Discussion in 'The ChitChat Lounge' started by rickkkyrich, Aug 2, 2011.
If not.. Then why the guitar gear... The value gradually depreciates not immediately...
I guess it's more to do with pricing.
Sellers mentality: Selling a new gear at half it's price, I loose a couple of thousands, but selling a new car I'll loose couple of lakhs.
Buyers mentality: If I put in slightly more, I can get a new gear as well ... damn, I need to shell out a couple of more lakhs to get a new car now.
Not sure if I'm right, but that's what I feel. Your thoughts ?
Actually it all boils down to utility value. And supply demand equilibrium.
1) UV = car has definitely more UV than a guitar (which has nil). Used items of greater UV lose less value with time and ownership. (Maruti 800 loses a lot less than a Mercedes)
2) Supply demand = there is practically no demand for used gear (everyone wants a shiny brand new one), but since there will always be ppl making an upgrade, there are always potential sellers of the same. Which means that for a piece of used equipment, there are more sellers than buyers. Which always means one thing = low prices.
For a musician utility value(UV) of musical instrument is more than the UV of a car or any such thing...He wants to buy a Gibson guitar (which is important to him/her) but he won't find a car as useful as his guitar but they cost almost the same...
I met one musician yesterday who rides an insanely old pulsar but carries a Gibson CS-336 on his back...
I also don't buy anything else but gear (looking at my semi torn, unwashed for a month jeans )...
But then you might be talking one or two isolated cases.
For a majority this won't hold true, and that is the reason why price levels seen.
Yes, Considering the amount of passionate and gear loving musicians around you can say i was talking bout the minority. But this is wrong mentality of people when there's very little that can go wrong with the guitar...
Can't help it.
This is the price you pay for staying in a society/herd.
The herd decides right/wrong/best/worst - not you the sole individual.
The herd doesn't decide... It just follows blindly...
The individual components of the herd follow, but overall as an organic mass - if we take the herd as a single entity - then it DOES decide.
Even if the herd is a single entity it is composed of musicians in the mentioned scenario... Other people are not involved in anyways...Why would anyone want to sell his gear for less than what it deserves...Who made the Decision? Someone from the herd or an outsider who is not at all in the picture?
1. Ppl who are willing to sell their gear for low value - they want to dispose it off quickly, so that they can buy something that they covet more.
2. The buyer doesn't value the used equipment so much.
Hence the low price of equipment.
Otherwise such a scenario cannot arise.
So your herd, comprising of all these ppl, decide that the fair value of used equipment depreciates by say 30% per annum.
Its not a pure individual phenomena.
Because - a n00b buyer makes his judgement/expectations (point no.2) based on previous experience of all the other buyers in the market.
The herd that I am referring to in this case is the marketplace.
(Though there is no formal market place as such).
This marketplace decides the utility value. (which percolates down to individual levels as expectations perceptions and judgments)
Whereby the following is observed by the market herd:
for a piece of used equipment, there are more sellers than buyers.
There is only one way to bridge this gap.
By reducing the prices.
This causes the transactions to proceed further (otherwise no one will be willing to budge from his position).
Its very similar to a vegetable market, or for more sophisticated ppl - stock market.
You as buyer will always want to buy stuff for free.
The seller wants to sell his stuff at maximum possible rate.
However, seller knows that no one will come fwd with his outrageous price, so he keeps it reasonable.
The buyer feels the UV is close to his expectations, and proceeds to negotiate with the seller.
If the day is ending, seller wishes to anyway close the shop, and instead of losing all money, tries to recover the losses by selling at further lower prices.
But then even the buyers are few at night time ... so he reduces further.
Till one or two lone customers feel interested in buying the "stale" item.
BTW when I say seller - it may be a single shop, or a line of shops in sabzi mandi.
Now if you are cribbing about the low prices in the night time vegatable market - you need to:
a) "reassure" the sellers that they won't lose anything by keeping the stuff overnight.
b) "educate" the buyers, that things don't go stale in 24 hours.
Can you do this alone?
Who knows, in general it is not possible.
Who has formed these opinions (a & b)?
The buyers and sellers because of their experience in the market place.
This is what I call as the market or the herd making decisions.
Well i think things are slightly improving due to some good groups on facebook.. Check out the AM Used gear group started by D'Alberto Mumbai. Its helpful both for buyer and seller to get a decent deal for their gear... If you're on facebook do check it out..
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