Let’s Talk About Resale Value
There used to be a saying that the minute you drove your new car out of the dealership, the value of the car dropped by half.
You don’t hear that these days because a couple of things have happened since then. For one thing the quality of many manufactured items got better. Countries that used to be known for cranking out junk became international leaders in quality control of materials, design, and workmanship.
For another thing, the stigma of buying used goods has receded as consumers have more confidence in the quality. A couple of recessions have caused more people to consider value rather than price, and they sometimes found that a longer life expectancy for a product meant they could get a better cost per year value when they bought used.
But in my observation, the difference between new prices and used prices is usually based on economic trends more than on individual products. It’s a ratio largely influenced by supply and demand of a category, not so much of a brand or specific item. You may have noticed that the prices of used musical instruments have jumped in the past year – despite the fact that working musicians have been out of work for a year and incentivized to sell off superfluous gear in order to pay bills. The used-instrument bargains that everyone expected to be flooding the marketplace materialized only briefly, if at all. Now we routinely see used instruments selling for 80% or 90% of the price of new ones. Why? Because people who were on lockdown and unemployed needed something to do with themselves, and saw an opportunity to try something they hadn’t had time to try before. Instrument sales – and hobbies generally – took off. Demand went through the roof. Meanwhile, on the supply side, there were situational barriers to manufacturing, to shipping, and to retail operations that reduced access to new instruments.
(Now that trend may be leveling off as retail businesses begin to get back to normal. It’s a little early to tell for sure.)
Back in the late 1960s, I bought a Gretsch Microsensitive snare strainer. I don’t remember the exact price, but I’m guessing it was 12 or so dollars. About 15 years ago, when the used instrument market was hot in Europe, I sold the strainer to a guy in France for $400. Now I look at listings and see that it would sell for about $100-$150 today.
When I hear discussions about the “resale value” of various drums, I believe that it’s basically about supply and demand – by category, not so much by brand or model. Used drums of a given quality level and condition tend to fall within a reasonable ratio of pricing to their original costs. So the “resale value” is not so much about the individual drum as it is about the timing of the market and the supply relative to the size of the market.
I have to confess I've never bought a kit or a drum with resale value being a factor in my purchase decision. A few reasons for this:
-- I look on the purchase as an investment in making my playing sound as good as possible. This helps me do a good job for whoever is paying/booking me, generating more income over time. Helping me get gigs is what I consider the payback on the investment, and good sound is definitely a help.
-- What drums are worth in the future varies according to conditions at a given point in time in the future. See above. If you can accurately predict the future, you should probably be playing in a bigger pond. Honestly, if I'm thinking about actual financial investment, I don't think about drums, or collecting in general – it's pretty hit or miss. I'd rather look for a good stock or a well located house or a financial fund. (And, yes, it's possible to buy stock for the price of a drum. Maybe not a house.)
-- The rarer the drum, the rarer the potential buyer. High prices create low demand. The market for boutique and custom drums is pretty select to start with, so expecting there to be a big resale market is kind of unrealistic.
-- If you buy a drum for $100 and sell it for $50, it's cost you $50 to own it for a period of time. That's not necessarily bad, in terms of the cost of using it. I think of it as cost of ownership and operation per year, just like a car.
-- And finally, I know some people are going to see it differently, but I consider drums to be musical instruments, not commodities. The fit of instrument to player is a pretty personal thing, and so the value to one person is typically different from the value to another person.
So all in all it’s really more a question of resale convenience than resale value. Drums that appeal to a smaller market segment can be a little more difficult to sell – new or used – but that doesn’t affect the pricing of used drums relative to when they were new. It’s mostly a matter of matching the drum with the purchaser – something that those of us who build to order do every day. As for the pricing, that’s a variable function of supply, demand, the urgency requirements of both buyer and seller, and the state of the marketplace.
