higher profits compared to new guitars, where margins are shrinking due to manufacturer pricing.

How does Mark describe the current state of third-tier gear in guitar stores?

Third-tier gear, such as outdated or broken instruments that were once sold cheaply, is no longer part of the market. There's less demand for low-end, beat-up equipment as consumers increasingly prefer higher-quality, specialized gear.

What role do platforms like Reverb play in the current guitar market?

Platforms like Reverb play a crucial role in the used guitar market by providing a marketplace for buying and selling used instruments. They cater to the demand for unique and vintage guitars, enabling people to find rare or special pieces that are not easily available in traditional retail stores.