Vintage Guitar Viewpoint, 1998

Which way to swim? By Walter Carter

You don't have to be much of a prophet to see that the tremendous growth of the vintage guitar market over the past 15 years is a double-edged sword. On the good edge, the proliferation of information and the availability of inexpensive advertising have made it easy for anyone to become a dealer. And publicity outside of the vintage world, in places like Readers Digest magazine or the Antiques Road Show on TV, has brought lots of new buyers and sellers into the market.

On the bad edge, more money at stake means more competition. Dealers are already feeling the irony of shrinking shares of a growing market. With the advent of the Internet, and the insurgence of makers and dealers of new instruments into the vintage market, the times are a-changing in a big way, and the words of Bob Dylan have never rung truer: You'd better start swimming or you'll sink like a stone.

So which way do you swim? Which way to the future of the vintage guitar world?

Usually the past is a good place to look for the future. Unfortunately, you can't look very far back at the vintage guitar market, because it hasn't been around that long, but if you look to some related fields, here's what you might see around the corner.

1. The Information Revolution stalls the market. Now that accurate information on the great majority of vintage guitars is readily available, the playing field is almost level. That last gap to be filled is in the area of instrument values, and price guides are taking care of that. However, if you think it's good for everyone to know everything, ask some of the dealers who dominated this business in the 1980s. (Hint: One of the reasons they dominated was that they knew more about guitars than the rest of us.)

I can tell you from my experience in the antique radio market, where price guides have been around for quite a while, that they cut both ways. At the beginning they reflect market prices, but if they are accurate enough to be widely used, then they eventually establish market prices. The result is a stagnant market. Every seller wants the full excellent-condition price (regardless of actual condition) for his instrument, and no one wants to pay more than book price because the book says it's not worth any more. Sellers can get a little more for the exceptionally fine examples, and then the reference price goes up by a small increment.

2. Big fish discover the small pond. In the past "big" meant Gruhn, Elderly or Mandolin Bros. But now it's Guitar Center and Mars or Gibson and Fender -- companies that each may be as big as the entire vintage guitar business. It may seem unfair, but it's just a case of turnabout being fair play. For years, the major vintage dealers have bolstered their business with sales of new guitars. Now the major dealers of new guitars are offering vintage guitars.

A bigger threat comes from the manufacturers. They've always competed for vintage guitars to some degree. Mike Longworth, then with Martin, told me ten years ago that the biggest competitor for new Martins was old Martins. But now the competition is head-to-head -- an original vintage guitar versus a new one that looks exactly like it but costs less than half as much. Gibson, Fender and virtually all other makers are tapping into the vintage market with reissue models, and they're gaining a share of a market that used to belong exclusively to vintage dealers.

3. "Day dealers" sell their own guitars. Ask an established stockbroker about "day traders" and then step back. Day traders buy and sell thousands of dollars worth of stock every day over the Internet, bypassing traditional brokerage services and, most importantly, traditional brokerage commissions. In the vintage guitar world, small dealers currently enjoying inexpensive exposure on the Internet are about to find out how the large dealers felt a few years ago when they began losing their networks of smaller "feeder" dealers. With Internet newsgroups, bulletin boards and online auctions, all you need is one guitar and an email address, and you're a dealer for a day.

4. Something unpredictable is going to happen. Futurists used to imagine a world where computers got more powerful by getting bigger. That's the logical way to predict the future -- as an extension of the past. But logical predictions are always sabotaged by such unforeseen phenomenon as silicon chips or microwave ovens or Elvis. In the vintage guitar world, you can bet there's a silicon chip or an Elvis in the works. It may be a technological advance that makes guitars -- or vintage guitars, at least -- obsolete. There will still be a market for vintage guitars, just as there's still a market for antique radios and Chinese snuff bottles, but it will be strictly a nostalgic collectors' market. Or it may be a "low-tech" development, like Eric Clapton switching to a Gibson Sonex. Again, there will still be a market, but one shudders at the thought.

5. Only the strong (and the smart and the lucky) will survive. You can beat a stagnant market, but you can't just buy an instrument and wait two months for the price to go up, like you could in the good old days. You have to buy judiciously, which means not only buying at a price that leaves you some profit margin, but buying something that you know you can sell.

You can survive among the big boys. A few years ago in Nashville, large music publishing companies were gobbling up all the smaller ones to the point that there was a running joke among songwriters -- and it wasn't the kind of joke you laugh at -- that pretty soon there would only be one publishing company. But that didn't happen. Despite the odds against them, small independent companies sprang up immediately. And they thrived, in part because they could offer writers or artists a more personal connection than a large corporate organization could.

The Nashville retail guitar scene provides a closer-to-home illustration. Cotten Music (which was featured in one of those double-spread Taylor ads) was established by the late guitarist Richard Cotten over 20 years ago in a tiny storefront about a mile from Music Row. Since then, at least five guitar stores have opened within that same radius of Music Row. Plus, Gruhn is only 10 minutes away, as is the new Mars store, and the new Thoroughbred is 25 minutes away. As if that weren't enough competition, a guitar buyer could have a custom guitar made in Nashville by Jerry Jones, Marty Lanham or Mark Lacey. So how does Cotten survive? The same way the small independent music publishing companies surive. By providing something -- a service, a product line or maybe just an attitude -- that the other guys don't.

You can beat the little guys the same way. This may not be the greatest illustration, but there are plenty of used car lots in business, despite the millions of people who sell their own cars through the classifieds and Traders Post type publications. The dealers wouldn't survive if they didn't provide some service that individuals can't or don't want to deal with.

You can keep your eyes open and be prepared to exploit new markets. In my five years at Gibson, I got a surprising number of phone calls from people looking for a Ripper bass, or raving about an RD Standard that they picked up cheap. The buzz on Rippers was strong enough that there was talk at Gibson about a reissue. To a veteran vintage dealer, these models are laughable, but to a dealer looking for a niche, that might be one.

And, of course, you can complain about how things aren't like they used to be. A certain amount of venting is good for your mental health, but it won't stop the vintage market from changing. And it won't sell guitars. So if you're gonna bitch and moan, go on and say goodbye while you're at it.