#3 -- "It's a Limited Edition, so it's going to be worth more!"FALSERecall my post about how a guitar's actual value is determined. Define "value" as "how much cash you could reasonably get if you were to sell it, right now, in a reasonably short time."
If everyone who wants a Limited Edition owns that Limited Edition, and nobody else is interested, then those guitars aren't particularly valuable. If owners all agree their guitars are worth $1,000, that's a price, not a value -- they might as easily all agree some morning that they're now worth $10,000 each, or $100,000. But until at least one is actually sold, value has not been established. Before that event, no statement about what one such guitar is worth can be made.
That's the short version, and you will be forgiven for skipping the following details -- it won't be on the test.
Anyone who thinks about buying a "limited" just because it's "limited" should either find out exactly what is meant by the word, or accept that they're really, really gullible.
About a decade ago, one Fender dealer accidentally broke silence about a limited-edition Fender when he blogged that the run was 10,000.
Think a moment: There are VERY good midrange guitar brands that won't sell 10,000 guitars, TOTAL, in a year -- and they're probably better instruments that cost less, so 10K is by no means a rare item. Yet, you just know that there are morons buying two or three or four, maybe putting one out for display to impress their few friends and locking the rest away in anticipation of massive profit in the future. (By this I also point to ALMOST EVERY apprentice stockbroker and junior attorney in Manhattan -- the males, of course -- losing sleep in anticipation of every next PRS "Private Stock" run. Every time you see a guitar sitting in the corner in a film, TV show, commercial, or print ad, you should wonder "does anyone actually know how to PLAY that?")
Nowadays, most companies are even less clear than Fender. One company says their "limited edition" will only be made available, on demand, for a calendar year -- they could sell a hundred or a million, but so long as it's a finite number, it's "limited," right?
The Fender Custom Shop says each of their offerings "is only available for a short time" (though they avoid saying how much time). They are, though, honest about why they're doing this, and it's not because scarce handcrafted parts are required, or because they're taking enough time to produce total quality -- no, it's because this "
makes it eminently collectible and adds to its investment value" so you'd better not expect a discount because they are "highly anticipated" and will "go very quickly." Clearly, these are NOT tools to be used, but trophies to be displayed or investments to be hidden safely away.
One of the most honest guitar brands was 1978-2010
Washburn, but even they couldn't pass up some easy money, albeit by giving quality product. For a decade, they annually released an "LTD" acoustic guitar, with less than 2,000 units made. (The gimmick was that they'd offer a number based on the year: like, 1,996 of the 1996 LTD.) Most years, they gave these away to retail dealers, salespeople, distribution associates, etc. They're certainly good instruments, but no different from other Washburns from the same year with a similar MSRP -- certainly not worth any more for being "limited." To their credit, Washburn actually put a unique sequential number on each label stuck through the soundhole, so you could trust that you were indeed getting #1,833 of 1,998.
What Washburn didn't tell the gulls is that MOST of the their irregularly offered models -- guitar, bass, electric, acoustic, banjo, mando -- were ordered in batches of 250, at least initially. If a model seemed to sell well, Washburn could order another 250 or more, or put it into full production. If it failed, or simply didn't meet expectations, Washburn just wouldn't order it again, and it would be quietly removed from the next price list.
There were other reasons, too. Washburn's short-lived 1998 Shadow Series (WS/WT) were very good clones of the Strat and Tele, MSRP $350. The company dropped these to focus on their original-design and wide-ranging Maverick (BT) series, which served them very well for a decade. As a result, the Shadows may not be truly "rare" but I doubt that 1,000 of each of the three models were ever made. (Dividing by finish makes for more "rarity." Black is by far most common; I've seen a few ivory WS-4, one red WS-4, and none of the tobacco sunburst.)
The core low- and mid-range Washburn models were maintained constantly -- off the top of my head, examples include WI-64, WI-16, X-10, BT-4, D-10S, M-1 -- but more generally if a model didn't catch on with the public, Washburn simply didn't order any more. Any surplus low-end instruments were sold at cost to their regular retail customers, mid-range went to dealers like World Music Supply, and the best went to better shops, as when the pricier electrics showed up at Funky Munky. Washburn came out ahead because selling at cost or even less meant they didn't have to support huge warehouses.
ILLUSTRATIONYou would have to expend a little effort for this, but I believe you will find it rewarding as a public display of how "collectibility" actually works.
Go to
Reverb.com. Look up some axe or amp you know something about. Select a particular listing where you think the price is a bit more than condition would warrant. Note how many Watchers are involved.
If you can, find a similar listing but at a higher price. My experience of the past few years is that there will be even more Watchers.
Now, here's the problem: If those are people (like me) who are simply fence-sitting, waffling over whether they can afford to pounce on their wounded rabbit, simple probability says that there will tend to be more Watchers for the lower-priced items. More often, that is not the observed situation.
No, they are jackals, and rather inept jackals at that, the sort of two-legged jackals who have given actual four-legged jackals a bad reputation. When I share news of sighting something cool with others who appreciate such data, I sometimes alert them about "Lots of eyes in the twilight."
But they are not interested on that particular item, and they are not waiting to buy. No, those jackals more probably own something imilar. Or, worse, they know where one is to be had (pawnshop, tag sale, Mom's linen closet, Uncle Bill's parlor...), and are waiting trembling for a sign from God that they ought to kill that other wounded rabbit.
I ridicule that on a few bases.
First, they are mostly masturbating over the thought of some potential profit -- and the thrill of snatching it away from the current owner, likely someone with whom they have a relationship with some element of trust.
Second, they don't want to enjoy that guitar, they want the joy of turning a profit. In all likelihood, they wouldn't recognize a good guitar if I crept up and poked them in the butt with one -- you see these people all the time on Reverb and eBay, gibbering randomly as though they'd just had a stroke. Most Watchers, like flies, assume that if there's a crowd, there must also be value.
Third, they don't know what they're buying, so it's unlikely they know any more when they sell. If you spot that type from their poor item description, be prepared for unstated defects, and maybe outright nonfunction. (As a personal example, I casually track the market for the Roland GR-1 and VG-8, as I actually own both (and the manuals, even!), I'm aware of how to spot the functional and the upgraded ones, and as well the broken ones.) On Reverb, smart buyers seem to steer clear of certain sellers from this fact.
Fourth, they need to focus so much attention on tracking a few prey that they are self-blinded to potential bargains wandering right past them.
CONCLUSIONMost highly-desirable models (and brands) of instruments and gear that I have noticed (since I first began noticing such things, about 1973) did not start out as big-ticket items and neither had they been flagged BY THEIR as somehow "exclusive." Back in my youth (when dinosaurs roamed), if anything was correctly described as "collectible," the owner (whether Grandma or a museum) was notably unlikely to want to part with it at ANY price, which is rather the opposite of how the term came to be applied.
Using "collectible" as
TOTALLY EMPTY marketing hype was done to death by 1985. Anyone since who accepts it at face value is likely a sheep badly in need of shearing.