Selling new guitars?

Discussion in 'The Pub' started by amstrtatnut, May 2, 2016.

  1. amstrtatnut

    amstrtatnut Member

    Oct 16, 2013
    Northern CA
    How does one make money selling a new instrument they just purchased?

    I frequently see ads where instrument was kept in case in smoke free blah blah.

    But Ive also seen ads where a dude who is not a store is selling new instruments. Often for less than what was paid.

    This has me scratching my head.
    MrLahey likes this.
  2. JDutch

    JDutch Member

    Oct 28, 2011
    Dallas, TX
    Without knowing any specifics, this question can't be answered. To the extent that someone is successfully selling a "new" guitar for a profit, I'd assume that he was a "gray market" dealer, meaning that he purchases new guitars from authorized retailers at the authorized retailers' cost, then sells them "as new" for prices that are better than prices at which authorized dealers would be permitted to sell, without jeopardizing the authorized dealers' relationship with the guitar's manufacturer, who oftentimes set limits on the amount ADs are allowed to discount.

    The AD looks good, because it's purchasing a lot of inventory from the manufacturer, enhancing the AD's relationship with the manufacturer. The AD is getting rid of excess inventory or, alternatively, turning inventory into cash if the AD has more need for cash than inventory at that time. The gray market dealer is making money, but not as much per guitar as the AD, although gray market dealers rarely have the same overhead as ADs.

    Manufacturers don't like gray market sales because they want to control the distribution of their products, including the prices at which their products are sold. So, most of these arrangements are kept very hush hush.

    My best guess.
    A-Bone, RoryGfan and amstrtatnut like this.
  3. Phineas Ball

    Phineas Ball Fuzz Silver Supporting Member

    Feb 3, 2014
    Equatorial Los Angeles
    I've always figured someone selling a new or virtually new guitar is either:

    a) an inveterate seeker of tone sifting through the stacks of (Les Pauls, Strats, what-have-you) available in search of that tone profile
    b) a collector with a specific mindset who's looking for something new and different in his quiver, and so selling "inventory"

    Dutch is probably right, though.
  4. Blue Fin

    Blue Fin Member

    Oct 3, 2007
    Cherry Hill NJ
    Fell off of a truck?
  5. RoryGfan

    RoryGfan Silver Supporting Member

    Jan 13, 2015
    I think that both you and JDutch are right. I had a friend who liked a particular guitar and found them in a "closeout sale" from a retailer. He bought two of them. He plays one and the second one remains unopened in the box.

    I also have a couple of new guitars that I set up, put new strings on, then put them in the closet. My reasoning was that someday I might want to own one, but I would never find a lower price, so I bought it now. Sure enough, both cost a lot more now.

    Some are purchased to be resold overseas, perhaps because someone has a way to ship cheaply plus offer the guitar at full-retail plus a touch.

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