Has the bottom dropped out of the archtop guitar market?

[PTChristopher]

>>> Then, at some point in your life, you can decide to "retire" the uber expensive guitar, sell it and get most, if not all of your original investment back.

Right, but then you would need to report the full amount from the sale of the guitar. I do not know what the details would be on any gain in value it may have had over its life. I have only sold business equipment that had decreased in value.

Chris

[2bornot2bop]

7 years ago you could have had a company like Heritage . . (not a plug for the company, just a for example reference) . . build you one of their top of the line Golden Eagles or Super Eagles with what ever the heck spec's you wanted.

And from what I've been quoted by a well known dealer, one can acquire a brand new GE for about $4700 delivered, TODAY!

well i had to respond
gibson had delamination issues in 2010 as i recall
it is using laminted fingerbaords as of today and has been
its robot tuners and the like are largely unsupported under warranty to name things that come to mind easily

while a gibson lover myself, they seem to have QC issues ongoing (as might any mass producer) , however, people seem to complain most vitriolically due to the pricing -which most equate with ....quality

i have a thirty year old ibanez and a forty year old yamaha which are in as fine condition as my martins of similar age

glue is glue, wood is wood,
plastics....well martin had potato chip guards in the late 60's, D'A and gibby and gretsch all dealt with disintegrating plastics, etc.

while i dont suggest that mass produced (plentiful) guitars will be more valuable per se in the future, ie not collectible
certainly 50s les pauls are supremely sought after because...icons played them....and there were only 1700 or so made....



while finer points of execution may well not be the same in cheap guitars

cheap guitars do not necessarily fall apart, and sometimes can be superb (the above ibanez , a mahog drednought) truly rivals or supasses martins of the same era, including rosewood -and these are repeated comments from other guitarists hearing this humble asian made instrument


Gibson IS the known name-they trade on it over worrying about quality, because they can,
like Fender and other US long term players, they are undeniably part of americana and music,

and they make a fine guitar for the most part, one that is a joy to sit with play, look at, and gives a 'joy of ownership'

my triggs is far better than any gibson ive come across-but it aint a gibson
my lentz is the best tele ive ever come across, but it likely wont sell for half of what i paid cos it doesnt say fender


give it another generation or so and there may be a chance new players unseat these companies with superior offereing that enter the musicians psyche-imho, all it takes is new famous players and thier choices to set an example for other players to ape

I think i see this already with Collins Fs replacing Gibsons with serious mando players
and bite my tongue, but i see a lot of players in the big backing bands on TV playing PRS's

the times may be a changing...

so long as buyers are knowledgable the names and the implicit quality hold less , short of resale ,
but most buyers arent knowledgable and so the momentum and marketing, and ease of purchase will continue to sway new buyers suppose

speaking of market and value. case in point: Yamaha AE1200S

as good as it gets for less...aka, a sleeper

[Patrick2]

>>> Then, at some point in your life, you can decide to "retire" the uber expensive guitar, sell it and get most, if not all of your original investment back.

Right, but then you would need to report the full amount from the sale of the guitar. I do not know what the details would be on any gain in value it may have had over its life. I have only sold business equipment that had decreased in value.

Chris

You do not pay taxes on an item when you sell it. You pay taxes on the purchase . . not the sale. You may (if you choose to) report any profit realized from the sale . . . as profit is a dirty word and thereby taxable. Regarding your business equipment that may have decreased in value . . . . your CPA should be taking a depreciation on capital equipment, and if large enough he/she should be taking an accelerated depreciation . . . until the entire cost of said equipment is written off.

See what I mean??? Musicians aren't always the best business minds.

What kind of a field day do you think Henry J.'s corporate tax people had in writing of all of that high end CNC stuff he's being criticized for using on his production Lesters???

[PTChristopher]

Hiya Patrick,

I am definitely unclear on this.

If you completely expense a guitar (or any capital equipment) when you buy it, then would not any money you get for the sale later be business income?

Or, if you set up a depreciation schedule, then after the equipment is 100% depreciated, would not a later sale would also be 100% income?

I am ignoring any difference at all in purchase vs. sale price here - so leaving out the notion of profit.

Is it actually in tax law that you can expense capital equipment in the year of purchase, but completely ignore the received finds for selling the same equipment? If it is a consumable supply, would there still be some 'splainin' to do if it was later sold for value?

No accounting background whatsoever here (which is likely obvious enough).

Chris

[Patrick2]

Hiya Patrick,

I am definitely unclear on this.

If you completely expense a guitar (or any capital equipment) when you buy it, then would not any money you get for the sale later be business income?

Or, if you set up a depreciation schedule, then after the equipment is 100% depreciated, would not a later sale would also be 100% income?

I am ignoring any difference at all in purchase vs. sale price here - so leaving out the notion of profit.

Is it actually in tax law that you can expense capital equipment in the year of purchase, but completely ignore the received finds for selling the same equipment? If it is a consumable supply, would there still be some 'splainin' to do if it was later sold for value?

No accounting background whatsoever here (which is likely obvious enough).

Chris

Well .. .there's a possibility you could be correct . . . (after all . . there's a first time for everything . . . )

I'm sure someone with an accounting back ground will chime in soon. But, the point is . . . the cost of the tools of the trade are deductable right off the top line of earned income.

[Gilpy]

I am also not a tax expert, but do know this: If you buy a guitar for your business and depreciate it over time or do it all at once (a 179 expense), you will most definitely have to pay taxes on the residual value (or profit) when you sell it.

This is why I didn't write off my two very expensive vintage Gibsons, even though I'm a pro. I just deduct expenses and supplies, milage, etc.

[Patrick2]

And from what I've been quoted by a well known dealer, one can acquire a brand new GE for about $4700 delivered, TODAY!



speaking of market and value. case in point: Yamaha AE1200S

as good as it gets for less...aka, a sleeper

Gregor just never ceases to impress me. He's not a virtuoso monster in any venue. But he's great in most and at least very good in those where he's not great. He's never at a loss. Although . . . . that guitar definitely sounded a bit thin when he was blowing. He even reached down to the selector switch at one point to check if he was in fact on the neck pup. But, it's real purdy!!!!

[PTChristopher]

>>> the point is . . . the cost of the tools of the trade are deductable right off the top line of earned income.

Yep, I understand. And I do expense tools, which I destroy at an alarming rate. But I also assume that they are worthless for any eventual resale.

>>> there's a possibility you could be correct . . . (after all . . there's a first time for everything . . . )

HEY! Gilligan's Island was a REAL place; I am absolutely correct on that.

Chris

[Patrick2]

[QUOTE=PTChristopher;287967]>>> the point is . . . the cost of the tools of the trade are deductable right off the top line of earned income.

Yep, I understand. And I do expense tools, which I destroy at an alarming rate. But I also assume that they are worthless for any eventual resale.

>>> there's a possibility you could be correct . . . (after all . . there's a first time for everything . . . )

HEY! Gilligan's Island was a REAL place; I am absolutely correct on that.

Chris

Yeah.. ..and next you'll be telling us you did the wild thing with Ginger.?.?

[ChrisDowning]

TAX - well there are local tax rules kicking in, and they are treated differently in each country. Here in the UK you can claim 25% depreciation on equipment deemed to be an instrument. And when you sell it you would have to declare the sale because you have been claiming relief and that makes it a 'company' asset. So income from the sale is declared as taxable revenue. If it's value had increased over the buy price it would raise you taxable income.

BUSINESS Musicians can be bad at business. But you know what, they understand what they gat paid for and what they need to do to make an income. Which is a whole different World from a monthly pay check and no idea what part of your job actually earns your pay.

PROS Our basic problem as pros is that we need instruments for different situations - so all the guys I know have 5+ instruments and two or three amps. Nobody has a single instrument over £2000 / $3000. Part time players with incomes from a day job can invest or just buy their favourite guitars and enjoy just owning and playing. They are just in a different situation - and I have met guys who've had huge collections worth $50,000+ who can barely play. That makes them mre collectors than players.

VALUES I think it is enevitable values will drop. Buying a guitar is a luxury. Nothing much happens to the economy or the health of people if we stop buying. My son works for one of the big banks and he sent me this from Tullet Prebon - he says you need a cigar, big glass of wine, and few friends around to read this - think that means its scary!

http://www.tullettprebon.com/Documen..._Storm_009.pdf

[2bornot2bop]

that guitar definitely sounded a bit thin when he was blowing. He even reached down to the selector switch at one point to check if he was in fact on the neck pup. But, it's real purdy!!!!

Well, it's not my latest SKB, but they're solid laminates...having owned 4 of them I'd not define them as thin. it's a youtube video...most guitars don't represent themselves as they are. of the guitars I've sold there's only 2 I wished I hadn't sold...my former blonde being one of them.



it's a 30 year old guitar and perhaps had a pup swap that was less than desirable. the stock pups work fine in these. at their range between $900-$1500 I know no other archtop with the versatility or playability of the AE1200S. It's biggest flaw is its poly finish is a bit thick, and over time every guitar I've seen has experienced a clouding effect on its finish. If I had the choice I'd own that guitar over a 575 or Sweet 16 because its tone is much heftier, in my experience.

[Patrick2]

Well . . . as I said . . . it sure is purdy. "solid laminates"?? Oxymoron???

I find myself wondering why the Sweetie you just posted dowsn't have "16" inlaid into the bridge base.?.? It is a Sweetie . . . is it not?? Or, is it a GE with a squared off fingerboard end? I don't recall seeing that pne before??? That very well could be a GE you've been holding out on us. Shame on you!!!!!!

[2bornot2bop]

Well . . . as I said . . . it sure is purdy. "solid laminates"?? Oxymoron???

I find myself wondering why the Sweetie you just posted dowsn't have "16" inlaid into the bridge base.?.? It is a Sweetie . . . is it not?? Or, is it a GE with a squared off fingerboard end? I don't recall seeing that pne before??? That very well could be a GE you've been holding out on us. Shame on you!!!!!!

a bit wide for a Sweetie or GE don'tcha think?

[Patrick2]

I thought is was a little wide . . . but, camera angle can be deceiving. I went and took a look at my 575 when I saw your photos . . basically the same top as Sweetie . . . and I saw that the F holes were MUCH closer to the rim than the guitar in your original photo. That's why I thought it might be a GE. But, because you just referenced a Sweet 16 in your post, along with the photo, I was thinking you were showing a picture of it.

Is this your Super KB? It's a dandy for sure.

[2bornot2bop]

I thought is was a little wide . . . but, camera angle can be deceiving. I went and took a look at my 575 when I saw your photos . . basically the same top as Sweetie . . . and I saw that the F holes were MUCH closer to the rim than the guitar in your original photo. That's why I thought it might be a GE. But, because you just referenced a Sweet 16 in your post, along with the photo, I was thinking you were showing a picture of it.

Is this your Super KB? It's a dandy for sure.

no, not mine. I dig the shade though....I'd buy that one if it appeared for sale. there's a nice dual HB SKB still for sale...seller has lowered the price $500...he still can't find a buyer...I'm not a fan of dual pups any more, and Orange isn't my thing.

[ChrisDowning]

Beyond factory prices - which is a function of materials + labour + overheads + margin - the prices on archtops is whatever someone is willing to pay. Certainly a few ears ago this looked like a great market to invest in as prices were going up. But public confidence is rocked. If you are investing, the guitar is hardly something you want to gig with - so its just a puchasse you hope will rise in value. I think archtops have gone the way of Porsche and Farrarri cars, top end Harley's, Boats and Log Cabins. Nice to ave but not essential to happy living - so prices are sliding. Common sense eally if you put your head out the door and listen to the worried mutterings of the nieghbours.

[sunnysideup]

For players the archtop market has never been in a better state than it is now imho. Theres so much choice at so many different price points.

And obviously we owe that to companies like Eastman, Peerless, Loar and so many others, plus direct buying from workshops like Yunzhi.

This has led to traditional companies introducing Asian made models to compete.

Trying to understand whats happening with supply and demand is not very straightforward unless you happen to be a dealer or collector of longstanding (and even then would you get the global picture or just a regional picture) - which I am not. But over the last 10 years the number of archtops in the market has gone up dramatically, but the interest in jazz has gone up dramatically as we know from the rapid growth in the jazz education market. So it looks to me that archtop supply is up and demand is up too. (Not sure where all these new players are going to play though - it seems that jazz is becoming a bedroom hobby - nothing wrong with that.)

I dont spend too much time looking at vintage archtop prices as Im not a collector, but from the little ive seen dealers are asking much more than they ever were, much more than increases in RPI.

[ChrisDowning]

Dealers and eBayers may be asking for higher prices but there is a lot of stuff going unsold. I have guitars I should be selling but its just not the time - I'm going to hold them for another five years and see what it' s like then. There's a ready market for the cheap stuff like SH ordinary amps and pedals etc so the 'normal' shops are still going well. Collectables depends on enthusiasm and confidence - I think we are all very wary of the future right now as the economy flat lines at best.

That means if you are buying you have lots of choice, lots of leverage on price, and you don't have to rush. A great time to buy that perfect dream guitar exactly the way you want it finished.

[sunnysideup]

That's a good point Chris - what dealers ask and what they get are 2 different things.

And the collectors, sometimes I knock them mercilessly, but I appreciate their appreciation of such beautiful artefacts.

[teleman3726]

Economies grow at different rates and, if we're talking about quality vintage pieces, there's healthy demand.

[kris]

A lot of beautifull guitars...
where is a jazz?

[sunnysideup]

And Mr Teleman I agree with you ; I think there's been a lot of paranoia about the Asian newcomers; but really I think they've had a positive effect on the traditional vintage market because they've stimulated demand so much.

I live in Asia these days, sometimes there's a language problem (I'm originally from London), but in my experience there's so much more bang for the buck from the new Asian companies, and often more courtesy; try online business with some US companies if you're east of Manhattan.

I'm having a tap-tuned archtop made to my own unique specifications - and I'm old and ugly enough to know what I want :-) for a tenth of the price I'd get it in some other markets.

The collectors here will pooh-pooh it but they are not players, and yes I am planning some post-delivery modifications.

When I was a child "Made in Japan" meant dodgy standards. Ever since I've been an adult "Made in Japan" has meant superior engineering and quality control.

Other Asian countries are catching on.

Most of the participants on this site are comparatively well-educated and smart people, the classical guitar sites are more upscale, the metal thrash a bit further downscale. So many people think that Asian guitars are cheaper because they are inferior; they're cheaper because of the differential in labour rates; surely most of the participants on this site have the brains and/or experience to understand that. Some upscale Jap guitars are unavailable to the Western market for legal reasons; in general the collectors here seem to be unaware of that.

The bottom maybe will fall out of the vintage archtop market or maybe not; a comparison - old Chipendale chairs (lovely bits of wood) have no practical use, but collectors assign a high value to them, nobody else does; but the bottom hasn't fallen out - as far as I know - yet . Check Ebay for really old Gxxxxxn guitars, some of them are as cheap as firewood.

This issue is much bigger than guitars, I'm assuming we all know that; but then as a newcomer I'm not sure whether the self appointed gatekeepers on this site have understood that basic economic reality yet (yawn they exist on every web forum).

By the way, anglo-saxons invented free market economy, we shouldnt complain when it bites us in the ass.

[teleman3726]

Good post, sunnyside.
Different markets, different buyers (e.g., collectors v. buyers), et al.
And I agree the issue is one that encompasses more than guitars.

[2bornot2bop]

Sure the economy isn't what it could be but used archtops are selling okay. I know at least one individual whose sold 45 archtops over the last 24 months. Not the ultra expensive stuff mind you, but half of those were between 2-4k...a sales a sale.

[Spook410]

I'm having my 4th Yunzhi built. An 18" acoustic this time. Recently, fairly late in the production cycle there was this exchange of emails:

Me: Could you consider changing the guitar from a natural to a shaded per the attached photograph?
Yunzhi: Yes. We will take a look at this.
Me: You know, if you're already at the finish stage, I really am fine with the original natural finish.
Yunzhi: Please do not worry. We want to do the color for you.

They are beyond courteous and helpful. Their products (excepting the electronics) are comparable to the best production guitars available. They are inexpensive. Of course they will continue to get my business.